A Wall Street analyst looked at which digital TV package was the best deal for customers - and found a winner
- Traditional pay-TV packages are in decline and new "digital" ones are trying to scoop up customers.
- A wide variety of digital packages have sprouted up, from Hulu with Live TV, to Sling TV, to DirecTV Now.
- Analysts at UBS made a chart to show how good a deal each service is, and the winner was a DirecTV Now package (especially if you're an AT&T customer).
As pay-TV subscribers drop their traditional cable or satellite packages at an accelerating rate, a new type of TV bundle is trying to catch those erstwhile consumers and bring them back into the fold.
These digital ("virtual," "over-the-top") packages have similar channels to old-fashioned bundles, but deliver their entertainment over internet data like Netflix does. You watch them using apps on your smart TV, streaming box (like Roku or Apple TV), smartphone, or laptop.
And they are poised to be a real force in the market, with UBS estimating they will have almost 5 million subscribers combined by the end of this year, and 15 million by the end of 2020.
One of the big advantages of these digital packages, in the early stages, has been that they have a wide variety of price points and channel selections. But that also makes it harder to understand which one is the best deal.
Personally, I'd recommend trying as many as you like, since they all have a free trial and are easy to install. If you already have a streaming box, you don't have to install any additional equipment. But it can still be hard to judge value.
To help, analysts at UBS led by John C. Hodulik tried to put the value proposition of these bundles into perspective with a handy chart distributed this week. On one axis, the chart shows the price of each bundle, and on the other axis, it shows the "desirability of included content." (To assess "desirability," UBS looked at what percentage of the past 12 months of general TV viewing was taken up by the channels included in the package.)
It basically looks at how many hours you spend watching TV versus how much you pay per month.
That's not a perfect measurement, since not every hour you spend watching TV gives you equal enjoyment. For instance, if you're a hardcore sports fan, the hours you spend watching your favorite team might give you much more enjoyment than the hours you spend watching two teams you don't care about. Nonetheless, it's a way better reference than just how many channels there are in a package.
So who won?
"On this metric, the DirecTV Now 'Live a Little' bundle appears to have the best mix for consumers … especially when bundled with AT&T wireless," UBS wrote. AT&T customers rejoice, there's a great deal to be had thanks to the power of AT&T and DirecTV being part of the same company. Though again, I'd use the free trial to decide whether you like the interface and to test reliability.
Here is the full chart from UBS:
