DirecTV Now has announced a $35 price and a lot of content partners, but at least one analyst is skeptical if all of those partners and channels will be included at that price point.
Barclays analyst Amir Rozwadowski pointed out the momentum that AT&T and DirecTV Now have gained in recent months with signing up content partners like Disney, Lionsgate, Starz, Scripps, NBCUniversal and Time Warner – which AT&T is attempting to acquire for $85 billion. But he seemed slightly skeptical that all those partners could fit within that $35 price.
“What we don’t know at this juncture is how many of its content partners, which channels and which feature sets will be included at the $35 price point. From our end, this makes it difficult to compare the service on a like for like basis vs. other OTT services available in the market,” said Rozwadowski in a research note.
Notably, both Fox and CBS have yet to sign on for the service, although CBS has reportedly joined Google’s Unplugged TV service and Fox is on board for Hulu’s upcoming live TV streaming service. Rozwadowski, though, isn’t counting out CBS and Fox potentially joining DirecTV Now soon or perhaps after the service launches in November.
UBS analyst John Hodulik is similarly skeptical about DirecTV Now’s $35 price point, pointing out that the IP-based service will save money as compared to more hardware and labor intensive than traditional pay TV services but, even still, may not be a big money maker.
“We estimate monthly programming costs for DirecTV Now in the low $30 range, similar to the price AT&T will charge, meaning the company will not make much on this service. However, it will avoid costs for satellites, set-top boxes and installations/troubleshooting, while also reaching customers who have left the pay TV market or never joined,” wrote Hodulik in a research note.
Content questions aside, Rozwadowski anticipates DirecTV Now will feature a lot of functionality while being carefully constructed to not eat into DirecTV’s core customer base.
“We expect a robust feature set for DirecTV Now including a new user interface, improved functionality (including a material reduction in key elements such as load time, lenient authentication), limited streams (in order to temper the potential cannabilization of its DirecTV customers), in-season stacking rights, VOD and look-back functionality,” said Rozwadowski.
In the meantime, more specific reports point toward a Nov. 4 launch date for the service and some curious omissions from the service’s list of compatible devices. According to an internal email obtained by Satellite Guys, the service will operate on iOS and Android devices, web browsers, and streaming media players including Apple TV and Amazon Fire TV. But DirecTV Now reportedly won’t work on Roku, which is notable since according to comScore, Roku accounts for half of the streaming device market in the U.S.