AT&T to Buy Streaming Expert QuickPlay

In a further effort to bolster its video services capabilities, AT&T has agreed to terms to acquire QuickPlay, a company with a cloud-based streaming video system, for an undisclosed sum.

AT&T Inc. (NYSE: T), which has been relying on QuickPlay Media Inc. to deliver video for its U-verse service, will now be using the QuickPlay platform to deliver content for the three new DirecTV streaming video tiers it plans to debut in the fourth quarter.

AT&T is quickly exploiting the potential of its DirecTV acquisition by expanding streaming options and adding new ones. The company recently beefed up DirecTV's popular NFL Sunday Ticket package by adding streaming of out-of-market games. (See AT&T Delivers Streaming Access for DirectTV NFL Sunday Ticket.)

In March, AT&T announced three streaming services for DirecTV: DirecTV Now, DirecTV Mobile and DirecTV Preview. The Now package will include most of the content that DirecTV currently provides. The Mobile package will deliver content to mobile devices.

Preview will be a free, ad-supported service, providing access to a limited selection of DirecTV content, available to anyone with a wired or wireless Internet connection. It will "showcase content from AT&T's Audience Network, many networks and other content sources, and millennial-focused video from Otter Media, a joint venture of AT&T and The Chernin Group," AT&T explained.

Want to know more about the latest developments in the video services business? Check out our dedicated video channel here on Light Reading.

QuickPlay, based in Toronto, is controlled by Madison Dearborn Partners , which bought nearly a full interest in the company from other investment firms in 2012 for $100 million. Earlier this year, Quickplay raised another $57 million from Madison Dearborn, Orix Ventures and Difference Capital Financial.

None of the companies involved in the sale said how much AT&T is paying for the company.

Quickplay was the company that bought the FLO TV operations from Qualcomm Inc. (Nasdaq: QCOM) in 2012. While the FLO TV endeavor failed, QuickPlay picked up state-of-the-art operations centers and some expertise.

Earlier this year, QuickPlay bought Roundbox Inc. , a company with expertise in optimizing delivery of video over mobile networks, "using multicast (one-to-many), and unicast (one-to-one) technologies that leverage 4G LTE Broadcast -- eMBMS, WiFi, 3G, and 4G to launch new services -- or enhance existing services -- with dramatically improved economics and scale," as the company announced at the time.

That purchase seems to have been done in support of services precisely like DirecTV Mobile and DirecTV Preview.

QuickPlay's client roster has included AT&T U-verse; Verizon Communications Inc. (NYSE: VZ); Bell; Rogers Communications Inc. (Toronto: RCI); Samsung; and recently HOOQ, a joint venture between SingTel, Sony Pictures Television and Warner Bros. Entertainment operating an over-the-top service in Asia.

— Brian Santo, Senior Editor, Components, T&M, Light Reading

KBode 5/17/2016 | 12:32:29 PM
Re: Interesting play... Yeah I'm just not sure.

Historically fear of cannibalization ultimately leads executives cutting streaming service features or price promos they feel will be TOO compelling, which shoots these projects in the foot. 

AT&T wants to be adaptable to market evolution, and wants wireless users eating through video allotments, but they also don't want millions of U-Verse TV and DirecTV customers (paying $120+ per month) suddenly shelling out less cash for a $30 to $40 skinny bundle. That would terrify increasingly skittish investors.

What kind of actions they'll take to reflect this concern isn't clear, but knowing AT&T there will be some kind of caveats that prevent the effort from being as successful as it could be if they jumped into the pool with both feet. 

Usually the play is the TV Everywhere type approach, where streaming is sold as a complement to traditional cable, but doesn't disrupt traditional cable. But to truly succeed I feel like some level of major self-disruption has to exist. 
inkstainedwretch 5/17/2016 | 12:27:12 PM
Re: Interesting play... I wonder if AT&T (along with Verizon and other companies that also have wireless) are less concerned about cannibalization, given their expectation of using 5G to deliver video services. In other words, they may have put themselves in a mindset that cannibalization is inevitable.

Furthermore, it might end up not being cannibalization, once you accustom yourself to the realization that consumers are absolutely, utterly uninterested in the delivery mechanism. Companies like AT&T are beginning to demonstrate that you can prosper by getting services to your customers by whatever technological means are available, and if you have several means available, all the better. (Another example is Cable getting serious about Wi-Fi.)

The "my network is technologically superior" attitude is only justifiable if competing networks suck so bad the experience of using them is unbearable, and what qualifies as "unbearable" involves not just quality, but other factors too, notably cost.

-- Brian Santo
KBode 5/17/2016 | 11:55:53 AM
Interesting play... In an age where so many cable operators deny that things are evolving toward over the top, kind of interesting that AT&T is the one taking the aggressive move toward selling a nationwide standalone streaming option. Could prove interesting provided AT&T doesn't shoot itself on pricing or some other idea driven by fear of cannibalizing existing U-Verse subscribers. 
Sign In