Altice USA has found a way to use CBS’ All Access online streaming service against a Connecticut CBS affiliate that blacked out its signal for some Connecticut Cablevision customers.
Meredith-owned CBS affiliate WFSB-TV in Hartford has been off the Optimum television lineup in two dozen Connecticut towns as of 5pm Friday, Jan. 13 after negotiations between Iowa-based Meredith and Altice USA broke down over the price of renewing a retransmission consent contract that Altice claims is 800% more expensive than before.
That means Optimum customers in Litchfield County no longer have access to CBS programming. Or do they? Optimum’s website is redirecting affected customers to WFSB’s network — CBS — and offering a week’s free trial of CBS’ All Access, which allows viewers online access to all CBS programming on demand.
Optimum’s previously negotiated distribution deal with CBS for the All Access platform has been in place since the summer of 2015, which means CBS cannot pull the offer down from Altice’s website. That effectively means CBS is being used to undercut its own affiliate’s most important leverage — taking away popular programming until a provider finally capitulates and signs a renewal contract.
Matt Polka, president of the American Cable Association, which represents small and independent cable companies, loves it.
“Local broadcasters cannibalized by their own network!” Polka tweeted.
Altice USA has promised investors it will hold the line on programming costs even if it means finding alternatives for customers. This seems to be an example at work.
Will CBS All Access weaken Meredith’s position on WFSB to force price concessions? The New Haven Registerisn’t sure, reporting there are years of “bad blood” between Cablevision and Meredith over carriage contracts:
The latest dispute has attracted the attention of both of Connecticut’s U.S. senators.
“I typically don’t get involved because it’s not for me to dictate the terms of a dispute between a cable company and a network,” Sen. Chris Murphy said in a statement issued Friday night. “But I haven’t been pleased with Altice’s commitment to Connecticut since it bought Cablevision.”
FierceCablereported the area’s congressional delegation isn’t happy with either company:
Connecticut’s two Democratic U.S. Senators, Richard Blumenthal and Christopher Murphy, sent a letter addressed to both Meredith Corp. CEO Stephen Lacy and Altice USA CEO Dexter Goei.
“While we respect the private negotiations being conducted by Optimum and WFSB and make no representations as to the merits of either side’s position, we believe that the current impasse does a disservice to Connecticut families and we urge you to negotiate in good faith to bring an end to this blackout,” the Senators wrote.
Altice, meanwhile, said in its own statement, “We have been negotiating in good faith for weeks and made multiple offers to Meredith even though their initial request was for more than 800% over what we currently pay.”
When AT&T announced it would offer 100+ cable television and broadcast network channels under the DirecTV Now brand for $35 a month, Wall Street had a fit.
Craig Moffett, an analyst with Moffett-Nathanson, speculated that AT&T would make at most a profit margin of $5 a month for its $35 a month plan, once programming costs were covered. But then AT&T announced it would sweeten the deal with a free Apple TV Player or Amazon Fire Stick for those confident enough to prepay for the new service. That makes DirecTV Now a purposefully unprofitable service, creating considerable stress for both the cable and satellite industry and their investors.
Varietynotes the average DirecTV satellite subscriber delivers about $60 a month in profit to its owner, AT&T. That led the industry magazine to speculate DirecTV Now is a “loss leader” designed to sell its parent company’s AT&T-Time Warner, Inc. merger deal to regulators on the premise of increased competition delivering real savings to consumers.
Thankfully for Wall Street’s nerves, AT&T’s usual practice of marketing things with a lot of fine print emerged in the nick of time, and the $35 dollar price has now turned out to be an introductory offer for early adopters. In the not-too-distant future, AT&T will enroll new customers for its “Go Big” package at a much more profitable $60 a month. Customers who sign up at the $35 rate and stay customers will be able to keep that price as long as they make no changes to their account after the promotion ends.
Moffett
But Moffett warned investors that the traditional cable television model is still under serious threat, and AT&T’s less-promoted “Live a Little” package offering 60 popular cable networks for the everyday price of $35 is the equivalent of AT&T “running with scissors” because it alone could cause millions of cable and satellite customers to cut the cord and stay more than satisfied with a slimmed down cable package.
“Virtually all the channels that anyone would really want, save for regional sports networks” are included in the lighter “Live a Little” package, Moffett added. Customers who loathe watching sports but want a beefier package can also sign up for a $50, 80-channel “Just Right” package that primarily omits sports-oriented channels and a handful of spinoff cable networks few would miss.
Moffett and other Wall Street analysts were hoping AT&T would bloat its cheaper package with home shopping, religion, and other little-watched, low-cost cable networks and then entice customers to upgrade to unlock more popular cable channels. Instead, AT&T’s most premium package — “Gotta Have It” which costs $70 a month adds the “can live without” networks like Boomerang, Cloo, El Rey, Centric, and other little-known channels that typically live unnoticed in Channel Siberia on 500+ channel cable lineups. The highest premium priced package is attractive only for those looking for Starz/Encore channels and the basic cable network that gets no respect — Hallmark Movies & Mysteries (a/k/a the Dick van Dyke Permanent Employment Network.)
