It’s been five years. Of course everything before March 2020 seems like a distant memory at this point. But let’s take a moment to consider it wasn’t that long ago.
In an article dated March 3, 2016, I detailed some discussions from then AT&T head John Stankey. Mr. Stankey discussed what was then called “DIRECTV NOW,” the live streaming service from DIRECTV. We all thought that any live streaming service would have to be low-priced, like Sling TV was at that point. However, Mr. Stankey pointed out that there was definitely a market for a full-featured live streaming service.
Of course he was right. Flash-forward five years, and we see live streaming services at all price points. If you want to watch TV for free, there are services that are completely ad-supported. If you want to pay a little and get a little, there are plans for you. But, the largest segment in the live streaming space is reserved for high-priced, high-feature services like AT&T TV, Hulu, and YouTube TV.
Why does live TV cost so much?
It’s worth pointing out that live streaming TV costs so much for the same reason that traditional pay-TV costs so much. It’s not the infrastructure costs. It never was. The high cost of live TV comes from the content providers. Even if you’re only paying pennies for each channel for every subscriber, it adds up. Content costs are often the largest chunk of what you pay, and that means your money goes straight to the people making the programs. A company like AT&T keeps a small sliver, but not much.
Where will AT&T TV go from here?
(Bloodsucking lawyers make me remind you that this is speculation and I don’t have any inside knowledge to share.)
This is an extremely exciting time for DIRECTV satellite and AT&T TV. As we learn more about the plan to spin off those services from AT&T, we’re bound to see a quick change in the customer experience. The new company will have to focus on what’s important to customers. They won’t be a smaller cog in a larger machine. They’ll need to innovate, and that’s good news for us customers.
I don’t know what AT&T TV will look like in the future. I don’t even know if it will still be called AT&T TV. There’s some argument that changing the name from DIRECTV NOW was a mistake, but who are we to argue? There were probably some very high-powered executives with powerpoint decks to prove otherwise. But, I do wonder if that AT&T TV name will stick around.
I have a lot of hopes for the “new” DIRECTV. I think that they’ll focus more on the customer experience and begin to deliver something that makes more sense for the average person and also is easier to manager. But, of course, none of this will happen until the deal closes which is expected to be by end of year. Until then all we can do is wait and hope.