{"id":1695,"date":"2016-11-03T11:39:50","date_gmt":"2016-11-03T11:39:50","guid":{"rendered":"https:\/\/www.thetripleplay.net\/blog\/?p=1695"},"modified":"2016-11-03T11:40:54","modified_gmt":"2016-11-03T11:40:54","slug":"directv-plays-dangerous-games-with-ott-service","status":"publish","type":"post","link":"https:\/\/www.thetripleplay.net\/blog\/cable\/directv-plays-dangerous-games-with-ott-service\/1695\/","title":{"rendered":"DirecTV Plays Dangerous Games With OTT Service"},"content":{"rendered":"<div id=\"attachment_1696\" style=\"width: 310px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/www.thetripleplay.net\/\" rel=\"attachment wp-att-1696\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1696\" class=\"wp-image-1696 size-medium\" title=\"OTT Services\" src=\"https:\/\/www.thetripleplay.net\/blog\/wp-content\/uploads\/2016\/11\/DirecTV-Packages-e1478173153844-300x200.jpg\" alt=\"DirecTV Packages\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.thetripleplay.net\/blog\/wp-content\/uploads\/2016\/11\/DirecTV-Packages-e1478173153844-300x200.jpg 300w, https:\/\/www.thetripleplay.net\/blog\/wp-content\/uploads\/2016\/11\/DirecTV-Packages-e1478173153844.jpg 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-1696\" class=\"wp-caption-text\"><em><strong>AT&amp;T OTT Services<\/strong><\/em><\/p><\/div>\n<p style=\"text-align: justify;\">AT&amp;T has set a price of thirty-five dollars per month for their hundred plus channels OTT service, DirecTV Now, and industry analysts have already started poking holes in the initial business case of the service. DirecTV Now has not yet released the channel lineup, but analysts estimate that the monthly programming expense for the service would be around thirty-four dollars.<\/p>\n<p style=\"text-align: justify;\">Craig Moffett, analyst at MoffettNathanson wrote, \u201cThat would leave DirecTV\u2019s gross margin per subscriber at around $1. Yes, $1. DirecTV\u2019s margin after SAC [subscriber acquisition cost], customer service, transport, computing and storage costs would be negative.\u201d Moffett explained that based on the available estimates, the initial foray of DirecTV Now is similar to the \u201cEntertainment\u201d package offered by the regular DirecTV satellite service, that includes ESPN.<\/p>\n<p style=\"text-align: justify;\">He noted that the estimates assume a price per channel that is in line with the regular DirecTV service, but wondered if AT&amp;T is paying a premium for the digital rights for the channels. Furthermore, BTIG analyst Richard Greenfield said in a blog post that, \u201cOn the pure video product, DirecTV Now appears willing to make little-to-no money or even lose money.\u201d<\/p>\n<p style=\"text-align: justify;\">Moffett said he understands that DirecTV Now has many deals in place with all the important programming owners with the exception of CBS. \u201cExcluding CBS and Fox, content costs, according to SNL Kagan, would be in the $26 range, again assuming that there are no premiums associated with the additional rights afforded the new delivery platform.\u201d<\/p>\n<p style=\"text-align: justify;\">Experts also estimate that subscribers of DirecTV usually command a sixty-dollar video gross margin, so AT&amp;T should be careful not to nip at their traditional pay TV product. \u201cAT&amp;T\u2019s aim is, of course, to minimize cannibalization of existing subscribers (and minimize piracy and password sharing), so the new service will be limited to a single stream, reducing its attractiveness as a substitute for linear packages that serve whole household,\u201d Moffett explained.<\/p>\n<div id=\"attachment_1697\" style=\"width: 310px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.thetripleplay.net\/\" rel=\"attachment wp-att-1697\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1697\" class=\"wp-image-1697 size-medium\" title=\"DirecTV Now\" src=\"https:\/\/www.thetripleplay.net\/blog\/wp-content\/uploads\/2016\/11\/DirecTV-e1478173064891-300x200.jpg\" alt=\" DirecTV\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.thetripleplay.net\/blog\/wp-content\/uploads\/2016\/11\/DirecTV-e1478173064891-300x200.jpg 300w, https:\/\/www.thetripleplay.net\/blog\/wp-content\/uploads\/2016\/11\/DirecTV-e1478173064891.jpg 539w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-1697\" class=\"wp-caption-text\"><em><strong>Channels In DirecTV Now<\/strong><\/em><\/p><\/div>\n<p style=\"text-align: justify;\">Greenfield noted that he was expecting the DirecTV Now service to cost at least sixty dollars per month, prior to the official AT&amp;T announcement about the pricing structure. Keeping that in mind, he expects that thirty-five dollars per month to be the base offering of DirecTV Now and believes that multiple tiers would come up that will offer more access, improved features, and extensive channel line-up.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>AT&amp;T has set a price of thirty-five dollars per month for their hundred plus channels OTT service, DirecTV Now, and industry analysts have already started poking holes in the initial business case of the service. DirecTV Now has not yet released the channel lineup, but analysts estimate that the monthly programming expense for the service [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[68,76],"tags":[5,19],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>DirecTV Plays Dangerous Games With OTT Service<\/title>\n<meta name=\"description\" content=\"Experts say that DirecTV plays dangerous games with their OTT TV Service. 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