AT&T is going to give away free Apple TVs and Amazon Fire TV Sticks with its upcoming $35-per-month streaming TV service, DirecTV Now, according to leaked documents viewed by Variety.
AT&T made waves in the industry last month when it announced that DirecTV Now would give you 100+ channels for a mere $35 dollars a month, undercutting many rivals on price. (Wall Street was expecting it to cost ~$50 per month, according to analysts at Macquarie)
One way AT&T says it will be able to make the economics work, at that price, is by cutting out legacy equipment like satellite dishes. DirecTV Now will be delivered over the internet wherever you are, no cable or satellite required, but that means to watch it on your TV you need either a streaming box (like an Apple TV), or a smart TV.
But not everyone has a streaming box ready to go. With this leak, it seems that AT&T will try to bridge the “streaming gap” for customers by simply giving them a streaming box for free.
And make no mistake, this is a monster giveaway.
Variety says that people who sign up for three months of DirecTV Now will get a free Apple TV. DirecTV Now is only $35 per month, which means AT&T is only asking for a $105 commitment. An Apple TV costs $150 retail, all by itself. And if you don’t want to commit to three months of DirecTV Now, you can sign up for one month ($35) and get a free Amazon Fire TV Stick. That would cost you ~$40 retail.
The fuzzy details
We still don’t know exactly which channels will be on DirecTV Now. AT&T has already signed deals with HBO, Discovery, NBCUniversal, Turner, Viacom, Disney, AMC, Scripps, Starz, and more. So it seems like all the big guns will be signed up for launch. But exactly which channels they are providing is still up in the air. (An ad for the service viewed by Business Insider showed that ESPN will be on it).
DirecTV Now will have a “72-hour catch-up window,” according to Variety, which will let you watch shows on-demand for three days after they are. However, there may be limitations on this feature. Variety says that ESPN isn’t on that catch-up list. DirecTV Now will also have an on-demand library of “up to 14,000 titles,” according to Variety.
DirecTV Now will let you have a 7-day free trial, according to an ad viewed by Business Insider (that has since been taken down).
The future is streaming
AT&T has big plans for DirecTV Now, and thinks it will be the company’s primary TV platform by 2020, according to Bloomberg.
In the immediate time period, a recent report from MoffettNathanson estimated that DirecTV Now could snag 11 million subscribers.
Here’s the potential breakdown: 2 million cannibalised from DirecTV, 6 million from other pay TV, and 3 million “cord-cutters.”
The 2 million subscribers transferred from DirecTV’s traditional packages should be a concern, but 11 million is a huge number, especially considering the current market leader, Sling TV, recently passed the 1 million subscriber mark, according to Bloomberg.
AT&T declined to comment.