Those in search of the best deal in streaming TV should give AT&T's just-announced WatchTV service at least a once over when it debuts next week. It's so cheap _ as in, completely free for some _ that, even in the land of discount bundles, the streaming package boggles the mind.
The first (and certainly not the last) product of AT&T's freshly consummated marriage to Time Warner, WatchTV includes live and on-demand access to content on 30 channels, many of which the company now owns (CNN, TBS, TNT), that can be streamed on smartphones, tablets and media players (presumably Roku, Apple TV and Google Chromecast).
The full channel lineup doesn't include local stations or sports, but it is packed with popular news and entertainment sources. So A&E, AMC, BBC, Discovery, Food Network, HGTV and Lifetime all make the cut.
Really, though, the most compelling feature is the price. WatchTV will be offered gratis alongside AT&T's revamped unlimited wireless data plans. Those plans, called Unlimited & More and Unlimited & More Premium, are scheduled to launch next week at undisclosed prices.
Later, WatchTV will also be sold as a $15-a-month stand-alone product. That's cheaper than online bundles offered by YouTube, SlingTV, Philo and even AT&T's own cord-cutter-friendly service, DirecTV Now.
WatchTV's price is so good, one might wonder if the company has lost its mind.
It hasn't.
This seemingly too-good-to-be true TV alternative is all about the data _ in more ways than one. For starters, AT&T is using WatchTV to one-up its biggest rivals in the communications industry.
"The unlimited data mobile wars have been going for awhile ... as T-Mobile, AT&T and Verizon encourage people to (buy) the highest tier of mobile services," said Brett Sappington, who studies both traditional and non-traditional pay TV providers at research outfit Parks Associates.
WatchTV, then, is just the latest incentive that AT&T can use to dangle in front of its (and its competitors') customers to get them to pony up for its priciest wireless plans. The company has 160 million wireless subscribers in the U.S. and Canada, so getting those folks to spend more on their service promises billions in business. For context, in the first quarter, AT&T reported revenue of $38 billion, and more than $17 billion came from its biggest business: mobile.
"If AT&T has to give away a few channels, I think that works for them," Sappington told me.
What's more, AT&T is building a sophisticated advertising product that it's pitching to shareholders and analysts as intelligent enough to siphon money away from digital advertising's biggest behemoths, Facebook and Google. That product's success hinges on AT&T's ability to personalize TV ads to the viewer, giving ad buyers access to the specific households and smartphones they really want to reach.
With Time Warner, now called WarnerMedia, AT&T cannot only give away in-demand channels in the name of mobile profits, it can also throw ads against more content. WatchTV enters the mix and, because of its data-rich gifts, can help the company drive up ad prices.
Whether the data exchange tilts in favor of the customer or the company remains to be seen. Still, it's hard to imagine a scenario in which people turn their backs on totally free TV. Just look at everything we're willing to share with Facebook.
Is WatchTV the plan for everyone? No. But it's just good enough and cheap enough to keep AT&T relevant in TV, an area where the company has managed to hold on to 25 million subscribers, with help from DirecTV Now, despite a marked decline in traditional viewership.
"There has not been a deterioration of people consuming premium content. It's up," said CEO Randall Stephenson at an investor event last week. "Where and how and when they're consuming it has shifted."
At the end of the day, AT&T, he said, is now in a position to deliver premium content to "170 million screens." WatchTV, then, presents a way of delivering that content, and, if successful, helps boost the number of screens in AT&T's war chest.
