New Services Cloud AT&T’s Bet on Pay TV

AT&T knew it was buying a melting ice cube when it agreed to acquire satellite-TV company DirecTV last year for $49 billion. But recent moves by HBO, Apple and the National Football League have turned the temperature up a few degrees.

A wave of new TV services delivered over the Internet allow Americans to get prime programming like the hit HBO series “Game of Thrones” and ESPN sports without paying a big cable or satellite bill. That, in theory, means fewer customers for bundles of TV channels like those sold by DirecTV. And unlike cable companies, DirecTV doesn’t have a significant broadband business to fall back on. AT&T is aware of the risks. “The world is going to be broadband -- wireless and fixed -- and that is where we want to be,” said AT&T’s Chief Strategy Officer John Stankey. Telecom and cable analyst Craig Moffett of MoffettNathanson says the new services pose very little threat to traditional pay TV, which will keep losing customers at a very slow rate. But he also says the new offerings from companies that control content have made the industry’s trajectory harder to forecast.