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AT&T Aims DirecTV Now Service at Millennials With Lots of Bells and Whistles

AT&T (T) wants to be Ma Streamer.

Five weeks after announcing a deal to acquire Time Warner (TWX) for $86.5 billion, the company once known as Ma Bell on Monday announced the launch of a multichannel streaming service that the telecom operator hopes can offset flat or declining subscribers for its wireless and pay-TV services.

The service, which will go live on Wednesday, targets the roughly 20 million to 25 million households that don't subscribe to any pay-TV service. At the top of that list are young people, those most unlikely to have a pay-TV contract, but also those in urban areas where AT&T satellite TV service DirecTV, which it acquired in 2014, has lagged its cable TV rivals.

"We have a new segment of the market that we want to address, and this platform lets us do that," AT&T executive John Stankey, head of its entertainment group, said at an event held in midtown Manhattan on Monday. "This is the foundation for how we're going to do things in the future."

DirecTV Now will go head to head with Dish Network's (DISH) Sling TV and Sony's (SNE) PlayStation Vue. In the coming weeks, they'll be joined by Alphabet's (GOOGL) Google Unplugged and a similar service from Hulu.

The overarching question for AT&T is whether its ambitious effort to win over mobile users by offering them a do-everything streaming platform will make economic sense.

At $35 per month for 100 channels, AT&T is said to be operating on very slim margins, far slimmer than what its charged for decades through the traditional pay-TV bundle. The list of networks to appear on DirecT Now includes every major content product apart from CBS, Netflix (NFLX) and Amazon (AMZN) .

Of course, both Netflix and Amazon operate online platforms, one very big reason that AT&T has invested so much time and money into DirecT Now.

AT&T's Stankey addressed...


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