AT&T Unveils Streaming TV Plans Including Free Ad-Driven Offer

Three Options for Different Kinds of Consumers

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Credit: Patrick T. Fallon/Bloomberg

AT&T will offer three pay-TV plans later this year to appeal to all types of viewers, from those who want the full package or a streamlined skinny bundle.

The plans will be provided under the DirecTV brand, the satellite-TV company that AT&T acquired last year. The Dallas-based company didn't provide pricing or programming details and is expected to start the service in the fourth quarter, according to a statement Tuesday.

AT&T is taking the first step toward a national, application-based, over-the-top internet video service it can sell to people outside its own TV and wireless subscriber base. Apple has suspended plans to offer a live streaming service, though Verizon Communications and Sony Corp. currently have such offers. AT&T's move highlights the pressure facing large pay-TV providers to respond to revenue-robbing challenges from online services like Netflix Inc. and as well as skinny bundles like Dish Network's Sling TV.

"This is mostly about giving cord-cutters a way of staying with AT&T and maybe capturing some of the users that don't pay for TV," said Jan Dawson, an analyst with Jackdaw Research. "The question is cannibalization. You have customers paying a lot for boxes and programming that they don't watch; they may decide this offer is more attractive."

AT&T's three streaming options will be DirecTV Now, a full range of live channels and on-demand shows; DirecTV Mobile, a package of premium and made-for-the-web video aimed at smartphone users; and DirecTV Preview, a free, ad-supported video service designed to appeal to teens and millennials.

The TV market is changing and the company is adapting by offering more choices, AT&T Entertainment Chief Executive Officer John Stankey said in an interview Tuesday.

"We know that there are a lot of Americans that are in love with the full bundle of pay TV, and we know some are attracted to skinny bundles. But not everyone's idea of what should be in the bundle is the same. We have packages that meet both needs," Mr. Stankey said.

-- Bloomberg News

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