Barely a month after its launch, DirecTV Now already boasts more than 200,000 subscribers, beating AT&T's initial expectations. According to the carrier, this figure only involves paying customers and the period ending Dec. 31, so the overall number of subscribers is significantly larger, indicating the potential of the platform as a cash cow.

The better-than-expected performance may be surprising especially if one considers the fact that streaming services such as Netflix are experiencing sluggish growth in the United States. Aside from the more direct competition posed by cord-cutters such as PlayStation Vue and Sling TV, DirecTV also has an overlapping claim to the target market of the media streaming service along with Amazon Prime and Hulu.

What is DirecTV Now?

DirecTV is considered an internet TV streaming service. Like the PlayStation Vue and Sling TV, the platform seeks to disrupt the traditional cable TV landscape with a diverse programming that includes live sports, movies and TV shows. These are streamed through the internet and supports mobile devices aside from TV.

The service is considered a hybrid model that combines live TV streaming with on-demand entertainment. The bandwidth consumed by DirecTV Now does not count against AT&T's data plans.

Positive Response

DirecTV Now's positive reception can be attributed to the manner by which AT&T has aggressively promoted the service. First, it offered a limited number of Apple TVs to the first tranche of customers who signed a three-month contract while early birds who opted for a month's subscription got an Amazon Fire Stick.

Programming and pricing were also quite appealing when DirecTV was first launched. For $35, subscribers got to enjoy more than 100 channels in comparison to what was being offered by the competition. The price has been increased to around $60 under its GoBig package but it is still lower than competing plans. PlayStation Vue's Ultra subscription, for example, costs $75 but only promises 90 elite and two premium channels.

Competitive Prospects In The Streaming Market

With its current user base, however, DirecTV Now still holds a small percentage of the streaming market. Sling TV boasts more than 600,000 customers, a figure that also pales in comparison to the number of Netflix adherents. The streaming service reportedly enjoys approximately 93.8 million subscribers.

If DirecTV Now would like to chip away at the commanding lead of its rivals, it should start fixing areas in its service that customers are increasingly frustrated with. Consistent freezing when streaming at specific times is a case in point. Some subscribers are also unhappy upon discovering that it is subject to AT&T's no refund policy.

The service, however, could be the first to benefit when AT&T finally unleashes its 5G LTE technology.

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