This chart shows how tiny the margins will be on AT&T’s new $35 streaming TV service

“Despite the (estimated) gross profit margins of DTV Now coming in less than half of traditional video, we believe the product screens relatively better on a return on capital perspective, as it does not require the very costly upfront spend tied to truck rolls, tech. labor, and set-top boxes at the customers’ premise,” Deutsche Bank wrote. “Similar to other OTT products, sign up and activation are a relatively simple (and capital efficient) process, also (likely) eliminating the need for multi-year contracts (as is often the case with traditional video) to lock in customers.” – Nathan McAlone, Business Insider

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