“By stacking their base package with all the best networks — likely a requirement for getting the programming contracts at all — they still have the same problem that was highlighted initially,” by Moffett. “Put simply, they aren’t going to make any money.”
That quest for profit is further challenged with subscriber acquisition programs that dole out free Apple TV units to customers willing to prepay for three months of service at the $35 rate or an Amazon Fire Stick (with Echo remote) in return for prepaying for one month of service. Anyone in the market for either device can sign up for DirecTV Now, get the equipment at an attractive price, and consider the 1-3 months of service a free extra bonus. Customers were reportedly lining up at AT&T’s owned and operated retail outlets (not authorized resellers) to pick up devices and sign up for service today.
At these prices and with these promotions, AT&T DirecTV Now could first decimate the subscriber base of its immediate competitors Sling TV and PlayStation Vue, either of which offer a much less compelling value. AT&T can afford to charge a lower price because it has deeper pockets and enormous volume discounts on the wholesale price of cable programming — combining millions of DirecTV and U-verse TV subscribers together to negotiate what industry insiders suspect are major discounts the smaller providers cannot get.
But there are issues likely to be deal-breakers for some would-be DirecTV Now subscribers:
Local broadcast stations are available only in a handful of selected cities and only a very few include all ABC, NBC, and FOX affiliates. CBS is not participating in DirecTV Now at this time, and that is a major omission;
There is a limit of two concurrent streams and although video quality is very good, it is not the 1080/HD experience AT&T’s marketing material would suggest. The quality of your internet connection will make a difference;
No DVR option at this time.
CNET compiled an excellent channel comparison chart to help consumers figure out which, if any, of these upstarts make sense as a cable TV replacement:
DirecTV Now vs. Sling TV vs. PlayStation Vue (top 169 channels, see notes below)
Channel
DirecTV Now Packages
Sling Package
Vue Package
A&E
Live a Little
Orange, Blue
No
ABC
Yes or VOD
Broadcast extra
Yes or VOD
AMC
Live a Little
Orange, Blue
Access
American Heroes
Go Big
No
Elite
Animal Planet
Live a Little
No
Access
Audience
Live a Little
No
No
AXS TV
Live a Little
Orange, Blue
No
Baby TV
No
Kids extra
No
BBC America
Live a Little
Orange, Blue
Access
BBC World News
Go Big
News extra
Elite
beIN Sports
No
Sports extra
Core
BET
Live a Little
Blue (Orange lifestyle extra)
No
Bloomberg TV
Live a Little
Base
No
Boomerang
Gotta Have It
Kids extra
Elite
Bravo
Live a Little
Blue
Access
BTN
Just Right
No
Core
Campus Insiders
No
Sports extra
No
Cartoon Network/Adult Swim
Live a Little
Orange, Blue
Access
CBS
No
No
Yes or VOD
CBS Sports
No
No
No
Centric
Go Big
No
No
Cheddar
No
Orange, Blue
No
Chiller
Gotta Have It
No
Elite
Cinemax
PREMIUM ($5/month)
PREMIUM
No
Cloo
Gotta Have It
No
Elite
CMT
Live a Little
Comedy extra
No
CNBC
Live a Little
News extra Blue
Access
CNBC World
Just Right
No
Elite
CNN
Live a Little
Orange, Blue
Access
Comedy Central
Live a Little
Orange, Blue
No
Comedy.TV
Just Right
No
No
Cooking Channel
Just Right
Lifestyle extra
Elite
CSPAN
Live a Little
No
No
Destination America
Go Big
No
Access
Discovery Channel
Live a Little
No
Access
Discovery Family
Go Big
No
Access
Discovery Life
Go Big
No
Elite
Disney Channel
Live a Little
Orange
Access
Disney Junior
Live a Little
Kids extra Orange
Access
Disney XD
Live a Little
Kids extra Orange
Access
DIY
Go Big
Lifestyle extra
Access
Duck TV
No
Kids extra
No
E!
