Author(s): Raghu Gopal
Mobile television is not particularly new, but in Europe and the US, it has had more stops than starts. Services have emerged based on specifications such as MediaFLO, DVB-H and LTE Broadcast, but market interest has been soft, often caused by limited content choice and immature technologies and devices.
But there's no doubt that mobile video is in demand. More than 70 percent of mobile data consumption is driven by over-the-top video services such as Netflix and YouTube. Bigger and better devices, faster mobile networks and lots of content choice have combined to alter consumer behaviour.
AT&T's new DirecTV Now service, launching today, is timed just right, catering to a mobile-first audience looking to cut the cord from traditional broadcasters. With prices starting at $35 for 60 popular channels, AT&T is bringing content to the screen of a subscriber's choice. It can be the traditional living-room television or a tablet or smartphone.
The operator is certainly highlighting the potential of the latter choices. Users of DirecTV Now can doggy bag the content, taking the same access on the road. The service is open to all mobile subscribers, but it's particularly enticing to existing and would-be AT&T wireless subscribers. Users of AT&T's cellular network get zero-rated access to their DirecTV subscription content, meaning there are no charges for data access.
AT&T is pushing ahead with this content-connectivity bundle, without ostensible concern of creating friction with US regulators and Net neutrality proponents. For now, such favouritism is not illegal and could become popular, enabling new business models for access and advertising.
AT&T executives have certainly calculated the potential stress on its network, but it will be interesting to see how the telecom operator juggles technologies to maximise its airwaves. T-Mobile's Binge On offering, which provides data-free access to video content such as Netflix and YouTube, has been immensely popular: T-Mobile USA has 33 million post-paid subscribers, compared with AT&T's 77 million. AT&T will have to maintain service quality for existing subscribers while gaining new data-intensive users. Nonetheless, DirecTV Now could be an attractive offer for consumers. It may also help the operator prevent churn and take some subscribers from all three major wireless operators in the US. If the service proves a hit, AT&T's main rival, Verizon, will need to expand its video content to compete.
The US market could see disruption in 2017 as video broadcasters such as Comcast and Charter Communications begin offering wireless services, and wireless operators such as AT&T and T-Mobile stress the availability of video access. There's an interindustry invasion to watch out for, and AT&T has a presence in both domains. Its intentions couldn't be more direct.