- Now that AT&T has closed its Time Warner acquisition, it has a lot of streaming services to manage.
- It already has DirecTV Now, which has two tiers. It also has WatchTV and HBO Now. And it’s preparing to launch its WarnerMedia streaming service, which will have three tiers for customers to choose from.
- Analysts say AT&T will need to simplify its marketing message to compete in a fragmented TV ecosystem.
AT&T has a choice problem.
Having closed its Time Warner deal, it plans to build a new streaming service to compete with Netflix.
It’s started to streamline its vMVPD offerings, cutting its four DirecTV packages to two.
But DirecTV also raised their prices by $10 a month. DirecTV Now’s cheapest tier, “PLUS,” is now $50 a month and includes broadcast stations, Turner channels, and HBO. The other option, “MAX,” costs $70 a month has everything in the cheaper tier plus regional sports networks and Cinemax.
DirecTV also dropped A&E, AMC, Discovery, and Viacom programming from its bundles. People who want popular channels like Discovery Channel, the History Channel, or Animal Planet could switch to AT&T’s WatchTV. But WatchTV isn’t branded DirecTV and it’s not pitched on DirecTV’s site, so AT&T may be missing a chance to keep potential customers who are looking for those channels. And people can find cheaper options than both DirecTV tiers at competitors Sling TV, Hulu with Live TV, YouTube TV, and Fubo TV.
Brand confusion at AT&T
AT&T has had branded challenges since it acquired DirecTV. Originally, AT&T thought it would be able to entice new customers with a DirecTV product and mobile bundle. But people don’t buy those services that way, as the company itself has acknowledged.
A director who worked in marketing said the strategy to sell DirecTV and cellphone packages always seemed disconnected, especially as AT&T started pushing harder for wireless sales. The teams slapped clunky banner ads on the top of DirecTV websites, but many consumers didn’t associate the two products with each other or even know that AT&T and DirecTV were one company. AT&T has looked into rebranding DirecTV with a new name, said the director.
A source close to AT&T told Business Insider there’s little confusion that AT&T offers DirecTV and WatchTV. Customers can sign up for DirecTV and WatchTV services at all AT&T retail wireless stores, the source said.
Read more: ‘End us now’: DirecTV employees fear its death as AT&T gets ready to build off its giant WarnerMedia deal
But analysts say AT&T needs to do better to educate people about WatchTV.
BTIG analyst Rich Greenfield said he expects AT&T to ramp up its marketing of WatchTV, hopefully with a simplified message about its streaming offerings.
The higher-priced DirecTV Now does have benefits. Both options include HBO (now owned by AT&T). In so doing, DirecTV Now may cannibalize HBO-only subscriptions.
“I don’t think AT&T has yet figured out their complete go-to-market strategy when it comes to WarnerMedia, DirecTV Now, and how it will tie into wireless subscribers,” media analyst Dan Rayburn told Business Insider.
AT&T will compete with NBCUniversal, which will launch a streaming service in the first half of 2020, and with Disney+, which will launch in late 2019.
AT&T is also promising that WarnerMedia will launch a streamer at the end of 2019, and consumers will get three more tiers of service to choose from.
So AT&T will be managing two DirecTV Now streaming tiers, three WarnerMedia tiers, Watch TV, and HBO Now.
That’s a lot of choice for consumers in a pay-TV industry that’s already highly fragmented.
SEE ALSO: ‘End us now’: DirecTV employees fear its death as AT&T gets ready to build off its giant WarnerMedia deal
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