Live a Little
Lifestyle extra Blue
Access
El Rey Network
Gotta Have It
Orange, Blue
No
Encore
Gotta Have It
No
No
EPIX
No
Hollywood extra
No
EPIX Drive-in
No
Hollywood extra
No
EPIX Hits
No
Hollywood extra
PREMIUM, Elite
EPIX2
No
Hollywood extra
No
ESPN
Live a Little
Orange
Access
ESPN 2
Live a Little
Orange
Access
ESPN Bases Loaded
No
Sports extra Orange
No
ESPN Buzzer Beater
No
Sports extra Orange
No
ESPN Deportes
No
Spanish TV extra Orange
Elite
ESPN Goal Line
No
Sports extra Orange
No
ESPNEWS
Just Right
Sports extra Orange
Core
ESPNU
Just Right
Sports extra Orange
Core
Esquire
No
No
Access
Euro News
No
World News Extra
No
Flama
No
Orange, Blue
No
Food Network
Live a Little
Orange, Blue
Access
Fox
Yes or VOD
Blue
Yes or VOD
Fox Business
Live a Little
No
Access
Fox College Sports Atlantic
No
No
Elite
Fox College Sports Central
No
No
Elite
Fox College Sports Pacific
No
No
Elite
Fox News
Live a Little
No
Access
Fox Sports 1
Live a Little
Blue
Access
Fox Sports 2
Go Big
Blue
Access
Fox Sports Prime Ticket
Just Right
No
No
France 24
No
World News Extra
No
Freeform
Live a Little
Orange
Access
Fuse
Just Right
No
No
Fusion
Just Right
World News Extra
Elite
FX
Live a Little
Blue
Access
FXM
Go Big
No
Elite
FXX
Live a Little
Blue
Access
FYI
Go Big
Lifestyle extra
No
Galavision
Live a Little
Orange, Blue
No
Golf Channel
Go Big
Sports extra Blue
Core
GSN
Just Right
Comedy extra
No
Hallmark
Live a Little
Lifestyle extra
No
Hallmark Movies & Mysteries
No
LIfestyle extra
No
HBO
PREMIUM ($5/month)
PREMIUM
PREMIUM, Ultra
HDNet Movies
No
Hollywood extra
No
HGTV
Live a Little
Orange, Blue
Access
Hi-Yah
No
No
Elite
History
Live a Little
Orange, Blue
No
HLN
Live a Little
News extra
Access
HSN
No
No
No
IFC
Just Right
Orange, Blue
Core
Ion
No
No
No
Impact
No
No
Elite
Investigation Discovery
Live a Little
No
Access
JusticeCentral.TV
Just Right
No
No
Lifetime
Live a Little
Orange, Blue
No
LMN
Just Right
Lifestyle extra
No
Local Now
No
Orange, Blue
No
LOGO
Go Big
Comedy extra
No
Longhorn Network
Just Right
No
No
Machinima
No
No
Elite
Maker
No
Orange, Blue
No
MGM-HD
No
No
Elite
MLB Network
Just Right
No
No
Motors TV
No
Sports extra
No
MSNBC
Live a Little
News extra Blue
Access
MTV
Live a Little
Comedy extra
No
MTV Classic
Go Big
No
No
MTV2
Live a Little
Comedy extra
No
Nat Geo Wild
Go Big
Blue
Elite
National Geographic
Live a Little
Blue
Access
NBA TV
Go Big
Sports extra
Core
NBC
Yes or VOD
Blue
Yes or VOD
NBC Sports Network
Just Right
Blue
Access
NDTV 24/7
No
World News Extra
No
News 18 India
No
World News Extra
No
Newsy
No
Orange, Blue
No
NFL Network
No
Blue
Core
NFL Red Zone
No
Sports extra (Blue)
PREMIUM (Core and up)
NHL Network
Go Big
Sports extra
No
Nick Jr.
Live a Little
Blue
No
Nickelodeon
Live a Little
No
No
Nicktoons
Live a Little
Kids Extra Blue
No
ONE World Sports
No
No
Elite
Outdoor Channel
No
No
No
Outside Television
No
Sports extra
Elite
OWN
Just Right
No
Access
Oxygen
Just Right
Lifestyle extra Blue
Access
Palladia
No
No
Elite
PBS
No
No
No
Poker Central
No
No
Elite
Polaris
No
Orange, Blue
Elite
POP
No
No
Access
QVC
No
No
No
Revolt
Go Big
No
No
RFD TV
Live a Little
No
No
Russia Today
No
World News Extra
No
Science
Just Right
No
Access
SEC Network
Just Right
Sports extra Orange
Core
Showtime
No
No
PREMIUM, Elite
Spike
Live a Little
Comedy extra
No
Sprout
Go Big
No
Elite
Starz
Gotta Have It
PREMIUM
No
Sundance TV
Go Big
Hollywood extra
Core
Syfy
Live a Little
Blue
Access
TBS
Live a Little
Orange, Blue
Access
TCM
Live a Little
Hollywood extra
Core
Teen Knick
Live a Little
Kids extra Blue
Elite
Telemundo
Live a Little
No
No
Tennis Channel
Go Big
No
No
The Weather Channel
Live a Little
No
No
TLC
Live a Little
No
Access
TNT
Live a Little
Orange, Blue
Access
Travel Channel
Just Right
Orange, Blue
Access
truTV
Live a Little
Blue (Orange comedy extra)
Access
TV Land
Live a Little
Comedy extra
No
TVG
Go Big
No
No
Universal HD
No
No
Elite
Univision
Live a Little
Blue (Orange Broadcast extra)
No
Univision Deportes
Gotta Have It
Sports extra
No
Univision Mas
Just Right
Blue (Orange Broadcast Extra)
No
USA Network
Live a Little
Blue
Access
Velocity HD
Live a Little
No
Elite
VH1
Live a Little
Lifestyle extra
No
VH1 Classic
No
No
Elite
Vibrant TV
No
Lifestyle extra
No
Viceland
Live a Little
Orange, Blue
No
WE tv
Live a Little
Lifestyle extra
Access
WeatherNation
Live a Little
No
No
Notes
Broadcast networks including ABC, CBS, Fox and NBC are not available for live streaming in many cities, except where noted as “yes.” The term “VOD” means viewers can watch these shows on-demand 24 hours after airing.
