Exclusive: AT&T stops marketing Watch AT&T, says new service isn’t meant for cord-cutters

AT&T’s “Our Thing” campaign. (Image: AT&T/Handout)

AT&T says its new $93 a month streaming TV offering is intended to replicate the same consumer experience found on cable and satellite services and is hopeful the new service will attract customers who are already satisfied with traditional TV offerings.

After a soft-launch in around a dozen TV markets last year, AT&T formally rolled out its AT&T TV service to a national audience on Monday. The new service offers around 70 basic cable channels for $50 a month for 12 months with a two-year commitment.

That price jumps to $93 a month after the first year. Taxes and fees are not included in the price, nor is broadband Internet service, which is required to access AT&T TV on traditional television sets.

What is included is an Android-powered set top box, which gives AT&T TV customers access to thousands of apps from Google’s Play Store, including Netflix, Amazon Prime Video and Hulu. But only one box is included with a subscription; subsequent boxes, which are needed for additional TV sets in a home, cost $120, though the company says customers can pay for them on installment.

If that sounds a lot like traditional cable TV service, that’s not an accident: In an email sent to The Desk on Monday, AT&T spokesperson Daphne Avila said AT&T TV is designed to lure people away from traditional cable and satellite with an Internet-based service that “marries the feel of a traditional pay TV service with the flexibility of an OTT (Internet-based) streaming app.”

“Customers who are looking for a service designed around live TV, while also integrating their favorite streaming apps, on-demand content and voice control can have the best of all worlds through AT&T TV,” Avila said.

The service won’t be marketed to cord-cutters, a small but growing segment of the pay television landscape. Avila said the majority of homes in America still subscribe to traditional linear TV service like Comcast, Charter/Spectrum and Dish Network, and AT&T is focusing its marketing efforts on these customers with a single experience that combines traditional live TV service with an Internet-based offering.

“This is why our largest target for AT&T TV is existing cable customers who, with a traditional set top box, may be managing multiple remotes and constantly having to switch inputs back and forth as they go between live TV and streaming their favorite shows and movies,” Avila said.

But customers can also have that experience without AT&T TV, and for a lot cheaper. The cost of a basic Roku set-top box is $30; a similar device from Amazon is $40 a month. Both offer near-universal remotes, access to thousands of streaming apps — including AT&T TV Now, the company’s cheaper $65 a month service — and a host of even-cheaper TV services, some of which offer just as many channels and more features than the new AT&T TV.

YouTube TV, for instance, offers more than 70 basic cable channels and unlimited cloud storage space for $50 a month, a flat fee that includes taxes and fees and doesn’t go up after 12 months. AT&T TV, on the other hand, offers the same number of channels and 500 GBs of cloud DVR space for $50 in the first year and $93 in the second year. AT&T requires a two-year contract; YouTube TV doesn’t.

YouTube TV and Hulu with Live TV also include a handful of regional sports networks as part of their basic packages, and the channels don’t require customers to pay a separate fee to access them. AT&T offers regional sports channels, but they aren’t available to customers of the $93 a month package. AT&T also requires customers pay a regional sports fee if they’re available in a package, even if customers don’t watch the channels or even want them.

Still, AT&T says it feels confident its new service will succeed — even after locking customers into a contract that will inevitably result in a drastic price increase in the second year.

“We feel really good about how we’re competitively positioned and the value AT&T TV provides – both promotionally and starting in month 13,” Avila said.

To bolster the presence of AT&T TV, the company said it would immediately stop marketing AT&T TV Now and another service, Watch AT&T.

On Monday, the company briefly stopped allowing new customers to sign up for Watch AT&T, a skinny linear streaming TV service that offered around 30 channels for $15 a month. The service was previously made available to certain AT&T wireless customers for free.

An AT&T spokesperson said the company allowed new customers to sign up for Watch AT&T after a brief maintenance period.

“While we won’t be marketing Watch or AT&T TV Now to new consumers, they will continue to be available to our customers who use them today,” Avila said.

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