(03-14-2019 02:30 PM)orangefan Wrote:  

(03-13-2019 08:36 PM)solohawks Wrote:  

Quote:Yeah...I don't how AT&T is going to get more subscribers either. Unless Hulu Live TV and Fubo and UTUBE TV up their rates to equal $50. They may soon do that as it seems they are losing money with the rates they charge now with all the sports channels offered.

The $50 package is a poor man's YouTube TV with HBO

The $70 package is a poor man's PS Vue Core with HBO and Cinemax

AT&T is really banking on HBO being a draw because there are way better options than these two packages for non HBO fans

The $70 plan makes little sense. It consists of the $50 package plus Cinemax and a collection of specialty and regional sports channels. They offer Cinemax as a stand alone add on to the $50 package for $11. They should do the same with the sports channels and turn it into a Sport Tier. If they still wanted to offer the $70 package, they could simply offer the Sports Tier plus Cinemax at a discount over the stand alone add on prices for each. As it is, they are really going to drive away potential customers seeking their desired specialty or regional sports networks.

I do think the $50 package makes a lot of sense. They've trimmed down the number of channels and force you to take HBO. This should increase their margins quite a bit. These services have to be operating on incredibly thin margins. DirecTV may get fewer customers, but they might actually make some money. With Disney taking over Hulu, I would not be surprised to see a jiggering of Live packages there soon. YouTube TV is an incredible value. They've got to be losing a bunch trying to build a subscriber base, but those prices cannot possibly last.

Under an SVOD business model like Netflix, most of the programming costs are fixed. When you add new subscribers (or increase prices) , the additional revenues are mostly profit. Channels usually charge multichannel live services like DirecTV Now and YouTube TV on a per subscriber basis, so there is far less incremental profit from subscriber additions. AT&T and Disney may be able to make money from multichannel live services because they own lots of cable networks. Cable networks are similar to SVOD services - high fixed costs so that revenues from additional subscribers (or price increases) is mostly profit. Indeed, they need these services to defend against subscriber losses from traditional cable and satellite providers.

I agree that the new packages are likely to be profitable, especially since AT&T owns HBO and the Turner networks, I just dont know who would want to pay $50 for the DirectvNow base package when there are so many better options out there. The only people who the $50 package makes since for are people who really want HBO.