attnewAT&T already has hit the December target the company had set for its DIRECTV NOW sales figures, which launched just last week, said AT&T CEO Randall Stephenson today. Stephenson made his comments at the UBS Global Media and Communications Conference, which was also webcast.

DIRECTV NOW lets customers stream pay-TV content to mobile devices without requiring the customers to also purchase a traditional pay-TV subscription. Customers pay between $35 and $75 monthly for up to 120+ channels and also have the option of purchasing Cinemax or HBO for an additional $5 monthly.

According to Stephenson, AT&T is “getting good attach rates” for Cinemax and HBO on the offering.

AT&T DIRECTV NOW Sales Results
For months now, subscribers to AT&T’s traditional DIRECTV pay-TV service have had the ability to stream content to mobile devices – and according to Stephenson, that’s also proving to be a popular option. AT&T saw 40 million mobile streams in October – a 40% increase over September and a trend he expects to continue.

Stephenson downplayed the possibility that AT&T will cannibalize its traditional DIRECTV base with the less expensive DIRECTV NOW offering. He noted, for example, that DIRECTV NOW only supports two simultaneous streams, which is less than some families would want. He also noted that DIRECTV NOW has been particularly popular with people living in multi-dwelling units, whose residents tend to be young adults who might not subscribe to a traditional pay-TV service. People such as those, he said, were the target market for DIRECTV NOW.

“We’re hitting the demographic we wanted to,” said Stephenson.

Stephenson also downplayed concerns expressed by some people in the financial community about DIRECTV NOW profit margins.

directv now channel line-up
AT&T DIRECTV NOW Channel Line-up (Source AT&T)

“DIRECTV NOW is a software-centric business,” he said, adding that AT&T expects to see “virtually all subscribers” sign up online and that the service will not require truck rolls or customer premises equipment. That’s very different from the traditionally capex-heavy telecom business and as a result, he said, “we’re content with lower . . . margins on this” – early on, at least. Over time, the company hopes to scale the platform and gain  new revenue opportunities as a result, he said.

“One thing we have and will get better on is viewership data,” said Stephenson.

That data could enable tighter consumer targeting in comparison with what is traditionally possible today with other content platforms, which means AT&T may be able to attract substantial advertising revenues.

Stephenson sees AT&T’s plan to purchase Time Warner providing further fuel for the company’s mobile video strategy. In particular, the acquisition should provide “premium long-form content,” which according to Stephenson, will be in demand from consumers.

Not everyone agrees about the appeal of long-form content for mobile video viewers, however.  Also at the UBS conference today, Verizon CEO Lowell McAdam argued that mobile viewers are looking for short-form “snackable” content – an area that has been a key focus for Verizon.

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