Most RSNs (Regional Sports Networks) not listed; varies per locality
PREMIUM = Available for an additional monthly fee beyond base package
DirecTV Now package key: Live a Little = $35/month (Local ABC, Fox, NBC broadcasts included in select markets) Just Right = $50/month Go Big = $60/month ($35 / month introductory price) Gotta Have It = $70/month
Sling TV package key: Orange = $20/month Blue = $25/month other “”extras”” = another $5 /month each (Sports extra with Blue is $10) Broacast Extra: ABC, Univision and Univision Mas available to Sling Orange subscribers in select cities
PlayStation Vue package key: (for New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Miami ONLY) Access (Base) = $40/month Core = $45/month (includes Access channels, some Regional Sports Networks) Elite = $55/month (includes Access and Core channels) Ultra = $75/month (includes Access, Core and Elite channels, plus HBO and Showtime)
(for all other cities, where ABC, CBS, Fox and NBC are available via VOD only) Access Slim (Base) = $30/month Core Slim = $35/month (includes Access channels, some Regional Sports Networks) Elite Slim = $45/month (includes Core and Access channels) Ultra Slim = $65/month (includes Access, Core and Elite channels, plus HBO and Showtime)
$5 a month each for HBO and Cinemax.
Time Warner, Inc. did its part, offering a substantial deal to DirecTV Now to allow customers to add HBO and Cinemax for just $5 a month each, substantially less than what both networks charge customers signing up a-la-carte. This also unlocks access to streaming options on both networks’ websites.
In fact, as a DirecTV Now customer, you will also become an authenticated pay television subscriber, unlocking access on various cable network websites to extra streaming and on-demand options.
The implications of DirecTV Now depend on how long AT&T extends its $35 offer, which is going to be compelling for a lot of Americans. Moffett predicts DirecTV Now could sign up a staggering 11 million Americans — at least two million cannibalized from its own DirecTV satellite customer base, six million cutting the cord on their cable company (including AT&T U-verse) and another three million cord-cutters or “cable-nevers.” Most of the latter are Millennials, and research suggests $35 may be low enough of a price point to sign them up.
AT&T is also raising concerns among internet activists because online streaming of DirecTV Now will not count against an AT&T postpaid customer’s data allowance. This zero rating scheme is seen as an end run around Net Neutrality, particularly because AT&T is not as generous with its competitors. AT&T said it will offer other video streamers the possibility of being exempted from AT&T data allowances, if they pay AT&T for the privilege.
How It Works/Signing Up
AT&T DirecTV Now starts with the Google Chrome 50+, Safari 8+ or Internet Explorer 11+ (on Windows 8 and up) web browsers or the DirecTV Now app. AT&T recommends Chrome for desktop viewing. The service doesn’t work with Firefox, Microsoft Edge, or legacy browsers.
The first step is registering for a 7-day free trial. Before handing over your credit card number, if you scroll down you will find a small free preview option is also available that includes a largely useless streaming barker channel promoting the service and a respectable collection of video on demand options from basic cable networks. The free video streaming option will give you a clue about how the service is likely to perform on your internet connection and devices. For the record, DirecTV Now now supports:
Support for other devices like Roku is coming next year.
Customers must be within the United States to use the service. If you travel abroad or to any U.S. territories like Guam, the Virgin Islands, or Puerto Rico, DirecTV Now will stop working until you return. When you sign up, keep in mind your billing zip code will mean a lot when it comes to accessing regional sports and local broadcast channels. DirecTV Now uses your billing zip code and your actual location to determine whether you are qualified to access regional sports networks and local stations.
Score a Free Apple TV Player or Amazon Fire TV Stick
Apple TV (4th Generation): Effectively free after prepaying for three months of service.
If you are looking to score an Apple TV (4th generation) or an Amazon Fire TV Stick, you will want to skip the 7-day free trial and enroll in a paid plan immediately, which will allow you to select which player you want. If you want the Apple TV, you will prepay for three months at $35 a month ($105). The Amazon Fire TV Stick only requires you to prepay for the first month of service ($35). One device per email address, but you can sign up for multiple accounts (using individual email addresses) and get a device for each — especially useful for larger families that could run into DirecTV Now’s two-stream limit.
Consider your choices before enrolling. If you want to add premium channels or upgrade your plan, and you select the three-month prepay option to grab an Apple TV Player, adding premium channels like HBO and Cinemax or moving to a higher plan will result in three months of prepaid charges for those upgrades as well, billed automatically to your credit card on file — which amounts to a $30 charge if you select HBO and Cinemax. After your promotional prepaid term ends, your account will continue to be billed at the $35 (plus any add-ons) rate until you cancel. AT&T covers you for the forfeited first free week by extending your bill date out by seven days. Allow 2-3 weeks for the device(s) to be shipped to you.
You can also sign up at an AT&T owned and operated retail store, but be aware AT&T “authorized” reseller stores are not participating in this promotion. That may allow you to bring home a device today.
Don’t care about the device promotions? Take the 7-day free trial, but be aware that you are giving AT&T your credit card number and charges begin immediately after the free week ends unless you cancel. Here’s how:
From your User Account overview page, select Manage My Plan.
Select the Cancel Plan link.
