AT&T recently announced it’s slimming down its DirecTV Now video content offerings while rising prices on packages that are gaining HBO access, but shedding other popular channels.
Prices are up $10 for the live TV streaming service, with the lower tier increasing to $50 per month and top tier costing $70 per month. Notably, both offerings now include HBO (which costs $15 per month with the standalone service of HBO Now), but AT&T is dropping content from Discovery, Viacom and AMC Networks.
These include popular channels like A&E, Animal Planet, AMC, Comedy Central, Discovery, History, HGTV, and TLC, among others.
The move comes shortly after a U.S. appeals court cleared AT&T’s $81 billion purchase of Time Warner late last month, and is not totally unexpected Wells Fargo Senior Analyst Jennifer Fritzsche pointed out in a Thursday note to investors.
Fritzsche indicated that while the price increases will likely result in greater customer losses, it will be the less profitable subscribers who leave.
“While we recognize that price increase is not always a welcome change, we believe it is key for T to attract the “right” content customers vs. those that will become constant content
switchers which have no loyalty to a brand,” Fritzsche wrote.
WarnerMedia plans to launch its own streaming service in late 2019, so “building this sticky customer base is especially important” ahead of that, Fritzsche said, particularly with new competition coming in from Apple and Disney among others.
However, she noted that whether or not HBO (and Cinamax on DirecTV Now’s Max package) is enough to attract and keep customers who are losing the other popular content, remains to be seen.
AT&T did note that current DirecTV Now customers who do not switch their plans can keep the channels they currently receive, but those will not be offered to new subscribers.