AT&T unveiled a new version of its streaming service DirecTV Now on Tuesday with new features, including cloud DVR, the company’s chief executive announced at an investor conference in Boston.
The company’s chief executive Randall Stephenson said by end of year, the Dallas-based telecom plans to offer three distinct streaming services with different bundles of channels and price points that range from $15 to $90 per month. He said it’s all part of a business strategy to change the way that video is distributed, consumed and monetized.
The new version of DirecTV Now, which was to launch Tuesday, has a new user interface and more premium features. Consumers can record shows on a cloud DVR and watch up to three streams at the same time. The company will initially charge a discounted price of $40 per month, Stephenson said.
Stephenson made the announcement Tuesday at the J.P. Morgan Global Technology, Media and Communications Conference. He spoke about AT&T’s entertainment plans as the company awaits a court ruling that will decide whether it becomes owner of Time Warner. Time Warner’s large and valuable portfolio of TV and movie content, such as HBO, CNN and Warner Bros., is central to AT&T’s strategy. The deal is valued at nearly $109 billion, including debt.
The Justice Department sued to block the merger, saying it would hurt competitors and drive up prices for consumers. A ruling is expected by June 12.
And Stephenson said Tuesday that AT&T isn’t done with its buying spree. He said it will likely announce another merger and acquisition to build up and roll out an advertising platform that serves up targeted ads for the new streaming services.
AT&T is the largest pay-TV company in the country with its cable and satellite options, U-verse and DirecTV. But like other cable and satellite TV companies, it has seen consumers flock to cheaper, internet-based TV options, such as Netflix, Hulu and Dish’s Sling TV.
It responded in fall 2016 by launching its own streaming service: DirecTV Now. The streaming service has grown to about 1.5 million subscribers.
Unlike cable and satellite, however, the streaming service has thin margins. Stephenson said that will change once the Time Warner merger is approved and AT&T can launch a new advertising platform. The advertising platform will use consumer data and analytics to power targeted ads, which companies are willing to pay more for, he said.