Choose one of the listed reasons.
Select Cancel Nowto confirm cancellation.
Your subscription will continue until the end of the billing cycle. No refunds or credits are provided for partial months. Your account will revert to Freeview demo status after you cancel a subscription. You can add a subscription package back at any time.
Oddly, AT&T is not charging sales tax for New York, California, Maryland or Virginia residents. Customers in states like Tennessee where AT&T provides local phone service were most likely to face sales taxes. Those signing up early are in the best position to exploit what appears to be an oversight, or it represents the first time the New York Department of Taxation and Finance left money on the table.
Streaming from Your AT&T Wireless Device Does Not Count Against Your Data Allowance
If you’re a DirecTV Now and AT&T Wireless customer, streaming most DirecTV Now movies and programs over the AT&T wireless network won’t count against your data usage allowance, according to AT&T. But believe it or not, AT&T’s fine print indicates advertisements and non-streaming app activity do count! There are some other important disclosures to be aware of:
You must be on the AT&T Wireless network within the U.S. (U.S. territories are not qualified for zero rating);
You must be a postpaid, not a prepaid AT&T wireless customer to qualify and must not have “data block” on your mobile line;
If you are grandfathered on an unlimited data plan, using DirecTV Now will not count against the 22GB data threshold which subjects you to speed throttling;
This offer may disappear at any time and/or is subject to change.
DirecTV Now Qualifies You as an Authenticated Pay Television Subscriber
Many cable networks require customers enter their cable, satellite, or telco TV login credentials to unlock video streaming and on-demand features. DirecTV Now is a qualified provider for these websites (more coming):
Other networks are not yet enabled for DirecTV Now. CNN, for example, has a prompt for DirecTV satellite customers to log in, but DirecTV Now has its own account registration system.
Local Channels Are Very Spotty
Local over the air channels are very limited on DirecTV Now and are geographically restricted. You can access these channels only if you are located in or very near to the cities listed below and your billing zip code is in the same area. If you travel outside of the immediate area, live streaming will stop working until you return.
ABC* NBC** FOX and Telemundo are covered by DirecTV Now in selected cities. CBS is not available on the service at all at this time.
Atlanta, GA: WAGA-TV
Austin, TX: KTBC
Boston, MA: Telemundo East
Charlotte, NC: WJZY
Chicago, IL: WLS-TV, WMAQ, WFLD, Telemundo East
Dallas-Ft Worth, TX: KXAS, KDFW-TV, Telemundo East
Denver, CO: Telemundo East
Detroit, MI: WJBK
Fresno-Visalia, CA: KFSN-TV, Telemundo East
Gainesville, FL: WOGX
Hartford-New Haven, CT: WVIT
Houston, TX: KTRK-TV, Telemundo East
Las Vegas, NV: Telemundo East
Los Angeles, CA: KABC-TV, KNBC, KTTV, Telemundo East
Miami-Ft Lauderdale, FL: WTVJ, Telemundo East
Minneapolis, MN: KMSP-TV
New York, NY: WABC-TV, WNBC, WNYW, Telemundo East
Orlando-Daytona, FL: WOFL
Philadelphia, PA: WPVI-TV, WCAU, WTXF-TV, Telemundo East
Phoenix, AZ: KSAZ-TV, Telemundo East
Raleigh-Durham, NC: WTVD-TV
San Diego, CA: KNSD
San Francisco/Oakland/San Jose, CA: KGO-TV, KNTV, KTVU
Tampa-St Petersburg, FL: WTVT
Washington, D.C.: WRC, WTTG
*Not available on Internet Explorer 11 on Windows 7. **NBC live stream available on mobile and desktop devices only.
Giving the Service a Test
Stop the Cap! enrolled as an ordinary customer this morning and gave the service a rigorous test, including multiple streams over our 50/5Mbps internet connection. The service debuted today, and there is little doubt there is intense interest from consumers, so we expected some performance problems from the initial demand. We didn’t see any evidence of traffic congestion, however, and that is a good sign.
AT&T’s John Stankey explaining DirecTV Now.
A similar test of Sling TV did not perform as well during peak viewing times, when streaming problems emerged. DirecTV Now seems to be built to withstand intense demand.
One customer with a 6Mbps U-verse internet connection “in the boonies” was impressed the video quality of DirecTV Now was high even on a relatively slow DSL-like connection.
“This blows SlingTV away,” the person shared. “I only have U-verse 6Mbps internet service and it is not pixelated or buffering at all. Looks exactly like my regular DirecTV picture.”
AT&T published these recommendations for DirecTV Now customers regarding internet connection speeds:
150kbps – 2.5Mbps – Minimum broadband connection speed for Mobile devices
2.5 – 5.0Mbps – Recommended for HD quality
We’ve been led to believe DirecTV Now should perform equivalently to 1080i HDTV service (depending on the video source of course). We cannot say we agree it does right now. We noticed significant artifacts on high-motion video and picture graininess that left us feeling this was closer to a 720p HD experience. It isn’t possible to say whether the video player reduced playback quality because of internet traffic issues we were unaware of or if this is how the picture is supposed to look. It did not significantly detract from the viewing experience and the lack of buffering and pixelation was far more important to us.
