Originally Posted by Egan
DTVN lost 83k subs in Q1 2019. I just don't see how the new lineup with gimpy DVR can compete with the other streaming services, unless HBO is a must have or something.
Originally Posted by Hetfieldjames
Yeah I don't know what they are doing or where they are going with all this. It's really a mystery.
Shall I lay out my theory? (I always have a theory, you know, ha!)
When AT&T acquired DirecTV, they did so in part to gain access to all of the carriage contracts that DTV had in place with the various cable network groups. A big thing that AT&T wanted was the ability to distribute those cable networks via the internet, especially over their cellular network to mobile phones.
None of us seemed to realize it at the time when DTVN debuted, but the channel packages that AT&T offered -- "Live a Little," "Gotta Have It," etc. -- were really just their existing channel packages from DTV satellite -- "Entertainment," "Choice," etc. -- but with new jazzy names. There were a few channels missing here and there on the DTVN streaming versions of the packages because AT&T didn't have streaming rights for those specific channels (e.g. some local affiliates of major broadcast networks, PBS affiliates, WGN America, etc.). And the streaming versions didn't include all the junk channels that actually pay DTV to be carried on satellite (e.g. HSN, etc.). But otherwise, the channel line-ups were the same. Trust me, I did side-by-side comparisons.
Why? It must be because DTVN was operating off of the existing set of network carriage contracts that were already in place for DTV. Those contracts stipulate which channels from a network group (e.g. Viacom) must be included in every package (including the lowest level cheapest one) and which can go in the various step-up packages.
I think what AT&T is in the midst of doing this year is building a simpler, skinnier set of channel packages based on contracts with the network groups that have been renewed or revised since they built the original set of packages (Entertainment, Choice, etc.). This new set consists (so far, anyway) of only two packages: Plus and Max. When those packages debuted on DTVN in March, they only included channels from the following network groups:
- AT&T (CNN, TBS, TNT, etc.)
- Disney (ABC, ESPN, etc.)
- Comcast (NBC, USA, NBCSN, etc.)
- CBS (CBS, CBS Sports)
- Fox (Fox, Fox News, FS1, etc.)
- plus a few one-off/independent channels: Hallmark, Accuweather, Ovation, Revolt
Those were apparently the only network groups with whom AT&T had the contractual rights to offer some of their channels in the newly structured packages. The following major groups were missing, meaning either that AT&T had yet to renegotiate/renew their carriage contracts to give them the right to include their channels in Plus and Max or that AT&T was simply holding their channels out for a better bargaining position because those renewal negotations were coming up soon.
- Viacom (Comedy Central, MTV, Nickelodeon, etc.)
- A+E (A&E, History, Lifetime, etc.)
- Discovery (Discovery, HGTV, Food, Travel, ID, etc.)
- AMC (AMC, IFC, BBCAmerica, etc.)
Now, since Plus and Max debuted, AT&T/DTV renewed their contract with Viacom in April. And what happened then? Certain Viacom channels got added to Plus and Max. We know that they're currently in contract negotiations with A+E Networks. I expect that we'll soon see some or all of that group's channels added to Plus and Max too after the contract gets renewed. That only leaves Discovery and AMC to go, and I expect we'll see at least some of their channels added too this summer.
Why do I think all this will happen this summer? Because I think these new packages are what AT&T will sell as their main new TV service with the C71 Osprey box that's currently still in beta testing. Indications from AT&T look like that service will become available in Q3 (July - Sept.) and, when it does, it will be the main TV service that they push for AT&T home broadband customers, rather than DTV satellite or Uverse TV. And I don't think AT&T will try to sell as their main TV service something that doesn't include HGTV, ID, Discovery, Food, AMC, History or A&E, all of which rank in the top 20 most popular cable channels nationwide.
AT&T's CEO has talked for awhile about slimming down the cable channel bundle to bring down the cost and make it more profitable for AT&T to sell. I think that's what this whole restructuring process with Plus and Max is about. And these new packages won't just be for DTVN and the new forthcoming service (which might simply be branded as "DirecTV Now" or "DirecTV" or maybe "AT&T TV"), they'll also be offered to DTV satellite customers. In fact, my understanding is that Plus and Max already
are available to existing satellite customers if they call in and request them. But once AT&T is finished building out these new packages with all the major channels, they'll likely become the default option for new customers across all of AT&T's TV services (except Uverse TV, which will completely cease to be sold to new customers). Perhaps the old set of packages (Entertainment, Choice, etc.) will still be available but not advertised (as is now the case for DTVN). Or maybe they'll be grandfathered and only available to existing, not new, customers who already have them on DTV and DTVN.
You might notice that some channels aren't making the cut into either Plus or Max. No Weather Channel, no Hallmark Movies & Mysteries, no GSN, no RFD-TV, no MTV2. It remains to be seen if those channels just won't be available at all in the new AT&T system or if perhaps those leftover/niche channels are available in one or more add-on packs that can added to either Plus or Max (e.g. a "Heartland" theme package with Hallmark M&M, RFD-TV, Up, PixL, etc.).
Also, note how DTVN has been giving discounts of $20 off per month for the first three months for new subs. They realize that Plus and Max are incomplete and therefore a hard sell at $50 and $70 (even with HBO included). But by the time they get those channels from A+E, Discovery and AMC Networks added in, they won't be giving those $20 discounts any more. They won't need to.
And, yes, I do expect that HBO will continue to be part of both Plus and Max. AT&T sees the forthcoming expanded HBO streaming service (rumored to be called HBO Max) as the centerpiece of their video strategy going forward. They'll want everyone to have it. So my guess is that Plus and Max won't just get you the HBO linear channels, it'll also get you the new HBO Max service.
One last thought: the names Plus and Max are suggestive of second and third tiers in a set of packages. Like how Comcast (AT&T's main competitor) has recently revamped their TV packages into three tiers: Limited, Extra and Preferred. Doesn't Plus sound kind of like Extra? And Max like Preferred? So I'm wondering if we won't see AT&T introduce a very skinny cheap bundle underneath Plus. In Comcast's case, that's Limited, which is just your local channels; such locals-only packages have a long history in the local cable company industry. For a variety of reasons, I don't think that's what AT&T would aim to do. But might we see them offer the same or similar package of channels they already sell through WatchTV for $15 as a low-cost entry-level package in this new system? WatchTV doesn't include locals at all (although that could be easily remedied if AT&T offered an OTA tuner for use with the C71 Osprey box).
Further comparisons with Comcast's newly revamped TV service are also instructive. Comcast TV gives users the options of not renting any STBs or renting them for $5/mo each. The Extra and Preferred packages come with 20 hours of cloud DVR included but that can be upgraded to 60 hours for $10/mo. (Limited doesn't come with any cloud DVR but you can still add the 60 hour upgrade for $10.)
Maybe we see AT&T do basically the same thing. You can get Plus and Max through DTVN for $50 or $70, respectively. Want to use the Osprey STB and traditional voice remote with access to other Android TV apps? That'll be an extra $5/mo per box. (Or maybe AT&T will just throw in a couple for free if you commit to 12 months of service and/or bundle TV with AT&T home broadband.) And, like now, the service will come with 20 hours of cloud DVR but they'll finally introduce that long-rumored upgrade to 100 hours of storage for an extra $10/mo.
If that's how it all plays it, then DTVN becomes their one unified TV service offered to anyone with home broadband, with a consistent set of prices that vary a little depending on whether you use their boxes or use your own and on how much cloud DVR space you need. And just like with satellite TV, I expect that a discount (~$10/mo) will be offered when bundled with AT&T home broadband.