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AT&T’s DIRECTV Now Lacks Cloud DVR Service

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DIRECTV Now lacks DVR feature

AT&T’s (T) DIRECTV Now over-the-top (or OTT) service is a new video streaming service that was launched in November 2016 and features over 100 channels. AT&T penetrated this market, which includes Verizon’s (VZ) OTT offering, go90. DIRECTV Now currently lacks a cloud DVR (digital video recorder) feature and only offers a limited ability to pause live TV, which is viewed as a major flaw.

The cloud DVR service allows viewers to record shows and store them for when they want to view them. This service is currently available on Sling TV from Dish Network (DISH) and PlayStation Vue from Sony (SNE). It’s expected that this feature will be available on DIRECTV Now in 2017.

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Rising trend of online television services

As the popularity of streaming services such as Netflix (NFLX) grows, viewers are watching more and more content online, because it’s cheaper. A cable bill could be ~$100 or more per month, while a basic Netflix plan costs only ~$8 per month.

According to Digitalsmith’s 2Q16 video trends report, and as the chart above shows, Netflix leads the OTT market with a share of ~54%, followed by Amazon (AMZN) with 24%. Hulu, Time Warner’s (TWX) HBO Now, and Shomi are smaller players in the market. However, given Hulu’s proposed online television service, the streaming market could be poised for an upheaval.

DIRECTV Now versus peers

Comcast (CMCSA) believes that it’s always been prepared to meet the rising competition in the video business via product offerings based on market segmentation and content investment, including its acquisitions of stacking rights and TV Everywhere rights. As a result, Comcast doesn’t view DIRECTV Now as a threat.

Dish has also stated that it views the DIRECTV Now service as a “bigger bundle” targeted toward traditional pay-TV subscribers. In contrast, Dish’s Sling TV is more of a skinny bundle that gives flexibility to its subscribers.

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