DirecTV wants to be the next on­line sub­sti­tute for ca­ble

DVR sys­tem com­ing next year

Kuwait Times - - TECHNOLOGY -

There are al­ready a few on­line ser­vices that aim to re­place ca­ble, but they haven’t at­tracted many users yet. AT&T’s DirecTV hopes to change that with a new ser­vice an­nounced Mon­day.

While just about any per­son you meet on the street will tell you ca­ble costs too much, the vast ma­jor­ity of Amer­i­cans don’t think it’s bad enough to can­cel. Cheaper on­line live-TV ser­vices, like Dish Net­work’s Sling TV and Sony’s PlayS­ta­tion Vue, re­main rel­a­tively un­known com­pared with Net­flix, Hulu and Ama­zon. And while they’re easy to or­der and can­cel on­line and fairly sim­ple to use, they still have draw­backs. “No one has re­ally de­liv­ered the right com­bi­na­tion of con­tent, price and ease that will get peo­ple to make that call to their cur­rent provider and say say­onara,” said For­rester an­a­lyst Jim Nail. It’s un­clear if AT&T’s new ser­vice, cre­atively dubbed DirecTV Now, will break out with con­sumers, es­pe­cially with an­other live-TV op­er­a­tion from Hulu com­ing early next year. And maybe one from Google. Or, who knows, maybe even Ap­ple, too. The ser­vice, which will be avail­able on Wed­nes­day, will ini­tially of­fer more than 100 chan­nels for a teaser price of $35 a month. But that’s just a lim­ited-time of­fer, and the price for that bun­dle will nearly dou­ble once the deal ex­pires. (Ex­ist­ing cus­tomers will be grand­fa­thered in.) AT&T didn’t say when that will hap­pen.

Who wants to watch?

If an on­line ca­ble ser­vice could fig­ure out how to get cus­tomers to pay up, it could at­tract mil­lions of peo­ple. Amer­i­cans are in­creas­ingly dis­sat­is­fied with how much they pay for what’s on TV. The num­ber of cus­tomers pay­ing ca­ble and satel­lite op­er­a­tors for TV has dropped nearly 3 mil­lion, to roughly 97 mil­lion, in the past two years, ac­cord­ing to in­dus­try ex­perts Mof­fet­tNathanson Re­search. And plenty of peo­ple never signed up for a $100 TV bun­dle to be­gin with. Re­search firm SNL Ka­gan es­ti­mates that about 14.4 mil­lion house­holds pay for in­ter­net but not TV. AT&T sees the po­ten­tial mar­ket for DirecTV Now as 20 mil­lion homes.

But an­a­lysts es­ti­mate that Sling has racked up fewer than 1 mil­lion sub­scribers since it launched in Fe­bru­ary 2015. Vue’s num­bers are harder to get a han­dle on, but it’s not on the list of top 10 most pop­u­lar on­line video ser­vices com­piled by re­search firm Parks As­so­ci­ates. Nei­ther ser­vice re­ports sub­scriber num­bers.

Of course, it’s hard to at­tract at­ten­tion when there are also dozens of other video apps. You can sign up for spe­cific sports, or com­edy, or an­ime, or a sin­gle chan­nel, like HBO or CBS. Net­flix, the coun­try’s most pop­u­lar paid video ser­vice, has 47.5 mil­lion cus­tomers in the U.S.

The prob­lems with in­ter­net tv

New ser­vices don’t have all the chan­nels peo­ple want. There’s been no per­fect so­lu­tion that lets you pick only your fa­vorite chan­nels for a rea­son­able price, a vi­sion of TV nir­vana known as “a la carte” that has failed to ma­te­ri­al­ize be­cause it un­der­mines the busi­ness mod­els of en­ter­tain­ment con­glom­er­ates. Only peo­ple in some mar­kets can watch broad­cast chan­nels like NBC and Fox in real time. That’s OK if you can wait to watch the next episode of a TV se­ries, but sports fans typ­i­cally want to watch games live.

And even though so-called cord-cut­ters are on a quest for cheaper video, vir­tual ca­ble may end cost­ing just as much, de­pend­ing on how many sports chan­nels or other ex­tras you want and how much your in­ter­net costs when it’s dis­con­nected from its ca­ble-bun­dle dis­count. Bun­dles from Sling and Vue range from $20 to $65 a month. You can pay to add more chan­nels.

These ser­vices are easy to sign up for and can­cel - but con­nect­ing them to a TV often re­quires an ex­tra step or a new gad­get, like an Ap­ple TV. On the plus side, while they’ve ex­pe­ri­enced some tech­ni­cal is­sues dur­ing ma­jor events, ser­vice qual­ity ap­pears to have im­proved.

And they some­times lack some of the best fea­tures of both tra­di­tional TV, like end­less chan­nel op­tions and DVR record­ing (which Vue of­fers now, while Sling is only launch­ing next month) and sub­scrip­tion TV ser­vices like Ama­zon and Net­flix (no black­outs, no re­stric­tions based on lo­ca­tion if you’re in your home coun­try).

DirecTV Now, avail­able to­day, will have some of those same prob­lems. It is launch­ing with­out CBS, which airs hits like “NCIS,” “The Big Bang The­ory” and NFL foot­ball games. CBS also has its own stream­ing ser­vice it wants you to pay for.

And ABC, NBC and Fox will only be avail­able live in a hand­ful of cities - those in which the na­tional broad­cast­ers own its lo­cal TV af­fil­i­ate. So lots of sports will be un­avail­able for many sub­scribers. The ser­vice won’t im­me­di­ately of­fer an on­line DVR that lets you store pro­grams on­line for later view­ing, al­though AT&T says that will be com­ing next year. You can only run it on two screens at a time, which may not work for large fam­i­lies.

Even so, the $35 bun­dle is cheaper than the typ­i­cal ca­ble bun­dle and pro­vides more chan­nels than on­line ca­ble com­peti­tors of­fer at sim­i­lar prices. But the $60 standard price that kicks in down the road is much less of a deal. AT&T will also of­fer a smaller pack­age of about 60 chan­nels for $35. There will also be $50 and $70 bun­dles. AT&T will pro­mote the ser­vice by let­ting its smart­phone cus­tomers stream with­out eat­ing into their mo­bile data plan. — AP

NEW YORK: In this Mon­day, May 19, 2014, file photo, traders gather at the post that han­dles AT&T on the floor of the New York Stock Ex­change. There are al­ready a few on­line ser­vices that aim to re­place ca­ble, but they don’t have many users yet. AT&T’s DirecTV hopes to change that. —AP

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