AT&T store in NYC.
DirecTV Now would serve adequately as a cable TV replacement if it had local station coverage and some type of DVR. At present, DirecTV Now is limited to a “Restart” feature that allows you to restart shows already in progress on certain channels, but you cannot fast-forward or record a restarted show. Once AT&T introduces a cloud-based DVR and fills out the local station lineup, this service could be lethal to overpriced cable TV packages.
AT&T’s marketing attempts to undercut the powerful position of inertia by setting an unknown time limit for customers to enroll in the $35 a month video package. If you don’t sign up today, you may not get the “free” Apple TV or Amazon Fire Stick and a respectable cable TV package for just $35 a month — about half what cable operators are charging these days for their bloated video packages. AT&T doesn’t care if you stick with your current cable provider and signup for DirecTV Now, if only to grab free streaming video equipment while sampling the service. They get their money either way.
Had AT&T permanently kept the price at around $35, many consumers would likely sit back and wait for AT&T to sort out the streaming contract issues it has with the TV networks — CBS in particular, and come up with a DVR solution before those potential customers decided to sign up and make the change. Based on several “hot deals” websites, the mentality among many consumers is to “lock in” the $35 price now and wait for AT&T to build out the package while continuing to invest $35 a month on it. That doesn’t seem so bad when you get free electronics as part of the deal.
Our Final Take
AT&T’s DirecTV Now is a potential winner and worth signing up for because of the introductory price and free equipment offers. But if you decide not to disconnect your cable/satellite television service, it is probably safe to drop DirecTV Now after your prepayment expires and return to resume service a little later. There will probably be some warning when AT&T will end the introductory price for the service, and interested customers can hop back on board before that date arrives. DirecTV Now will be a formidable competitor, but it will fight against consumer resistance to confront the cable company and cut cable’s cord until it solves the local channels issue and has a credible DVR option. The service could also use an add-on to make adding additional concurrent streams possible and more affordable than just signing up for a second account.
Don’t count out Big Cable just yet. With data caps and other internet overcharging schemes, Comcast, Cox, Suddenlink, and others can play games with usage allowances to deter customers from streaming all of their video entertainment online at the risk of blowing past their allowance. DirecTV Now’s $35 price won’t mean much after overlimit fees begin appearing on your internet bill.
DirecTV Now, AT&T’s over-the-top online streaming cable television alternative is preparing to launch this Friday, Nov. 4, offering selected customers a free 7-day trial followed by a subscription offering more than 100 “premium” basic cable networks for $35/month.
As AT&T is rushing this service to the marketplace, details are still trickling in about the channel lineup, device compatibility, and exactly where AT&T plans to market the service. Stop the Cap! has collected details from a variety of sources to give readers additional insight about whether DirecTV’s satellite-less cable television alternative is right for you.
AT&T Will Not Market DirecTV Now to U-verse/DirecTV Satellite Customers
To protect against revenue cannibalization, AT&T will not be marketing or mentioning DirecTV Now to current AT&T U-verse or DirecTV satellite customers. The phone company does not want to lose their more profitable fiber-to-the-neighborhood or satellite dish customers to a lower-priced streaming-only alternative. A memo obtained by SatelliteGuys directed to AT&T and DirecTV supervisors and field technicians warns against even mentioning DirecTV Now unless they cannot complete an installation of U-verse TV or DirecTV satellite service:
As you may have heard, AT&T is launching a new over-the-top (OTT) service called DIRECTV NOW on November 4, 2016. OTT services provide potential customers with a streaming-only option when they are unable to have traditional DIRECTV or U-Verse TV service installed.
Though DIRECTV NOW does not require professional installation, technicians may want to be aware of the service and what it entails. For instances where a DIRECTV or U-Verse installation cannot be completed due to line-of-sight, landlord permission or other issues (emphasis from SatelliteGuys), technicians can provide information on the DIRECTV NOW service and let customers know they can visit directvnow.com to learn more.
Please note that DIRECTV NOW is a completely separate offering from traditional DIRECTV and U-Verse and should only be mentioned to customers when those services cannot be installed. If the customer is able to receive broadcast TV service, technicians should not proactively mention DIRECTV NOW as it is redundant with the DIRECTV and U-Verse Apps, which still offer streaming capabilities to subscribers of the DIRECTV and U-Verse TV services respectively.
In short, AT&T has no intention of competing with itself, which means customers in AT&T service areas will continue to be referred to U-verse for broadband and phone service and DirecTV’s satellite service for television, not DirecTV Now. The service will predominately be marketed to Millennials and the rest of an estimated 20 million Americans that have cut the cable TV cord or never signed up for service at all.
