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AT&T will ease marketing of DirecTV outside rural areas, executive says

(Image: AT&T/Graphic: The Desk)

AT&T will ease marketing initiatives for its satellite television platform DirecTV to most customers, with limited exceptions, a company executive said this week.

Speaking at a technology conference in San Francisco, AT&T Chief Executive Officer John Stankey said the future of pay television delivery is software-based, not through traditional satellites.

With that in mind, Stankey said the company would ease its marketing of DirecTV to customers who live in areas where broadband Internet is more-accessible, which allows them to receive AT&T’s other offerings, including the new streaming service AT&T TV.

DirecTV isn’t going away as a product — it’ll continue to be offered to customers who want it, regardless of where they live  — but prospective customers are more likely to see AT&T TV advertisements on television, billboards and in their mailboxes instead of ads for DirecTV.

“We will continue to offer satellite and DirecTV where it has a rightful place in the market, places where cable broadband is not prevalent, oftentimes, more rural or less dense suburban areas,” Stankey said. “We’ll continue to offer it for customers on a stand-alone basis, who find its superior content offering to be something that they wish to have. But in terms of our marketing muscle and our momentum in the market, it will be about software-driven pay TV packages either over bring your own hardware, which is AT&T TV.”

Launched on Monday, AT&T TV is a new Internet-based streaming TV service that offers 70 basic cable channels for $93 a month. Customers who sign up are given both a free Android TV-powered set-top box to access the service and a contract that marries them to AT&T TV for two years.

The contract comes with a promotional price starting at around $50 a month for the service, but only for 12 months. Taxes and fees aren’t included.

An AT&T spokesperson told The Desk by email the new service is meant to replicate traditional cable and television service, but also offer access to new technologies — specifically, streaming services like Netflix, YouTube and Amazon Prime Video — so customers don’t have to use more than one remote or switch inputs on their TV sets.

“We feel really good about how we’re competitively positioned and the value AT&T TV provides – both promotionally and starting in month 13,” AT&T spokesperson Daphne Avila said.

The company said AT&T would also shift its marketing strategy to focus less on two other streaming services, AT&T TV Now and Watch AT&T. On Monday, AT&T briefly stopped allowing new customers to sign up for Watch AT&T, a skinnier $15 a month package that contains around 30 basic cable channels. A spokesperson said this was due to maintenance.

As with DirecTV, AT&T will continue allowing customers to use Watch AT&T or AT&T TV Now if they want, but in terms of marketing, they’re all in on the pricier AT&T TV.

“After we closed the DirecTV transaction, we were pretty clear and said that at that point in time that we didn’t see satellite delivery as necessarily a growth vehicle for entertainment moving forward,” Stankey said of the $48.5 billion that closed in 2015. “We like the DirecTV customer base, thought it was attractive. But we felt like the march needed to be to delivering entertainment over software.”

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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