UPDATED: AT&T has thrown in the towel in trying to compete for cord-cutters looking for a cheap TV bundle — an unsurprising move as the telco tries to shore up its struggling pay-TV business.
In an update on its website this week, the telco said it is no longer selling AT&T TV Now to new customers. “AT&T TV Now has merged with AT&T TV to bring you the best live and on-demand experience!” a message on the telco’s site says. The AT&T TV broadband-delivered product, introduced last spring, is priced and packaged more like traditional cable and satellite TV and is designed as a replacement for the steadily declining DirecTV satellite service.
The phasing out of AT&T TV Now comes after years of shifting strategies and a confusing mélange of marketing messaging. AT&T first launched the skinny-bundle service in December 2016, originally called DirecTV Now, stuffed with 100-plus channels for an eye-popping intro price of $35 per month. But the attempt to win cord-cutters backfired, as AT&T hiked the prices of the over-the-top package and the early adopters dropped the package in droves.
In a statement provided to Variety, AT&T SVP of marketing Vince Torres said, “We’re bringing more value and simplicity by merging these two streaming services into a single AT&T TV experience.”
A company rep said existing AT&T TV Now customers will continue to have access to the old lineup of channels for the same monthly price “and will not experience any disruptions as part of this change.”
AT&T TV Now most recently was priced started at $55/month for 45-plus channels, and a tier including HBO Max started at $80/month with more than 60 channels. AT&T TV, designed around a purpose-built Android TV set-top, starts at monthly prices of $70, $85 and $95, and the top two tiers include HBO Max for one year at no extra cost.
At its peak, DirecTV Now (later rebranded as AT&T TV Now) had 1.86 million in the third quarter of 2018. Over the next two years, it shed 63% of those, to stand at 683,000 at the end of Sept. 30, 2020.
AT&T’s “premium TV” business (which includes DirecTV and AT&T TV) has been in a downhill slide, too: As of the end of the third quarter of 2020, those totaled 17.1 million, down 590,000 sequentially and representing a loss of 3.3 million over the prior 12-month period.
AT&T first launched DirecTV Now in late 2016. At the time, AT&T’s then-CEO Randall Stephenson had promised that the skinny-bundle strategy would disrupt the pay-TV biz with revolutionary pricing, dramatically undercutting other TV providers. “[W]e are absolutely convinced that this is going to be very, very attractive for a large group of customers who really aren’t even in the market today,” Stephenson told investors in November 2016.