The writing is most decidedly on the wall for traditional cable packages. Existing subscribers are hemorrhaging by the month, young people aren’t signing up in the first place, and cheaper streaming alternatives offer the same features (or better!) for far less money.
Cable companies, unsurprisingly, are hoping to keep their self-described “cash cow” going during the transition to streaming. AT&T has been moving the most ambitiously into cord-cutting streaming alternatives, and its excellent DirecTV Now service is one of the most popular streaming options available.
But DirecTV Now is also losing money, thanks to the high cost of programming and competition in the streaming space capping how much providers can charge. In an effort to make a little more money, AT&T is branching out from offering just one streaming service. We learned last month that it’s planning on launching a no-sports skinny bundle, which will cost around $15 and be free for AT&T wireless subscribers. But according to AT&T Communications CEO John Donovan, the company is also planning to launch a more expensive bundle, which will serve as an alternative to satellite TV rather than a cord-cutting bundle.
As DSLReports spotted, Donovan told attendees at the MoffettNathanson Media & Communications Summit that the company is going to provide a streaming equivalent of the company’s existing satellite TV service, DirecTV. The new service will use internet streaming to provide the same service as its existing satellite TV bundles, but possibly at a lower cost. “The CPE (consumer premises equipment) will be cheaper, it will be a thinner, lighter version and we will have lower operating costs. We anticipate passing a lot of those cost savings,” Donovan said.
A streaming service that offers the same channels as satellite TV but with less equipment and a lower monthly cost is undoubtedly a good thing, but it’s not set to be a seismic change in how you watch TV. What AT&T is doing here is using the internet to make content delivery cheaper, but seemingly not changing the pricing strategy or offering anything new like a la carte service.
Worse, it seems that AT&T is determined to keep going with a strategy of offering multiple streaming services. Donovan said that the company plans to have five streaming services operating by 2019, which means that picking a streaming service will end up as complicated as getting a cable bundle. Half the reason people hate cable is because of high prices forced on them by bundling; if streaming services go down the same route, we’re likely to end up with something that looks a lot like cable, just delivered over the internet.