NEW YORK – There are already a few online services that aim to replace cable, but they haven’t attracted many users yet. AT&T’s DirecTV hopes to change that with a new service announced Monday.
While just about any person you meet on the street will tell you cable costs too much, the vast majority of Americans don’t think it’s bad enough to cancel. Cheaper online live-TV services, like Dish Network’s Sling TV and Sony’s PlayStation Vue, remain relatively unknown compared with Netflix, Hulu and Amazon. And while they’re easy to order and cancel online and fairly simple to use, they still have drawbacks.
“No one has really delivered the right combination of content, price and ease that will get people to make that call to their current provider and say sayonara,” said Forrester analyst Jim Nail.
It’s unclear if AT&T’s new service, creatively dubbed DirecTV Now, will break out with consumers, especially with another live-TV operation from Hulu coming early next year. And maybe one from Google. Or, who knows, maybe even Apple, too.
The service, which will be available on Wednesday, will initially offer more than 100 channels for a teaser price of $35 a month. But that’s a limited-time offer, and the price for that bundle will nearly double once the deal expires. (Existing customers will be grandfathered in.) AT&T didn’t say when that will happen.
If an online cable service could figure out how to get customers to pay up, it could attract millions of people.
Americans are increasingly dissatisfied with how much they pay for what’s on TV. The number of customers paying cable and satellite operators for TV has dropped nearly 3 million, to roughly 97 million, in the past two years, according to industry experts MoffettNathanson Research.
And plenty of people never signed up for a $100 TV bundle to begin with. Research firm SNL Kagan estimates that about 14.4 million households pay for internet but not TV. AT&T sees the potential market for DirecTV Now as 20 million homes.
But analysts estimate that Sling has racked up fewer than 1 million subscribers since it launched in February 2015. Vue’s numbers are harder to get a handle on, but it’s not on the list of top 10 most popular online video services compiled by research firm Parks Associates. Neither service reports subscriber numbers.
