Is AT&T’s DirecTV Now a Miss?



DirecTV Now hit by technical issues

AT&T’s (T) DirecTV Now was supposed to stir up the video streaming market and steal market share from rivals such as Sling TV from Dish Network (DISH) and PlayStation Vue from Sony (SNE). AT&T also looked at DirecTV Now as a means to diversify its revenue streams beyond its traditional wireless business. The company lost 268,000 postpaid subscribers in 3Q16. But it’s been a rocky launch for DirecTV Now amid subscriber complaints.

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DirecTV Now subscribers are citing frustrations over technical glitches. Customers have reported that a show hardly streams from start to finish without crashing or freezing. According to a Wall Street Journal report, some customers say they will ditch DirecTV Now if the problems persist. According to the report, others say they will give AT&T the benefit of the doubt and allow it time to make the service better.

How long will DirecTV Now subscribers be patient?

A spokesman for AT&T said that only a limited number of subscribers have been affected by technical glitches. He added that any new technology comes with issues that need fixing. However, AT&T hasn’t provided a timeline for when it expects to spruce up DirecTV Now and make it a service the market expects.

The problems with DirecTV Now threaten to slow down AT&T’s campaign for a meaningful share of the video streaming market. DirecTV Now comes with 100 channels and costs $35 per month, a competitive package that should be attractive to many cord-cutters.

AT&T has also tried to boost the appeal of DirecTV Now by zero-rating the service. That means that streaming DirecTV Now doesn’t count against the Internet plans of AT&T subscribers.

Given its multiple incentives—many channels, competitive pricing, and zero-rating—DirecTV Now was expected to shake the video streaming market at launch, but it has underwhelmed.

AT&T’s other competitors in the video streaming space are Netflix (NFLX), Amazon (AMZN), and Alphabet’s (GOOGL) YouTube.


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