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AT&T CEO: Content Rights Last Hurdle for DirecTV Streaming Service

21 Jul, 2016 By: Erik Gruenwedel

Digital content rights, specifically stacking rights to previous episodic programming, remain a work in progress for DirecTV Now, the new subscription streaming video service corporate parent AT&T plans to launch later this year, according to CEO Randall Stephenson.

Speaking July 21 on the company's fiscal call, Stephenson said launch of the un-priced service remained dependent upon third-party license rights, which likely include major broadcasters and cable networks.

As over-the-top video takes off, multichannel video program distributors are fighting back with original episodic programming, in addition to greater stacking rights to third-party episodic content. This competitive market, in which heavy hitters such as Netflix and Amazon Prime Video pay for exclusive access, has upped retransmission rights to all programming.

“It's just a matter of getting all of those things coordinated together and then make sure it's the highest-quality product you can have at launch. But we are confident in that process, and feel good about targeting the end of this year to get that out,” Stephenson said.

The CEO said a beta version of the service targeting millennials and other non-satellite consumers is functional and undergoing testing.

DirecTV Now would compete against online TV services such as Dish Network’s Sling TV, Sony’s PlayStation Vue and Charter’s Spectrum TV Plus.

Meanwhile, DirecTV added 342,000 subscribers in the second quarter (ended June 30), compared with 328,000 in Q1. The gains were not enough to offset 391,000 U-verse who dropped the telecom’s pay-TV service.

DirecTV ended the period with 20.4 million subs, up from 20.1 million in Q1. U-verse ended the period with 4.8 million subs, down from 5.9 million during the previous-year period.

The entertainment group, which includes DirecTV, U-verse and broadband, reported net income of $1.65 billion on revenue of $12.7 billion, compared to a loss of $196 million on revenue of $1.9 billion during the previous-year period.

AT&T closed the $49 billion acquisition of DirecTV during the previous-year period.

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