Wednesday, November 14, 2018

AT&T Plans to Decommission DirecTV and got Direct to Home OTT

Most connectivity providers selling retail services to consumers have struggled--often unsuccessfully--to create over-the-top services that compete well with other third party apps. But AT&T might be among the first to do so at scale, essentially ending delivery of video by satellite and switching instead to OTT streaming delivery.

Among other implications, that will drastically cut operating costs, as customers will be able to self-install the new set-top that supplies the service, using any broadband connection. That also means AT&T will retain--as it does with DirecTV--the ability to sell service to virtually any U.S. household, where it has local access networks and where it does not.

“It’s a device that allows us to, instead of rolling a truck to the home, we roll a UPS or FedEx truck to the home and deliver a self install box,” said AT&T CFO John Stephens. That streaming product also would replace U-verse television services. AT&T expects to begin offering the streaming service in 2019.

Among the other advantages is lower customer acquisition cost, which in the case of DirecTV includes the truck roll, cost of the satellite receiver and dish, more-costly set-tops and labor to install the dish and perhaps install inside wiring.

It is a high-reward move from the largest provider of linear video services in the United States.

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