Monday, November 16, 2015

AT&T Finds Scale Does Matter

In the linear video business, scale really does matter, in part because it is easier to amortize marketing expenses and operations, but also because programming contracts have a volume element to them. That is one reason why small providers of linear video have had a tough time making a business case.

Consider the difference between what AT&T had been paying to support its U-verse video business, representing about 5.9 million customers, and its DirecTV asset, with 19.6 million customers.  According to AT&T CEO John Stephens, U-verse video customers pay $17 more each month in programming costs than those on the company's newly acquired DirecTV platform.

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