Company will cut three of its five streaming TV packages
DirecTV is restructuring the pricing model of DirectTV Now its streaming TV service. The satellite-turned-streaming company is cutting its package options from five to two: DirecTV Now Plus ($50 per month for 40+ channels) and DirecTV Now Max ($70 per month for 50+ channels that include regional sports networks). Both packages will include HBO.
Current subscribers of DirecTV Now can keep their current lineup, while first-time customers will choose from the new options. If existing customers decide to keep their current package, their monthly fee will increase by $10, which comes less than a year after a $5 price hike.
The company’s original packages include: Live a Little (65+ channels), which will cost $50 per month; Just Right (85+ channels) rises to $65 per month; Go Big (105+ channels) will be increased to $75/month; and Gotta Have It (125+ channels), which will be available at $85 per month.
Customers will be informed of the change sometime this week via email, according to Cord Cutters News, which first broke the news. AT&T did not respond to request for comment.
The new pricing model comes as AT&T tries to make DirecTV Now profitable. At last year’s Recode’s Code Media conference, Michael Nathanson’s analyzed DirecTV Now’s $35 monthly package and estimated that when accounting for subscriber acquisition costs, cost to deliver the content, customer service expenses, and content, AT&T was losing about 26 cents per subscriber at its current cost.
In December, AT&T CEO Randall Stephenson hinted at the pricing shift during an investment conference, saying that service would be “thinning the content out” to channels that are “relevant to customers.” The pricing change comes after DirecTV’s Q4 earnings report revealed that DirecTV Now had lost more than 250,000 customers.
In addition to the revamped OTT packages, AT&T will sell traditional DirecTV packages as streaming-only versions, Cord Cutters News also reported. Customers will now have the option to get DirecTV packages via OTT, though the pricing will be the same as the traditional versions.