Why AT&T Launched a DirecTV Streaming App on Magic Leap’s Mixed-Reality Headset (EXCLUSIVE)

AT&T’s DirecTV pay-TV business has been hemorrhaging subscribers, and its DirecTV Now internet service — which was supposed to help offset the customer exodus on the satellite side — saw its user base shrink 5% in the first quarter amid a rate hike and bundle reshuffling.

So why is the telco spending time and money building an experimental DirecTV Now app for Magic Leap, the massively funded mixed-reality company (in which AT&T is an investor) whose initial product retails for a breathtaking $2,300?

AT&T’s beta version of the DirecTV Now app for Magic Leap, which quietly launched in the last few weeks, lets users watch up to four live streams simultaneously. Selected from a grid-like carousel, the resizable individual “virtual TV screens” can hover in the air in front of you or be fixed on a wall (or even the ceiling). The audio automatically switches depending on which of the virtual screens the Magic Leap headset detects you’re looking at.

It’s a sort of fun, but it still feels like a solution in search of a problem. And what’s the point of creating something very few people will actually be able to use today?

A key reason for the existence of the DirecTV Now app on Magic Leap: AT&T is an investor in the company and the exclusive U.S. wireless distributor of Magic Leap’s products. Therefore, the telco is trying to help jump-start the market for the VR/AR hybrid devices with proof-of-concept applications that might — at some point? — give consumers a reason to purchase them.

Vikash Sharma, AT&T’s AVP of video products, acknowledged that the DirecTV experience on Magic Leap isn’t going  to bring thousands of new subscribers to the service. Rather, he said, the project — the first pay-TV app to come to the mixed-reality platform — is intended to understand how people want to interact with content in a new, immersive medium.

“This is the first of many experiences on Magic Leap across the AT&T portfolio,” he said. “It’s important for us to look at what the use cases for these experiences will look like and how they’ll evolve.”

But who wants to watch as many as four virtual screens at once — by themselves, with a pair of Magic Leap goggles strapped to their head?

Sports fans are a primary audience for the app, suggested Barry Smith, AT&T director of video innovation. Imagine watching four games of NCAA March Madness at once, and being able to easily toggle between them simply by moving your head — a new spin on the multiview mosaics pay TV providers have rolled out in the past (i.e., for the Olympics). “You can have a whole wall full of sports. It gives you the ability to stretch the boundaries of depth and space in your viewing experience,” Smith said.

For the record, AT&T’s Sharma said the team isn’t tinkering with the Magic Leap stuff at the expense of developing new features and device support for DirecTV Now.

Magic Leap’s current Magic Leap One system, with the hefty $2,295 price tag, is positioned as a system for developers and content partners. The company has said it intends to intro a lower-cost model for regular consumers, dubbed Magic Leap Two, but hasn’t announced details on pricing or availability.

AT&T plans to show off the DirecTV Now app for Magic Leap in select flagship retail stores, including in Boston, San Francisco, Chicago, L.A. and Dallas.

Magic Leap, founded in 2010, has raised a massive $2.6 billion in funding to date. AT&T, as part of its investment, has previously announced plans to support Magic Leap’s devices on its 5G networks.

Meanwhile, CNN (part of the AT&T family) also has created an app for the Magic Leap One that combines live feeds from CNN, CNNi and HLN, on-demand shows and digital exclusives to view on virtual screens of any size, coupled with interactive data layers. And, with the debut of HBO’s “Game of Thrones” season 8, AT&T launched an interactive experience for the show on Magic Leap, which it has been demo’ing in its retail stores (to promote both “GOT” and the mixed-reality gadget).

Other Magic Leap content partners include the NBA, Peter Jackson’s Weta Workshop, Epic Games, Lucasfilm’s ILMxLAB, Sigur Rós, The New York Times, Unity, Wayfair and studios Wingnut AR and Funomena.

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