Key Points: You Need a Qualified Streaming Media Player and a Fast Internet Connection
DirecTV Now is not expected to work with Roku at launch. Customers will need Apple TV, Amazon Fire TV/Stick, and/or Chromecast. More options are expected to arrive later. AT&T will initially promote the service for use with iOS or Android smartphones and tablets. AT&T Mobility customers will be able to stream DirecTV Now programming without it counting against your data plan, a controversial practice known as “zero rating;”
A minimum internet connection speed of 12Mbps is required for “high quality” streaming;
The DirecTV Now app will co-exist with the DirecTV app intended for satellite customers. The two services are considered independent of each other;
A programming package will be required, but there is no contract. Customers cannot choose channels a-la-carte, except for premium movie channels like Starz. One streaming video-on-demand package dubbed Freeview willtarget Millennials specifically, and is expected to be advertiser-supported and provided at no charge;
Customers can take advantage of a forthcoming free seven day trial by visiting directvnow.com and pre-registering.
DirecTV Now Programming Lineup
AT&T currently has agreements with 10 large programmer conglomerates, covering most of the major popular cable networks. A robust library of on-demand programming is also anticipated.
Scripps: HGTV, Food Network, Travel Channel, DIY, Cooking Channel, Great American Country;
Discovery Networks: The Discovery Channel and these likely additions: TLC, Investigation Discovery, Animal Planet, Science and Turbo/Velocity and OWN: Oprah Winfrey Network;
Agreements have also been signed with Comcast/NBC, Time Warner, Turner Networks, Starz, AMC, and Viacom.
Missing are agreements with CBS and FOX. We’re also uncertain about the availability of local channels. Additional channels are expected to be offered at an additional cost above the $35 for 100+ channels. We’ll learn more by the weekend.
For the last few years, Hulu has progressed towards a goal of creating an online streaming alternative to cable television that is owned and operated by content creators, cutting out the middlemen — traditional distributors like cable, phone, and satellite companies.
When it launched in 2007, Hulu offered a central website for television shows from three of the four major networks – ABC/Disney, NBCUniversal, and 21st Century Fox all offered full-length shows and clips on Hulu. (CBS has always preferred to showcase its own content in-house or through very restrictive contracts with third-party distributors.)
Hulu began with a limited commercial load, but has gotten progressively more ad-heavy over the last nine years. Most of Hulu’s free content has been limited to a maximum of the five most recent episodes of a current show, each appearing about a week after it originally airs. Those looking to view Hulu on a variety of wireless devices have been required to subscribe to a subscription tier since 2010, dubbed Hulu Plus. Subscribers still saw commercials, but also received access to more content viewable on more devices.
Hulu’s growth has always been stunted by its marketing — charging a subscription fee and continuing to show 15-20 minutes of ads each viewing hour. In 2015, Hulu began offering customers an ad-free option for $11.99 a month, as much as $3 more than Netflix. But Hulu began adding new customers willing to pay their price to avoid commercials.
In the last two years, Hulu’s content library has grown substantially, and relying on viewers watching free content has become less important to a service with 12 million paying subscribers.
“For the past couple years, we’ve been focused on building a subscription service that provides the deepest, most personalized content experience possible to our viewers,” said Ben Smith, Hulu senior vp and head of experience. “As we have continued to enhance that offering with new originals, exclusive acquisitions, and movies, the free service became very limited and no longer aligned with the Hulu experience or content strategy.”
It has gotten so limited that new site visitors have trouble even finding the remaining free content.
Hulu is also preparing to launch a $40/month cable-TV replacement service sometime next year that will offer dozens of live cable channels bundled with Hulu’s on-demand content. The service could become a significant threat to traditional cable TV and promote more cord-cutting.
Hulu’s free content is moving to Yahoo View
Hulu has shown no interest in slowing down. In fact, in response to increasing competition for content, last week Hulu agreed to sell a 10% interest in itself to Time Warner (Entertainment) in a deal worth $583 million. That deal assures Time Warner-owned channels (TNT, CNN, Turner Classic Movies, TBS, etc.) will be on Hulu’s cable-TV service next year. Hulu is expected to spend that money on licensing more content for subscribers.
Current free Hulu viewers need not worry about the change in Hulu’s status. Visitors will be offered free trials of Hulu’s premium options and Yahoo has agreed to adopt Hulu’s player and its existing free ad-supported library of TV shows, movies and clips for its Yahoo View service, which launched this morning.
Apple’s ability to successfully force its way into the pay television business with a cord-cutter’s streaming TV solution has been left languishing since 2009, thanks to some of America’s largest cable and entertainment companies who think Apple is arrogant and out of touch.
The Wall Street Journal today published a story showing how Apple’s plans to challenge the cable TV industry much the same way it revolutionized digital music has rubbed the big and powerful the wrong way. Apple’s desire to launch a cheaper streaming video service with a slimmed down TV lineup and robust on-demand options has flopped, because executives have no interest in bending to Apple’s way of thinking.
In 2009, Apple decided it wanted in on the streaming pay-TV business. At the same time Time Warner Cable began experimenting with data caps, Apple was approaching local stations and broadcast networks and offering them premium payments — higher than what the cable industry itself paid — for Apple’s choice of stations and cable networks. The deal meant Apple would alone be free to pick only the channels it wanted to carry, a major departure from the industry practice of contract renewals that bundled popular networks with spinoff and lesser-known channels cable operators didn’t want to carry. Apple’s hard-charging negotiator, Eddy Cue, seemed to believe that if Apple was at the negotiating table, that alone would be enough to get a deal done. It wasn’t.
