T AT&T Inc

By Thomas Gryta and Shalini Ramachandran 

AT&T Inc. said its internet-based television service DirecTV Now will go on sale this week and cost between $35 and $70 a month based on the package of channels that customers select.

The service, which will be available Wednesday, offers four tiers of channels that are delivered to web browsers, mobile phones and streaming devices like Amazon's Fire TV stick or the Apple TV. The smallest package will include more than 60 channels, while the biggest will have more than 120.

"This is the foundation of how we are going to do things in the future," said John Stankey, chief executive of AT&T's entertainment group, at an event in New York Monday. The company became the country's largest pay television provider last year with its almost $50 billion acquisition of DirecTV. AT&T will also continue to sell its traditional satellite DirecTV service.

For a limited time, AT&T is selling a DirecTV Now package of more than 100 channels, usually priced $60 a month, for $35 a month. AT&T said Monday that customers who sign up at the promotional rate will be grandfathered in at that price for "as long as they are a customer."

Customers can pay an extra $5 a month to add premium movie channels HBO or Cinemax.

There are some limitations. The service won't have CBS Corp. channels at launch and the other broadcast networks, like ABC and NBC, are only streamed live in markets where the networks own the local stations. The service also doesn't include a DVR function, but the feature is expected to be added next year.

The details of the service have been a longtime coming. AT&T said almost eight months ago that it would launch the over-the-top version of DirecTV. AT&T said it is also launching an ad-supported free version that samples some of the content of the paid service.

Streaming video to televisions and mobile devices -- eliminating the need for a satellite dish, cable box or annual contract -- is attracting plenty of competition. But unlike Netflix or Hulu, DirecTV Now is intended to provide a full cablelike lineup for households.

AT&T reached

deals to include channels owned by 21st Century Fox Inc., Walt Disney

Co., merger partner Time Warner Inc., Discovery Communications Inc. and others. ( News Corp, publisher of The Wall Street Journal, and 21st Century Fox share common ownership.)

Mr. Stankey said the company is "hopeful and optimistic" that it will soon reach a deal with CBS. He also said the NFL Sunday Ticket package, available on traditional DirecTV, isn't available on the over-the-top service, but said the company is discussing with the league whether it can be added.

AT&T isn't the first to market. Currently, customers can pay as little as $20 a month to stream 31 channels from Dish Network Corp.'s Sling TV service to as much as $75 a month for a bundle of about 100 channels, including HBO and Showtime, from Sony Corp.'s PlayStation Vue service.

AT&T said the launch is the first step of a bigger platform that will allow it to deliver targeted advertising to viewers.

"This is how we are going to keep our pricing down," said Brad Bentley, chief marketing officer at AT&T entertainment division.

Write to Thomas Gryta at thomas.gryta@wsj.com and Shalini Ramachandran at shalini.ramachandran@wsj.com

(END) Dow Jones Newswires

November 28, 2016 18:09 ET (23:09 GMT)

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