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Analyst: AT&T could kill descendant of DirecTV Now streaming service

AT&T could shutter its streaming service AT&T TV Now, formerly DirecTV Now, as the telecom giant shifts priorities away from its cordcutting service toward one that operates more like a traditional cable offering.

Michael Nathanson, an investor with MoffettNathanson, wrote in a note to investors last week that AT&T is “essentially exiting the business” of providing a standalone pay TV streaming solution without a contract.

Nathanson said the company is throwing more assets into AT&T TV, an Internet-based service that costs about the same as a cable or satellite bundle and carries with it certain hardware requirements and a traditional two-year contract.

AT&T launched DirecTV Now in 2016 as a streaming-only option for people who felt disenfranchised by traditional cable and satellite fees. The service offered a hearty selection of channels from Disney (ABC, ESPN), Comcast (NBC, USA), Viacom (Comedy Central, MTV), Fox (Fox News, Fox Sports 1) Warner Media (Cartoon Network, TBS, CNN) and others.

Compared to similar offerings from Dish Network’s Sling and Sony’s PlayStation Vue, DirecTV Now was considered one of the better options with more programming at a lower price point. The service quickly added subscribers by offering low-cost trial subscriptions — at one point, new customers could sign up for a three-month trial at a cost of $10 a month — as well as other perks like free Roku hardware with a prepaid commitment.

Over the last two years, AT&T has moved away from low-cost trials and free hardware. It rebranded the service as “AT&T TV Now,” raised prices and dropped channels. It didn’t take long for customers to start fleeing for other services: Last year, AT&T TV Now had just under 2 million paying customers. Now it has a little more than 1 million paying customers.

AT&T has been criticized in recent months for readying new streaming services like HBO Max while apparently abandoning existing streaming services like AT&T TV Now and Watch AT&T — a slimmer, cheaper version of AT&T TV Now that was largely marketed toward wireless customers — and offering no guidance on legacy streaming services like HBO Go, Max Go and HBO Now.

This month, things became a bit clearer when AT&T’s Chief Financial Officer John Stephens said the company would achieve “significant capital efficiency” by pivoting away from satellite and streaming-only offerings. He spoke largely about cable replacement AT&T TV and the upcoming HBO Max while ignoring  streaming services AT&T TV Now, DirecTV, AT&T U-Verse and Watch AT&T, according to the trade publication Broadcasting & Cable.

If AT&T does pull the plug on AT&T TV Now, it would join Sony’s PlayStation Vue in the graveyard of streaming services.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).