Another day, another new video service. Or to be specific, another 3 new video services, all coming later this year from AT&T, which announced DIRECTV Now, DIRECTV Mobile and DIRECTV Preview yesterday. The most intriguing of the group is DIRECTV Now. Though few details were released, it feels like it will be more along the lines of skinny bundle Sling TV than full line-up PlayStation Vue. It will likely feature a low entry price with add-on packages of certain networks.

While analysts and press recently reported that Sling TV ended 2015 with 500K-600K subscribers, I remain skeptical about how broadly attractive the service ultimately will be and more generally, how appealing the “virtual pay-TV operator” model is. Barring anything surprising from AT&T, it’s likely that many of my same challenges Sling TV faces will apply to DIRECTV Now as well.

I’ve written about these at length in the past (here, here, here), but to quickly recap:

“Swiss-cheese” channel lineup and missing broadcast TV - The low base rate offer sounds interesting, but as soon as prospects dig into which networks are included and which ones are missing they’ll realize add-on packages are required to plug the holes. That diminishes the cost savings. And the most glaring networks missing are the broadcasters, which still account for a lot of linear viewing. Further, sports fans will quickly find that most regional sports networks won’t be available at all.

Minimal actual cost savings - By the time the add-on packages are includes and the increased cost for unbundled broadband is accounted for, the actual monthly cost savings is relatively low.

Lack of flexible viewing options - Sling TV’s emphasis is on linear viewing, which is out of step with millennials who rampantly time-shift and binge-view. Though VOD content has increased since Sling TV’s launch, DIRECTV Now will face the same hurdles in gaining access to VOD content from TV programmers wary of cannibalizing one of pay-TV’s primary benefits.

Technical issues - Delivering a linear OTT service is technically challenging, as Sling TV has found with its multiple outages. Even delivering discreet live-streaming events online is no picnic, as ABC recently found wit the Oscars and CBS found with the Grammys. With frictionless online unsubscribing, high churn will be a pressing issue.

Competitive SVOD services - As viewership shifts to SVOD services like Netflix, Amazon and Hulu, time spent with traditional TV is declining. As SVOD offers more great programming, “entertainment-only” viewers will be ever more skeptical of pay-TV type services.

Relatively small market size - For all the hype around cord-cutting, today’s reality is that there are really only around 20 million or so U.S. homes without pay-TV. The competition to appeal to them is intensifying all of the time. Can a service like Sling TV or DIRECTV Now realistically aim to get more than say 10-15% each? If not, then we’re talking about services with just 2-3 million subscribers eventually, tiny compared to the big SVOD providers.

Add it all up, and I’m still challenged to see the big payoff of these skinny bundle services like Sling TV and DIRECTV Now. Maybe cord-cutting will dramatically accelerate and the market opportunity will be much bigger. Maybe the TV networks will collectively embrace skinny bundles and undermine the traditional pay-TV model. Maybe broadcasters will cede ground on retransmission consent expectations so the big networks can be economically included in skinny bundles. Maybe, maybe, maybe. For now I don’t see any of this happening, which is why OTT pay-TV still seems like a small’ish opportunity, at least for now.