It may be the end for DirecTV as streaming services thrive.

Written By Daniel Burns

   This week I was surprised to read about the direction AT&T has put out for the future of its acquired satellite tv service DirecTV. At an investor conference John Stankey, president of AT&T, admitted that DirecTV is no longer seeking subscribers for its service. DirecTV has seen its subscriber count fall from 20 million to 16 million since they bought the company for $49 billion back in 2015. Initially seen as a great addition to AT&T’s media arsenal is now becoming a pain in the neck that might have to eventually be cut off.​
​
    Stankey said AT&T will continue to sell DirecTV but only in “more rural or less dense suburban areas.” Given that DirecTV was originally launched in 1994 as a way for rural subscribers to watch tv in areas not covered by traditional cable, its not much of a surprise that strategy isn’t working too well today. “But in terms of our marketing muscle and our momentum in the market, it will be about software-driven pay-TV packages." AT&T TV (Starting at $50), not to be confused with dying Uverse, made its debut this past week and has been greeted with poor response due to its need for equipment rental and a two year contract upon signing up. This structure is exactly what people are trying to avoid by streaming in the first place. Anyone can go out and buy an Apple TV or streaming device that can run apps and services such as Netflix, Amazon Prime, Hulu, and YouTube TV. So the need to rent a device that can do the same thing doesn't appeal to consumers anyone. 

    AT&T isn’t the only company trying to push this model of renting their own device. Both Cox and Comcast have a wireless standalone smart box that runs on Comcast’s X1 platform allowing basic cable and apps over the internet. It just doesn’t make sense to rent a box anymore to watch tv. If you just buy an Apple TV 4K for example, it offers a way more premium experience to users than anything big cable can put out. In fact the AT&T box required for its new streaming service is just a custom made Android TV box with its own AT&T branded skin on it. Nothing too special about it at all. So AT&T’s decision to cut back on DirecTV’s service ends up making a-lot of sense from a marketing perspective.

    One big draw to DirecTV is its NFL Sunday ticket which gives you access to every live game across the country in one package deal. But in two years their contract with The NFL is set to expire and it doesn’t look like AT&T is planning on renewing it either. As AT&T looks to expand its presence in the now crowded streaming market with HBO Max and now AT&T TV, it needs to shift its resources away from aging DirecTV. There have been talks of selling off DirecTV after Sunday Ticket expires to satellite competitor Dish Network. Who ironically also owns Sling TV in the streaming TV space. According to Wall street analyst firm MoffettNathanson; about 6 million subscribers ditched satellite and cable in just 2019. If this were to happen Dish would be the only satellite TV provider in the US to cater to those who still need satellite tv with a combination of over 25 million subscribers. With the emergence of 5G and internet seemingly almost everywhere these days, steaming tv is bound to be the go to when available. Whether the streaming market is becoming too crowded is another story to cover.

    So, what happens to anyone wanting to sign up for DirecTV in urban areas? Looks like its tough muck for them. Just switch to streaming because it's the end to a long and pricy era in traditional pay tv. There are two main live tv streaming services that I see still remaining. YouTube TV ($49.99), which is owned by Google, and then there’s Hulu with Live TV ($55), which is owned by Disney. Both services have big backing and carry so much potential to survive if they can keep prices down. Or at least low enough when combined with the price of internet so that it's still a better deal than the traditional cable package of yesteryear.

   In my strongest opinion, cable tv is just about dead and DirecTV is just another nail in the coffin. It was a terrible purchase by AT&T and I’m pretty sure they see that now. Before AT&T bought them their service was decent, very competitive to cable (at least in the first year), and their technology was actually pretty good. But it all went down hill as they were bought, left to rust, and streaming tv apps on flashy new platforms looked a lot better. So here’s one last toast to DirecTV as its put out to the pasture and sold off for scraps.

Follow Daniel Burns on Twitter, @DBurnsOfficial

---

Ad: