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Windstream Taps TiVo

Raymond McConville
News Analysis
Raymond McConville
11/1/2007

Windstream Communications Inc. (Nasdaq: WIN) may not be able to keep everyone in its territory from switching to cable, but a new partnership with TiVo Inc. (Nasdaq: TIVO) should help. (See TiVo Partners With Windstream.)

The carrier already resells satellite TV service, but that doesn't always win against cable companies, which can bundle all services on one bill.

"What we've discovered is that whether we like it or not, there are going to be households reluctant to move to a satellite solution," said Roger Woziwodzki, vice president of strategic business development for Windstream. By reselling TiVo, Windstream hopes to further enhance its customers' video experience even if customers don't make the complete switch from cable.

But aside from the conveniences of having TiVo on a Windstream bill, the partnership will also enhance the broadband services offered by the company. The TiVo boxes will come with a broadband connection in the back from which Windstream customers will be able to enjoy TiVo's own downloadable content services. "Our broadband service coupled with a set top box will be a new experience for our customers, who will now have two screens to utilize their broadband connection with," said Woziwodzki.

The partnership of a carrier with TiVo is somewhat of a new experiment. Most cable MSOs offer their own DVR services as do AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). But for a smaller carrier like Windstream, it's a new way to retain customers and bring in new revenues.

Windstream is exploring the economics of deploying its own terrestrial video service. But the company is in a tougher position than most carriers. It doesn't have the deep pockets of an RBOC like Verizon, but it's too big to qualify for RUS welfare, er, funding from the government. That's a big reason why, for now, it is satisfied with its partnership with EchoStar Satellite LLC .

"Certainly we've considered our own video service for years and continue to do so," said Woziwodzki. "It's a challenging business model for us on an incremental basis. In our rural footprint, it'd be expensive to reduce our loop lengths. But I do hope that scale eventually comes to it."

In the meantime, Windstream is deploying fiber to customers' homes in greenfields, but its traditional footprint remains mostly copper. While it still is monitoring the economics of telco TV, it will continue to bolster its video offerings through add-on services via partnerships. For example, Woziwodzki says he would like to bring a service like AT&T's Homezone to his satellite TV customers.

Windstream will also be closely considering EchoStar's recently announced ViP-TV service as a way of more cost-effectively delivering video in the future. (See EchoStar's IPTV Play.)

— Raymond McConville, Reporter, Light Reading

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PrimeFiber
PrimeFiber
12/5/2012 | 2:59:45 PM
re: Windstream Taps TiVo
I don't understand why there's this rush to praise echostar's vip tv. There is no solution at least until the third quarter of 2008. Your company still will have to gain all the affiliate rights. When you break down what their providing, you're actually only getting about 40 regularly viewed channels. The other 260 compile the rest... international, etc. Also, they're still just providing transport rights. If your company has never dealt with affiliate rights, good luck. It's one of the most painful things to have to go through. And if you're using LLC's for every project, you'll have to start all over again with all new fees and forced programming that comes along with it.

I'm not saying that this can't be a good solution for small companies with no experience providing their first IPTV solution, but this solution isn't going to run past companies like Avail at this time.

I'm very interested in seeing where echostar is heading with this IPTV solution, but I'm not going to bounce off the walls until we get some answers.
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