As consumer preferences shift away from traditional pay-TV linear video offerings and toward over-the-top offerings, AT&T intends to “make sure we gain more than our fair share” of OTT video, said John Donovan, CEO of AT&T Communications, today. Donovan outlined an AT&T DIRECTV NOW roadmap, which he sees as key to achieving that goal.
DIRECTV NOW Roadmap
DIRECTV NOW (DTVN), launched just over a year ago, is an over-the-top linear video offering that includes a portion of the content included in AT&T’s traditional Directv offering delivered via satellite.
Donovan today reiterated plans to eventually shift all the company’s video offerings away from satellite to OTT delivery as a means of “taking cost out of getting to the home.” While delivering service via satellite may require a costly truck roll, AT&T’s OTT video offering typically does not.
Donovan cautioned, however, that a full transition will take time. Delivering video via OTT assumes a customer has sufficient broadband bandwidth to support streaming video and some AT&T customers currently do not have the necessary bandwidth, although the company is working to change that.
Other key elements of the AT&T DTVN roadmap will include introducing more versions of the offering and generating additional revenue through more targeted advertising, Donovan said.
“We need more flavors of DIRECTV NOW,” said Donovan, who likened such a portfolio to the strategy that AT&T uses for wireless to address the needs of different customer segments by offering AT&T Choice and AT&T Plus, as well as Cricket and a prepaid offering.
“Our TV product is not there yet,” he said.
The “upside” on DTVN, Donovan said, involves what he called “programmatic” advertising. By using the OTT platform to deliver more targeted ads, he said, “our intention is to breathe life back into linear advertising.”
Randall Stephenson, AT&T chairman, CEO and president, previously noted that AT&T can command substantially more money per ad impression than some other companies because the company has unique viewership data.
Other information about DTVN that Donovan shared today:
- More than half of DTVN subscribers had no previous linear TV
- If a customer calls to disconnect DirecTV, operators first try to review the value of that offering but fall back to offering DTVN rather than losing the customer entirely.
Donovan made his comments at the Morgan Stanley Technology, Media & Telecom Conference today which was also webcast.