Two years later, Time Warner Cable approached Apple seeking to launch a joint TV venture that could compete nationwide with satellite and phone company competitors. The talks were at the highest levels at both companies, involving Time Warner Cable’s then-CEO Glenn Britt, Cue, and Apple CEO Tim Cook. Cook also approached Brian Roberts, CEO of Comcast, promising him the service would only be sold through cable operators — good news for Comcast but bad news for open competition.
This time, Apple sought money from the cable companies, not the other way around. Cable operators were told they would need to pay $10 a month per subscriber to Apple, with no guarantee that fee would not increase in the future. Just as concerning was Apple’s insistence that subscriber authentication would require customers to use their Apple IDs, a departure from the cable industry’s push to adopt TV Everywhere, where customers could unlock streaming video from any cable network simply by logging in with the username and password they set up with their pay TV provider. Apple was also characteristically secretive about their user interface and left cable industry executives flummoxed when they asked Apple to sketch out what the service would look like on a napkin. An Apple official would only respond that their interface would be great and “better than anything you’ve ever had.” The fact Apple refused to answer the question did not go unnoticed.
Nor did Cue’s unconventional way of negotiating with some of the most powerful entertainment executives in the country. When Jeff Bewkes, CEO of Time Warner (Entertainment) agreed to meet with Cue about Apple licensing Time Warner’s critical networks — which include HBO, CNN, and TNT — Apple’s negotiator showed up 10 minutes late. While Time Warner’s negotiators were smartly dressed in business attire, Cue turned up wearing jeans, a Hawaiian shirt, and sneakers with no socks. It went downhill from there, because Apple insisted on valuable on-demand rights to full seasons of hit shows and permission to let viewers store their favorite recordings on a massive cloud-based DVR that included features like automatic recordings of hit shows and advanced ad-skipping technology.
Crickets.
More than a few programmers used to having their way with cable operators were shocked by Apple’s ‘arrogance’ and unconventional way of doing business. The newspaper reports one former Time Warner Cable executive watched with amusement as stone-faced programmers were unimpressed with Apple’s demands.
Jon Lovitz offers a visual hint what Mr. Cue must have looked like meeting with high-powered execs at Time Warner (Entertainment)
“[They] kept looking at the Apple guys like: ‘Do you have any idea how this industry works?'” said the former executive.
Apple responded ‘doing new things requires changes that often are unsettling.’
A year later the negotiations were on life support, as Apple struggled with the arrival of 2015 with no slimmed down streaming TV package to offer Apple TV owners.
Apple’s demands flew in the face of decades of cable industry business practices, which give channel owners virtual guarantees of rate hikes with each contract renewal, the right to force their spinoff networks on the cable lineup in return for a comfortable renewal process, and the cable industry’s right to an assurance everyone was getting the same kind of deal (except volume discounts). Any deviation from this would result in panic on Wall Street, as investors’ dependence on perpetually improving quarterly financial results based on revenue boosts from new or higher fees would come crashing down if a company like Apple got a better deal.
One industry insider suggested once a company like Apple got a deal on sweetheart terms, every other distributor would demand the same deal (and many have contract provisions that require it). Apple may have assumed that because it managed to get the recording industry to agree to its iTunes digital music distribution deal 15 years earlier, so the cable industry would go. Except the road to cut-throat deals for entertainment programming is littered with dead-end business plans that had to be quickly modified when the discounts ended.
Netflix and Starz both learned expensive lessons when early discounts on licensing deals ended after Hollywood saw how much money those companies made from streaming. When licensing contracts expired, entertainment companies sought massive increases in licensing fees to “fairly share” the proceeds. Netflix ended up walking away from several studios, seriously impacting their online streaming catalog. Eventually, Netflix decided if they cannot beat the studios, they should join them, creating original programming to attract and keep subscribers.
Cue in real life
After almost a decade spent trying to get into the online cable business, Apple now seems more likely to follow Netflix, Amazon, and Hulu, and devote time and money on developing its own original programming. Instead of trying to license and bundle network programming, Apple TV today supports independent apps created by various networks. Viewers still get to watch their favorite shows, Apple does not have to pay for streaming rights, and there is a joint effort to create and support a single login so viewers can get access to content without constantly re-entering usernames and passwords.
Apple’s original shows include “Planet of the Apps,” a reality series, a miniseries being developed by Dr. Dre, and a spinoff of CBS’ “Carpool Karaoke.” The shows serve a dual purpose — entertaining viewers and helping push sales in Apple’s App Store and streaming music service.
Also under consideration are big budget, critically acclaimed original shows and series that could generate positive buzz for Apple TV, like “House of Cards” has done for Netflix.
Developing programming keeps negotiators like Apple’s Mr. Cue from having to challenge a very profitable pay television industry on their terms and spares Apple from creating a cable package of linear TV channels subscribers increasingly don’t care about. Viewers want on-demand access to the shows they want to see and don’t care that much about who supplies them and how.
So in the end, the intransigence of Big Cable and Hollywood studios that are now worried about cord-cutting may have done Apple an enormous favor, sparing them from being entangled in a business that buys and sells channels to fill a bloated and expensive cable television lineup more and more consumers are now deciding they can do without.
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