Video

AT&T CEO:  ‘We’re Very Bullish on Video’

Will launch next-gen DirecTV Now platform this spring, new thin-client streaming device by end of year 1/31/2018 9:13 PM Eastern
Randall Stephenson

AT&T remains “very bullish on video” as it looks to launch a next-gen version of DirecTV Now this spring, and introduce a new “home-centric” thin-client streaming device by the end of the year, Randall Stephenson, AT&T’s chairman, president and CEO, said Wednesday on the company’s Q4 earnings call.

He’s also bullish about video in part because AT&T managed to add to its pay TV base as DirecTV Now, its OTT TV service, added enough subs in Q4 to offset subscriber losses for U-verse TV and DirecTV’s satellite TV offering.

RELATED: AT&T Adds 368,000 DirecTV Now Subs in Q4

The coming DirecTV Now upgrade will add in cloud DVR services, enable subs to get a third stream (the current DirecTV Now product supports two concurrent streams per account), and enhancements to the service’s user interface.

AT&T noted in December that enhancements coming to DirecTV Now will also include support for 4K video, individual profiles, and a VOD library with more than 35,000 titles (up from about 25,000). 

John Stephens, EVP and CTO at AT&T, said DirecTV Now subscribers continue to be an equal mix of cord-cutters and cord-shavers/cord-nevers. A “disproportionate” number of those DirecTV now customers are also millennials and those who live in multiple dwelling units.

“We still haven’t seen a dramatic uptick in customers that are shifting from our full value product to [DirecTV Now], but we continue to watch that carefully," Stephens said. 

Stephenson, meanwhile, is hopeful that the addition of a cloud DVR and the third stream will drive more revenues as well as higher penetrations for the DirecTV Now service.

Stephenson also offered some details about AT&T’s plans to introduce a new “home-centric” streaming device that will “repurpose” the company’s traditional linear TV platform.

He said the new in-home offering will take the form of an inexpensive, “very thin client” that can be connected to any broadband service and include a voice-controlled interface. In addition to supporting DirecTV Now, it will also integrate access and search to other OTT services, including Netflix, Amazon, Hulu and YouTube, among others.

"It also gives you a premium live video experience in your home with the flexibility and ease of use [that] you would expect out of an OTT service,” Stephenson said.

“That [device] will actually drive cost structure of the traditional video product down, so that you can preserve margins in the traditional video as you grow in the over-the-top applications and video services,” he added.

Stephenson didn’t elaborate on that product further, but FCC documents that surfaced last fall showed that DirecTV is developing a 4K-ready, Android TV-powered streaming device with voice search and access to apps from the Google Play store.

And while AT&T expects pressure on its pay TV business to continue throughout 2018, “we’re very bullish on video,” Stephenson said. “We are standing up a video product that we are convinced will give us growth on the video platform for the next few years...and that's our DirecTV Now [product]…As traditional linear declines, DirecTV Now, we think, can offset that.”

Earlier in the call, Stephenson said closing AT&T’s pending deal for Time Warner is a top priority for the company, despite a government attempt to block it.

RELATED: DOJ Suing to Block AT&T-Time Warner Deal

“While we remain open to finding some reasonable solutions to address the government’s concern, we do expect this case will ultimately get litigated in court." 

He said the trial date in that case is set to begin March 19. “We remain very confident that we'll complete this merger." 

Want to read more stories like this?
Get our Free Newsletter Here!