AT&T recently announced that their new DirecTV Now subscription live TV streaming service will stream 100 channels for $35 a month.
That is a far cry from the average DirecTV satellite bill. According to The Wall Street Journal the average DirecTV satellite customer pays $118 a month or $1,416 a year. Compare that to just $35 a month or $420 a year.
Throw in a few fees and AT&T will make about a $1,000 less in revenue from every DirecTV Now customer. That could explain the rumors that AT&T will not market the new streaming service to their current customers.
According to The Wall Street Journal not only will revenue be smaller but the profit margins of a typical DirecTV satellite customer is about $42 a month. That means even if all of the $35 a month DirecTV Now bill was profit they would still lose $7 a month.
We do know that there will be multiple packages starting at $35 a month. We have also heard rumors that AT&T will be pushing add-ons and other services to help drive revenue for the new streaming service, but we still do not know what these packages, add-ons, and other incentives are.
AT&T clearly sees the future of TV is not with their current satellite service. Although they may be willing to take a smaller profit margin they are likely hoping to make that up with additional cellular subscribers or through other means.
Hopefully AT&T will release more details of their new streaming service soon.
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