Many critics say AT&T’s move into video content ownership and subscriptions has been a big problem. Execution issues might be an issue, but there also is much evidence that revenue growth in the fixed networks business is coming almost exclusively from video subscription services.
In 2017, for example, video subscription services represented about 27 percent of total telecom service provider revenues, according to the U.S. Bureau of Labor Statistics. “Telephony has made up a decreasing share of the wired industry’s revenues in recent years,” BLS says. “In 2017, this figure was 11.8 percent of industry revenues.”
Internet access services contributed 28 percent.
Put another way, even as observers universally say internet access is the revenue driver for cable and telco fixed services, video in 2017 was producing almost as much revenue as did broadband.
Some would call video services a distraction, or perhaps only poorly executed. But for an entity with high needs for free cash flow, a revenue generator producing nearly as much revenue as does broadband is nothing to take lightly, especially when voice services are such a small part of the revenue picture.
Nobody can seemingly name a viable and sizable substitute revenue source than subscription video, at the moment. Most of the proposed new services and revenue sources are related to the mobile network: edge computing and internet of things being the salient cited examples.
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