Nearly lost in what felt like a 10-terabyte download of information from AT&T Monday about its new virtual pay-TV service, DirecTV Now, were subtle hints from the operator about what it plans to do with the copious user data it will be gathering.
Speaking at AT&T’s invitation-only launch party in New York City, Enrique Rodriquez, executive VP and CTO of AT&T Entertainment, described one not-so-sinister motive—to create a user experience that some tech blogs are comparing to Netflix.
“The experience will get better and more relevant to you the more you use the platform,” Rodriquez said, describing the platform’s recommendation engine.
As for other uses for the data, Rodriquez was a bit more coy. “Our ability to personalize and to target the advertising to every device—not just every consumer—is significantly higher than it has been in the past,” he conceded.
AT&T, he added, will “understand what you as a consumer are enjoying and both serve content that’s likely to be relevant to you as well as advertising that will have a higher effect on you.”
While AT&T went into exhaustive depth on its new service’s pricing and features, it didn’t offer too much insight as to how such targeted advertising will change the service's bottom line.
Analysts have estimated that monthly nut wouldn’t even cover content licensing costs, let alone the infrastructure AT&T needs to maintain to support the live-streaming service. AT&T is offering one of its premium level tiers—100-plus channels—at a promotional rate of $35 a month. That tier regularly goes for $60 a month.
The base-level tier -- non-promotionally priced at $35 a month -- includes more than 60 channels that collectively cost, according to SNL Kagan, just over $29 a month to license.
For his part, Rodriquez conceded that the inclusion of targeted advertising represented “an entirely new cost structure for AT&T.”