Tuesday, November 29, 2016

Cord Cutters Rejoice In Competition

For those that have cut the cord to cable TV, a new competitor may be trying to woo you back.  The acquisition of DirecTv by AT&T has opened up a new streaming service of cable channels called DirecTv Now.  And with an introductory price of just $35 a month, subscribers will get access initially to 60+ channels; spend a little more and get more packages of services.  Of course there is the added fee of broadband access and AT&T is offering its customers no data charges to access the service.  That is a huge win for AT&T Wireless and DirecTv Now customers. Data streaming costs could potentially add to customer spending should they choose these streaming services over cable. 

DirecTv is the latest entrant in the streaming business for live channels.  They will be competing with Dish Network's Sling TV and Sony's Playstation Vue.  If live isn't important and on demand is what you care about, then you can always continue subscribing to Netflix, Amazon Prime, Hulu, and others.  But should live streaming become a lucrative business, expect these services to try and build out their business to include access to live channels, too.

Can cable television operators like Comcast and Charter find subscribers coming to them or fleeing for these streaming services?  It depends on what low cost packages they offer to retain their value proposition.  Unfortunately where I live, Comcast has announced plans to raise fees for its various services.  Comcast and others will have to rely on its other businesses to grow.  What affect this cable price increase has on its subscriber base will be seen next year in its quarterly earnings statement.  I fear they may be hurt as streaming services like DirecTv Now take a bigger and bigger bite from their cable business. 

DirecTv Now isn't taking their new business for granted.  Reaching out to younger demo audiences, they have created an exclusive channel around pop music star Taylor Swift.  Expect more content exclusivity to be announced across all competitors to woo customers to subscribe and retain their respective services.  Competition will be good news overall for customers.