AT&T's DirecTV Now online video service to cost $35 per month

By Malathi Nayak

NEW YORK (Reuters) - AT&T Inc's upcoming DirecTV Now online video service will cost $35 per month, including mobile streaming costs, and target viewers who shun pay-television subscriptions, Chief Executive Randall Stephenson said on Tuesday.

The wireless company's streaming video service, which launches late next month, will have more than 100 channels, Stephenson said at the WSJ.D Live conference in California.

AT&T said on Saturday that it would buy Time Warner Inc for $85.4 billion, as it looks to diversify its business into the media and entertainment market.

The Time Warner deal gives AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. Time Warner content will be incorporated into the upcoming video service, Stephenson said.

"Thirty-five dollars, you don't find that for a hundred channels in the marketplace, with wireless streaming," Stephenson said.

AT&T is betting big on mobile video to tap new revenue as the U.S. wireless market stagnates. AT&T acquired DirecTV for $48.5 billion in 2015, making it the largest U.S. pay-TV operator with 25.3 million video subscribers.

AT&T is entering a crowded market that services viewers who increasingly consume video online rather than through cable and satellite television services. Dish Network Corp's Sling TV offers about two dozen channels for $20 a month, while Sony Corp's PlayStation Vue has packages as big as 100-plus channels for $55 a month.

Online video service Hulu will roll out a new live TV bundle of broadcast and cable network channels early next year.

AT&T has said that DirecTV Now will have content from partners including Walt Disney Co, Viacom Inc and Scripps Networks Interactive.

(Reporting by Malathi Nayak; Editing by Jonathan Oatis and Meredith Mazzilli)