DirecTV Now might be quite important for AT&T, but also quite important for other tier-one mobile service providers hoping to gain a significant position in the over the top video streaming market.
DirecTV Now also seems to have proven a new way to create differentiation in the consumer mobile business, as well as to increase perceived value. So much so that it has now become commonplace for mobile service providers to bundle an OTT video service as a feature of their mobility package.
AT&T initially lead with “HBO bundled with mobile,” and soon was followed by the other major U.S. carriers bundling Netflix or Hulu. Sprint bundles Hulu. T-Mobile US bundles Netflix. Verizon has taken a different tack, offering image quality tiers.
The reason DirecTV Now could be a breakthrough is that the service seems to be getting traction, and at rates exceeding what Dish Network has achieved with its SlingTV service.
It is highly unusual and rare for any “telco-owned” over the top service to compare well with other application provider offers of the same type. Think about telco-owned messaging, voice or mobile app platforms and you get the point.
Unusually, then, AT&T’s “DirecTV Now” service gets top marks from analysts at UBS evaluating the value of current over the top “live” video services, which lead in “value’ rankings at numerous price points from $20 a month up to $70 a month.
The UBS analysis did not look at the full on-demand services such as Netflix, but only the services offering “live TV.” Some believe the OTT “live streaming” services eventually will develop as an important segment within the overall streaming market that includes “on demand” services such as Netflix that specialize in pre-recorded content, rather than “live” or “real-time” TV.
At the moment, the notion of “skinny bundles” captures the idea behind OTT live TV streaming. The idea is that there remains significant demand for “live TV” (linear channels). But there is less appetite for larger, more-expensive live TV bundles.
In many cases, on-demand services such as Netflix are complementary, as Netflix does not support or offer live TV. In essence, OTT live TV streaming captures demand that remains for over the air TV broadcasting, sports, news, events and other scheduled TV series consumption.
The point here is that a tier-one telco seems to be creating OTT live TV services that have appeal at multiple price points, and might even be deemed competitive with other similar services. If that translates into significant market share growth, it will represent a major victory for at least one telco in the effort to fashion OTT apps and services that do have mass appeal and significant market share.
That has not happened in the internet era.
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