AT&T’s new internet-TV service promises to be disruptive. The problem is that the telecom giant will be disrupting itself.

AT&T plans to launch DirecTV Now later this month. The video streaming service will feature more than 100 channels for $35 a month, making it cheaper than comparable packages from Sony’s PlayStation Vue and Dish Network’s Sling TV. It will also undercut cable companies, whose average revenue per video subscriber is about $80 a month. Most notably, the service will be far cheaper that DirecTV’s own satellite...