Cord cutters will soon receive a new option for obtaining video programming through fixed or mobile online platforms with AT&T's announcement Tuesday that it will offer an online, over-the-top version of its DirecTV service later this year. Last year, AT&T became the nation's top provider of multichannel video program distribution (MVPD) services through its $45 billion acquisition of direct broadcast satellite TV operator DirecTV. The company's recently announced plan corresponds with similar moves by cable and satellite MVPDs to attract or win back cord cutters who have abandoned traditional cable subscriptions in favor of low- or no-cost online programming offered through Netflix, Hulu, and other streaming services. Although AT&T declined comment on pricing and program lineups for the new service, observers say the new streaming option is likely to resemble SlingTV, a slimmed down, online version of the DISH Network satellite TV service that now serves 600,000 subscribers.

AT&T's new streaming service, known as DirecTV Now, will require no equipment and will not require customers to be existing subscribers of either DirecTV or AT&T. DirecTV Now will be marketed in three packages: (1) a "full fat" version which includes much of the content offered through the DirecTV satellite service, (2) a "mobile first" version which features content optimized for mobile viewing on smart phones, and (3) a free "preview" service funded by advertisements. Unlike many competitive streaming services, DirecTV Now will offer live program streams alongside films, television reruns and other content. An AT&T official confirmed that the company is negotiating program carriage rights with several media firms and has "signed some deals" for the service, which is slated to debut during the fourth quarter.

Explaining, "we often hear from customers who want more content from streaming services, or who can't get or can't afford a traditional pay TV service," John Starkey, the chief executive of AT&T's entertainment division, affirmed, "we intend to offer customers a quality pay TV experience, including top channels, sports and more, with increased value and [the] flexibility of pure online streaming."