T AT&T Inc

By Geoffrey A. Fowler 

Want to cut cable? Prepare to replace it with something that looks a lot like cable.

The world's largest pay-TV company, AT&T, is getting into the cable-cutting business with an app called DirecTV Now. For as little as $35 per month, you can turn on your big-screen TV or your phone and stream a lineup of live channels that comes close to basic cable.

But just as we've long endured with cable companies, there's no way to get CNN and "South Park" without also paying for "Doc McStuffins" and extreme couponing. My dream of cable cutting looked different: A tech company -- Steve Jobs! -- was going to completely reinvent the way we watch TV. I would pay for just the video I wanted, and it would save me boatloads.

In 2016, cable cutting looks a lot less like salvation, and more like a few new heavily compromised TV bundles. If you do it at all, you'll want to take care that it doesn't end up costing you more.

Testing it for a few days, I found while DirecTV's bundle might seem like a sweet deal for $35, the service, at launch, lacks features we've come to expect from that cable box. There's no DVR recording to watch our favorite shows later, or guarantee of a clear picture. There's no CBS, uh, only the most popular network out there, home to the NCAA basketball tournament. And the local programming it does offer may not be available in your area.

DirecTV Now isn't the only internet TV bundler out there. It joins Sony's PlayStation Vue and Dish Network's Sling TV, which has a "skinny" bundle that starts as low as $20.

There is progress here. As recently as last year, much of the sports, news and other live content we care about just wasn't available online without a cable TV subscription.

DirecTV Now does away with traditional cable headaches of long-term commitments, credit checks and equipment installation: It's possible to subscribe to live TV just to watch on your phone, if that's your thing. And you can quit with a few taps rather than a passive-aggressive sales call.

But forget the dream of ultimate customization. Today we can pay by the channel only with a few key streaming apps, like the $15-a-month HBO Now and the $7-a-month CBS All Access. Pretty much every other cable staple has come to the internet locked in a bundle.

And as we learned from the cable guy, bundles add up. DirecTV Now's new streaming packages start at $35 a month, but if you want the Weather Channel, the regular price leaps to $50 (it's currently available for less in a promotional offer). Want HBO too? That'll be $55, please. And you still have to pay for broadband internet.

Cut Cable... on Your Terms

If your goal in cutting the cord is to spend less than $20 a month, you can do it; just prepare to compromise. I recommend getting an antenna that picks up local network affiliates -- CBS, NBC, ABC, Fox, PBS and maybe a few more. (Check your home's reception at tvfool.com.) Ask family members who subscribe to cable to lend you their login credentials, which will let you watch shows on demand via channel-specific apps. Then I'd spend my money on $10 Netflix and $8 Hulu, the two on-demand services with the most bang for your buck. If there's a show you can't live without, buy a season pass on Amazon or iTunes.

DirecTV Now and its cable-like streaming rivals are best suited for people who know what they want and aren't afraid to pay for it. But to avoid overspending, make a spreadsheet. Each service has a different combo of bundles. PlayStation Vue, the only one to include local CBS channels, starts at $40 per month. News junkies will get the most from DirecTV Now's basic $35 plan. Sling remains the cheapest way to subscribe to ESPN over the internet -- just $20.

That illustrates the difference: Sling is about cheap plans you add on to, while DirecTV competitively prices fuller-feeling bundles. For just $40, you can get a DirecTV package including HBO, Bravo, CNBC, MTV, ABC and E! that Sling would charge $70 for. (DirecTV also offers HBO as a $5 add-on when everyone else charges $15, including HBO itself.) PlayStation Vue's lineup, which originally stood out for streaming local networks, now seems pricey.

All let you stream to the most popular hardware, including phones and tablets, Apple TV, Amazon Fire TV, and Roku (coming soon for DirecTV Now). Only PS Vue is available on a PlayStation, but the interface is frustrating for nongamers. DirecTV Now will let customers who also use AT&T's wireless service stream to phones without eating into their data plans, a move that rankles open-Internet advocates. Sling offers a similar deal for T-Mobile customers.

All three promise to deliver HD quality, but it's hard to compare how well they deliver because there are so many factors -- their own systems, my Wi-Fi setup, how much my neighbors are using the internet, the phases of the moon. In my experience, both Sling and PS Vue can go down. Before it launched, AT&T offered me 36 hours to test its service with an Apple TV, during which it went down repeatedly. The company says it was working on its systems behind the scenes and expects to be fully functioning now.

DirecTV Now's on-screen experience on the Apple TV also took getting used to. There's a cable-box channel guide, and swiping left or right changes channels swiftly. But it took me longer to discover other options, like setting favorite channels and shows. DirecTV Now's menus are clean, but I still prefer Sling's slick interface, which focuses more on personalization.

Using DirecTV Now, what I missed most was my DVR. DirecTV Now includes access to some shows on demand, more within 72 hours of airing. But it's hard to tell if they have what you want. PlayStation Vue's service comes with a cloud-based DVR; Sling says it will offer a DVR service soon and DirecTV says it will have one in 2017.

For many households, no internet-TV option will be easier or cheaper than cable, especially if you also rely on a cable company for your internet connection. Before you quit cable cold turkey, try calling your provider to renegotiate and get just what you need. Many are offering money-saving "skinny" bundles. I still do this for my own local Comcast, with a package that includes internet, local channels and HBO for $65 a month.

My cable-cutting dream may be more of a fantasy. Still, I like that streaming TV services are increasing competition in a pay-TV industry that most of us trust about as much as a used-car salesman. If I can choose between five or six TV providers, and drop them without notice, I should be better off. But don't kid yourself: It's still cable.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com

(END) Dow Jones Newswires

November 30, 2016 15:21 ET (20:21 GMT)

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