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AT&T's Strategy Boss Puts Content First

Sarah Thomas
8/13/2014
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AT&T sees its continued role in life as being a connectivity provider, according to the carrier's chief strategy officer, but new content deals are clearly where he sees the biggest opportunities.

Speaking Wednesday at the Oppenheimer & Co. Inc. Technology, Internet & Communications Conference, AT&T Inc. (NYSE: T) Group President and CSO John Stankey said that the carrier's value proposition will remain in providing connectivity going forward, even as the network becomes more virtualized and software-centric. (See AT&T Spotlights Early SDN Efforts.)

That said, it's clearly not content being a dumb pipe, as Stankey spent most of his time on the Oppenheimer stage discussing the changing landscape of content. AT&T's customers want to be able to watch entertainment, the number one use for mobile phones -- largely video, but also music -- anywhere they go on their own terms, he said.

"The reality of the industry today and how content is licensed and sold is [that how mobile users consumer content] doesn't fit elegantly into that model," Stankey said, adding that customers' desire for content is so strong that they are willing to pay for multiscreen content as well.

"It's important we understand how customer buying decisions will be linked to content over time," he continued. "Just like today, the number one influencer of a customer's decision about why they buy broadband is linked to their television services in their home, I think over time in the mobile space there will be a tighter link between what kind of content people can consume and how easily they can get at what they want to watch."

He expects, and hopes for AT&T's sake, that the business model will change dramatically, as will the relationship between content providers and advertisers. It's one big reason why AT&T's acquiring DirecTV Group Inc. (NYSE: DTV) -- for the scale to meet its customers' evolving consumption patterns, and to have influence with its partners. (See AT&T to Acquire DirecTV for $48.5B.)


Read up on AT&T's acquisition of DirecTV in the news/analysis queue here on Light Reading.


Stankey believes mobile content consumption will largely mirror in-home viewing, but thinks that some content will be unique to mobile, including a rise in popularity of short-form content. AT&T plans to work with content providers to make sure this is available to customers when they want it (at a price). It's also the reason it invested in Chernin Group, the strategy man said. (See AT&T Joins OTT Video Parade and AT&T's OTT Venture Buys Creativebug, Calls Itself Otter Media.)

New content agreements and business models will also enable AT&T to begin offering multicast video, which -- like Verizon Wireless -- it expects to do throughout next year. Stankey said the carrier would start with targeted deployments in specific areas where it made the most sense. (See Verizon's Multicast LTE Video to Arrive in 2015 and AT&T Investing in LTE Video Despite Capex 'Freeze'?)

"Clearly one thought process we had as we get more scale on the content side and normalize our content agreements is, we'd like the flexibility to use that technology on a broader application," he said.

— Sarah Reedy, Senior Editor, Light Reading

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sarahthomas1011
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sarahthomas1011,
User Rank: Light Beer
8/14/2014 | 8:52:44 AM
Re: So what's new?
I think you can expect a lot more from AT&T when it comes to video, including the launch of multicast video, premium offers, subscription services, and (yay!) more ads. Stankey was really stressing the need to rethink its relationships with content providers, because right now the content guys hold all the cards and it's expensive for carriers to get access. They also have different rights whether its mobile versus TV, WiFi versus LTE, so it gets pretty messy. In order to craft a whole bunch of new offers on new platforms, that may have to change.
nasimson
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nasimson,
User Rank: Light Sabre
8/14/2014 | 1:59:36 AM
So what's new?
So what's the strategy boss telling us that we don't know already? T Mobile's patent company Dutch Telecom has a very powerful mobile video platform that they are selling even in other countries where they don't operate. It's a little odd that they have not made the best use of content so far in US.
jabailo
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jabailo,
User Rank: Light Sabre
8/13/2014 | 8:07:36 PM
Just Content?
Putting content on a network and distributing it?

Well, I guess bigger is better in that people want reliability, speed.

But I'm not really sure how much profit will be involved with all the players.

Does Ma Bell re-emerge as as Ma TV simply because it can do the job the best of all?   Perhaps.

I guess I expect more from AT&T and Bell Labs.   What bothers me about all my "content choices" is still the mapping of my need for entertainment to the content.

While I'm awash in choices, even the best "selector" software falls short. (I describe it as functioning the way your grandmother picks Christmas gifts for you.  Oh, you like "x", so I bought you 10 "x".)

What I really want is an old style TV.  Old style in terms of you pull the on/off switch and you get a choice of 3 channels and you hope something good is on.  By that, I mean you presume there are Programmers (old definition, the guys who pick what is on during that time slot).

I want a Box that entertains me and finds interesting content for me.  Half the time by the time I press all the gizmos on my tablet to find and stream a Flick to my Chromecast, I feel like going to bed.

 
sarahthomas1011
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sarahthomas1011,
User Rank: Light Beer
8/13/2014 | 4:25:06 PM
Re: What about U-verse?
I'm not sure if they want to extend the U-Verse brand to mobile, but they definitely want to make video a more tightly integrated viewing experience and plan to push multi-screen video as a way to get more revenues from ads, premium content and subscriptions.
jasonmeyers
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jasonmeyers,
User Rank: Blogger
8/13/2014 | 4:22:01 PM
What about U-verse?
Is there a tie-in between AT&T's mobile content offerings and U-verse? I would expect that the majority of its content licensing and partnerships right now exist for U-verse. Is that a brand they will extend into mobile content -- or have they already?
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