If DIRECTV NOW Doesn’t Want Everyone to Churn, This Should Be Their 2019 New Year’s Resolution
To start the New Year, we have been taking a look back at each of the 7 Live TV Streaming Service’s past year, and what we hope lies ahead in 2019. We’ve shared our New Year’s Resolutions for Hulu Live TV, PlayStation Vue, Sling TV, YouTubeTV — and today we’ll look at AT&T TV NOW
When we look back at AT&T TV NOW in 2018, we saw what probably was the peak of streaming services. A bundle that included locals and all major cable networks for under $35, and included a free Apple TV when you signed-up.
So how did a year that started with promise, saw the service massively grow, ultimately end in disappointment?
DIRECTV NOW Year-In-Review
While the company started privately beta testing the feature with users in July 2017, the company still had not launched their True Cloud DVR. When the streaming service first launched in 2016, it had massive buffering issues — especially around major events. It was no surprise that the company wanted to ensure the DVR feature worked well before it was rolled out.
The company knew it had work to do — in January at Morgan Stanley’s TMT Conference, AT&T CEO John Donovan said “our TV product is not there yet” in reference to DIRECTV NOW. Much of their bet was on an improved mobile and TV app with a more polished interface, a better grid guide, and easier access to on-demand content. This was also one of the reasons customers were willing to put up with an inferior streaming product — the hope that it would get better.
Device and Service Deals
DIRECTV NOW saw huge growth and adoption of their service despite frequent buffering. This was largely because of a superior channel bundle and incredible device deals. While services like PlayStation Vue, Hulu Live TV, and YouTube TV offered 18-25 Top Cable Channels — DIRECTV NOW included 34 of the Top 35 Cable networks in their base package.
To draw customers in, they offered compelling device deals like an Apple TV 4K for $0 with 3 months of service, a Roku Streaming Stick with 1 month of service, or your first three months for just $10 a month. The deals were so good that it was cheaper to get an Apple TV 4K from DIRECTV NOW than it was to get one directly from Apple.
With a compelling channel bundle and cheap device deals, AT&T TV NOW saw incredible growth. By March, they added 312,000 subscribers in the first three months of 2018, reaching nearly 1.5 million users.
DIRECTV NOW 2.0 & True Cloud DVR
By May, customers had been waiting nearly a year for the updated DIRECTV NOW App and True Cloud DVR. On May 15, they finally got their wish. DIRECTV NOW rolled out a 20 Hour Cloud DVR to all customers, as well as the ability to subscribe to a third simultaneous stream for $5 a month.
With the DVR came their updated App which included an enhanced grid guide, navigation, and search options make it easier to watch content. The True Cloud DVR and new app were initially released on Apple TV, Chromecast, iPhone, iPad, and Web. Over the next few weeks, they would roll it out to Fire TV and Roku devices.
New Packages, Locals, and Channels
In June, we got a sneak peak of one of their major initiatives — new packages. The company announced AT&T WatchTV - a slimmed down version of DIRECTV NOW that included 37 entertainment and news channels for only $15 (or free for AT&T Unlimited&More customers). It wouldn’t have locals, sports, or a DVR — but served a entry-level entertainment package to compete with services like Philo.
They also launched Todo y Más, a standalone Spanish-language package — which included ~90 channels for $45/month, as well as two Spanish add-ons to their English plans — Deportes ($5) for 6 sports channels and Español ($10) for 60 Spanish Channels. Over the rest of the year they would add Vietnamese ($25), Portuguese ($25) and Korean ($30).
Also rumors started of an upcoming DirecTV streaming package. A service that would be a fat bundle that you would normally get via satellite, but instead would get through a streaming box — including a custom one of their own.
Throughout the year they expanded their reach of local networks. Going into 2018, they had about 300 local affiliates and added an additional ~100 over the the course of the year.
Given that they already had Discovery and Viacom channels, there were few channels that DIRECTV NOW needed to add. One of the most requested was NFL Network, which the company added just in time for the NFL season.
Goodbye Device Deals, Hello Price Increase
In July, DIRECTV NOW announced that they would raise the price of the service across packages by $5 a month. This would include those customers on the Go Big introductory package which gave early subscribers the $60 Go Big plan for only $35 a month (which would now be $40). They were not the only ones — over the course of the summer both Sling TV and PlayStation Vuewould raise prices as well.
In the second quarter, they had added an additional 342K subscribers and reached 1.8MM customers — only 500K behind Sling TV. Now they had a sizable user base and had launched their new App and DVR, they no longer felt the need to heavily subsidize new customers. Without notice, they started removing their Apple TV 4K and Roku device deals, as well as the $10 for 3 Month package. It was clear — times had changed.
Need for Profitability
It was clear that DIRECTV NOW wouldn’t continue to subsidize new customers. A $5 price hike and removal of device deals wouldn’t be the end of it either. In November, they removed discounts on the service for AT&T customers.
Then began talk that there might be a need for a skinnier bundle. There was a reason that other company didn’t offer as many channels as DIRECTV NOW — cost. And now DIRECTV NOW felt that they either had to continue to raise prices or to slim the bundle.
But it seems like it might be a case of both. In December, AT&T CEO Randall Stephenson shared that he thinks the target market is “$50-60 price” which would include “thinning out the content, getting the price point right, making it profitable.”
We thought this was going to be a break out year for DIRECTV NOW and for the first half of the year it was. The company heavily touted their new DVR and an updated interface which rolled out starting in July. Unfortunately, while it looks a bit better than the original design, the rest of it has been a flop. Their True Cloud DVR has been in Beta since launch and is still having issues like random recording appearing on the service. When the company stopped offering highly attractive promotions like Free Apple TV 4K — growth hit a wall.
Without more channels, lower prices, compelling device deals, and no promise of a better product — what is DIRECTV NOW? In the third quarter, they added just 49,000 subscribers down 85% from the previous one. And it’s only going to get worse.
DIRECTV NOW’s 2019 New Year’s Resolution
Our New Year’s Resolution for DIRECTV NOW is to focus on product quality and streaming performance. Their App and DVR is not good enough to compete against PlayStation Vue, Hulu Live TV, and YouTube TV. They need to dramatically reduce buffering, make on-demand actually work, and improve the speed of their apps.
As it is right now, when they do raise prices and slim the bundle — why would you subscribe to DIRECTV NOW? If you could get the same channels, at the same price from another service — you would not pick DIRECTV NOW.
DIRECTV NOW is betting that they can make the business more profitable with addressable advertising (personalize ad-insertion). But, it won’t help if users churn. And trust us, users will churn.
It sometimes feels like that DIRECTV NOW subscribers were guinea pigs for the company’s real motives which is to create a streaming version of DirecTV. And now with AT&T launching a Netflix-competitor later in 2019, there will be even less focus on DIRECTV NOW as a product — which is scary.
If AT&T cares about DIRECTV NOW succeeding, they will take a step back and try to make it a better streaming product. Because right now, it’s not good enough.
Want to Learn More About Live TV Streaming Services?
- You can read our comprehensive DIRECTV NOW review which highlights channels, features, performance, and supported devices, and more.
- You can read comparison of 7 different cord-cutting services including DIRECTV NOW, PlayStation Vue, fuboTV, Hulu Live TV, Philo, Sling TV, and YouTube TV.
- If you need a recommendation, use Channel Finder to add your favorite channels, shows, and sports teams and we’ll tell you the best service for you.