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What’s AT&T’s Plan for Its Primetime Device?

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Primetime goes for $200

AT&T (T) has come up with a tablet device called Primetime that’s designed to encourage people to watch DirecTV Now, its OTT (over-the-top) video service. Primetime costs $200 if you purchase it outright. You can also get the device on an installment plan at $10 per month for 20 months. AT&T allows an alternative installment purchase under a two-year contract plan that costs $30 per month.

Primetime is a low-cost device designed with some significant specifications. It comes with a full HD (high-definition) screen, 2GB (gigabytes) of RAM and 32GB of storage, which is expandable up to 128GB. The device is powered by Qualcomm’s (QCOM) 2GHz (gigahertz) Snapdragon 625 processor.

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Quick access to DirecTV Now

According to AT&T, the TV mode in Primetime allows a quick launch of the DirecTV app (application) for watching television anywhere, anytime. DirecTV Now, which offers more than 60 live channels, costs $35 per month.

DirecTV is AT&T’s competitor in Internet video services provided by the likes of Netflix (NFLX), Sony (SNE), and Dish Network (DISH).

Offsetting pay-TV weakness

AT&T is betting on DirecTV Now to help it make up for the weakness in the traditional pay-TV market, where the subscriber base has been shrinking as people move to consume video on the Internet. Research firm SNL Kagan predicts that the US (SPY) pay-TV industry such as cable, satellite, and IPTV (Internet Protocol television) will shed 10.8 million subscribers by 2021.

According to the most recent data from research firm Dataxis, the US cable pay-TV subscriber base was flat in 1Q17 from a year earlier. The satellite subscriber base fell more than 1.3%, and the IPTV customer base fell 3.1%. In contrast, the OTT subscriber base rose 6.0%, as illustrated in the above chart.

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