With its purchase of DirecTV now six months behind it, AT&T is striving to take TV Everywhere to a whole new level.
Senior AT&T Inc. (NYSE: T) officials made that point clear during their fourth-quarter earnings call with financial analysts late Tuesday. Extolling the virtues of satellite TV-mobile integration, they said AT&T will leverage its new DirecTV and wireless spectrum assets to launch a number of "mobile-centric" video offerings over the rest of the year, starting in Match.
"We expect to launch a variety of new satellite packages this year," CFO John Stephens said on the earnings call. While he and Chairman & CEO Randall Stephenson revealed few details of the new video products, they said the services will offer "new capabilities and new programming for mobile devices" that "take advantage of putting together" the company's satellite and wireless assets.
Ever since swinging the $48.5 billion deal for DirecTV in May 2014, AT&T executives have gushed about their ambitious plans to turn DirecTV into a TV Everywhere juggernaut that dominates both the satellite TV and mobile video markets. They have also talked about their plans to rule the over-the-top (OTT) video space with a prime collection of "premier content" assets gathered by DirecTV, AT&T itself and its $500 million Otter Media joint OTT venture with the Chernin Group. (See What's Next for the New AT&T? and AT&T Joins OTT Video Parade.)
Now AT&T executives are focused on putting those plans in place. For one thing, Stephens said the carrier is moving to secure unlimited content rights to as much video programming as possible. With DirecTV's TV Everywhere app already offering more than 100 channels, he expects to lock up multiscreen video rights to nearly all of the top 25 cable networks by the end of the first quarter. Stephens also noted that customer usage of the TVE app has climbed 50% since last June.
AT&T officials did not say whether they intend to launch a "skinny bundle" OTT service, as such chief rivals as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Verizon Communications Inc. (NYSE: VZ), Dish Network LLC (Nasdaq: DISH) and other major pay-TV providers have done over the past year. But it certainly wouldn't be surprising, given the company's strong new emphasis on all things video.
"We're going to invest in video," Stephenson declared. "We have a huge appetite for it."
The DirecTV push is part of AT&T's overarching strategy to use its video assets to drive interest in all of its core offerings, especially wireless and broadband. In one of the first signs of that strategy two weeks ago, AT&T began offering unlimited mobile data plans to customers who also subscribe to either its DirecTV or U-verse TV services. Since then, officials said, more than 500,000 wireless subscribers have signed up for the plans. (See Innovation Roundup: How US Pay-TV Providers Stack Up.)
"We're pleased with what we've seen so far," Stephens said, noting that AT&T has also boosted its sales of DirecTV service to its broadband subscribers by 60%. "It's still early but we see a lot more opportunities to use video to drive adds and lower churn for all of our services."
Indeed, AT&T reported a net gain of 214,000 satellite subscribers in the fourth quarter, the biggest quarterly for DirecTV in years and well up from its net gain of 149,000 subs in the year-ago period.
But, while DirecTV is growing at a healthy pace again, U-verse TV is now stumbling badly. AT&T reported that its fiber-fed TV service lost 240,000 subscribers in the fourth quarter, more than offsetting the gain in DirecTV customers. The big U-verse TV sub loss -- which came even as its companion broadband service gained 192,000 subscribers in the fall quarter – knocked U-verse back behind Verizon's similar FiOS TV service in total customer count.
Acknowledging that blot on their Q4 earnings report, AT&T officials said they are taking steps to restore U-verse TV's growth by integrating both the sales and home installation efforts for U-verse and DirecTV. "We'll see that relationship between satellite and U-verse get better," Stephenson said. "We're doing some things to shore that up."
— Alan Breznick, Cable/Video Practice Leader, Light Reading