AT&T Launching Additional OTT Video, Online TV Services

AT&T May 15 announced a trio of video upgrades designed to attract consumers across the economic spectrum and, perhaps, influence a federal judge.

Speaking at the JP Morgan Technology, Media and Communications conference in Boston, CEO Randall Stephenson said 2018 priorities remain closing the acquisition of Time Warner, which includes Warner Bros., Turner and HBO, building out its Gigabit network; bowing new streaming video platform with targeted advertising; enhancing profitability of its Mexican wireless operations; and reducing its cost structure.

Federal Judge Richard Leon is expected to rule on the merger June 12.

In video, AT&T launched new capabilities and options for DirecTV Now, including a new user interface. Subscribers can add a third simultaneous stream for an additional $5 per month and will get a beta version of cloud DVR functionality with 20 hours of free storage. This summer, AT&T plans to roll out an option to purchase 100 hours of storage for $10 per month.

Following the close of the Time Warner deal, the company plans to introduce WatchTV, an online TV service without local programming or sports-only channels. WatchTV will be priced at $15 per month,but will be offered for no additional charge for some of AT&T’s unlimited wireless subscribers.

The company also plans to launch a broadband-based premium SVOD service aimed at competing with traditional linear TV products for in-home use, John Donovan, CEO of AT&T Communications, told a separate investor group.

The product will be app-based with a small device that connects to customers’ TVs and home broadband. The ($80-$90 monthly) service will offer the content available on traditional linear TV with a great user experience and lower price points.

With a lower capital intensity and acquisition cost, there is an opportunity to achieve a higher return on investment and comparable margins to traditional satellite video, according to Donovan.

“We won’t roll a [service] truck. The CPE [customer premises equipment, or network, set-top box, etc.] will be cheaper and have lower operating costs,” Donovan told the MoffettNathanson Media & Communications Summit in New York.

The company expects to launch the service by the end of the year.