It is no secret that consumers across the country continue to shun traditional cable in exchange for streaming platforms, all to keep a few bucks in their pockets.
DirecTV, which is owned by AT&T (T) , is one of the many cable providers that recently faced a mass exodus of customers as a result of this roaring trend. According to a March report from Leichtman Research Group, DirecTV lost 1,800,000 cable customers in 2023.
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As consumers continue to make it clear that they won’t be returning to cable anytime soon, DirecTV is switching gears to attract back-fleeing customers.
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The cable provider is joining a popular trend in streaming by offering its own free, ad-supported streaming service called MyFree DirecTV, which is aimed to be a direct competitor of other free streaming platforms such as PlutoTV and Tubi.
MyFree DirecTV offers customers over 90 free channels such as MovieSphere, Fox Weather, Court TV, etc., and the app will be available through devices such as Roku, Apple, Android, Amazon Fire, and also the DirecTV app.
Even though the service is free, the company also plans to add “genre-based paid programming packages” to the platform, where customers can pay for “personalized TV subscriptions” in addition to the content offered on the app, according to a press release.
“The availability of MyFree DirecTV is the building block of the future for us as we tap into an entirely new audience through this new freemium experience going beyond the traditional pay TV customer,” said Kent Rees, general manager of MyFree DirecTV, in the press release.
Consumers are flocking to free streaming apps
The move from DirecTV comes during a time when free, ad-supported streaming platforms, which make money solely from advertising, are rapidly growing in popularity amongst consumers.
For example, Paramount, which owns PlutoTV, recently revealed during an earnings call on Nov. 8 that it saw PlutoTV reach “record engagement” during the third-quarter of 2024. This contributed to Paramount facing an 18% year-over-year increase in direct-to-consumer advertising revenue.
“For Pluto, we're continuing to see a strong performance,” said Paramount Pictures CEO Brian Robbins during the earnings call. “Year-to-date, Pluto delivered its highest consumption ever, up 5% to 5.6 billion viewing hours. Growth is being driven by increased use of video-on-demand with more available content, enhanced discoverability and a better user experience.”
Related: Spectrum is relying on a generous offer to win back customers
Fox also revealed during an earnings call on Nov. 4 that its ad-supported streaming platform
Tubi faced “strong engagement” during its fourth quarter this year, which resulted in the platform growing its revenue by 19% year-over-year during the quarter.
“Based on the current revenue run rate, we're looking for Tubi to cross the $1 billion revenue mark this fiscal year,” said Fox CEO Lachlan Murdoch during the earnings call.
DirecTV may soon suffer another major loss
DirecTV’s new MyFree DirecTV app may be exactly what the company needs to help repair some of the losses it has faced from the growing threat of streaming. Especially after its plan to merge with Dish Network, which was announced in September, may soon fall through the cracks.
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The deal involves DirecTV paying $1 (yes, $1) to acquire EchoStar’s Dish Network, which includes Dish TV and Sling TV. Both companies were to agree on exchanging their debt for new debt at a discounted rate, taking a haircut of roughly $1.5 billion on the debt.
However, according to a recent report from Reuters, DirecTV is planning to abandon the deal by Nov. 22 if Dish bondholders don't agree to accept the company’s debt exchange offer of $1.5 billion, which they rejected on Nov. 12.
"A successful exchange was a condition for acquiring the Dish video business," said a DirecTV spokesperson in a statement to Reuters. "Given the outcome of the EchoStar exchange, DirecTV will have no choice but to terminate the acquisition of Dish by midnight on Nov. 22."
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