DirecTV owner AT&T says it’s done buying satellites

WASHINGTON — AT&T, proprietor of U.S. satellite tv for pc tv big DirecTV, is completed shopping for satellites, executives mentioned Nov. 29.

“We’ve launched our final satellite tv for pc,” John Donovan, CEO of AT&T Communications, mentioned throughout a presentation to analysts.

AT&T Communications is a enterprise unit of AT&T that covers the corporate’s Mobility & Leisure, Enterprise, and Expertise & Operations divisions.

Donovan oversees nearly all of AT&T’s U.S. video providers enterprise inside the firm. He and different AT&T executives mentioned the rampant progress of internet-delivered video providers that bypass satellite tv for pc and cable networks is so vital that it’s now the corporate’s future.

“We’re seeing shifts in viewing from conventional TV viewing — cable, satellite tv for pc — to on-demand viewing, and streaming on-demand viewing,” mentioned Randall Stephenson chairman and CEO of AT&T Inc.

These shifts, he mentioned, have accelerated an overhaul of enterprise fashions amongst media corporations which are “recognizing that they now not have the posh to rely completely on wholesale distribution of their content material to prospects going by way of satellite tv for pc and cable corporations.”

“They’re scrambling and they’re working laborious, everyone [is], to determine find out how to go on to shopper, find out how to ship their content material on to their viewers and find out how to have a relationship with their audiences,” Randall mentioned.

AT&T’s pivot away from satellites — simply three years after shopping for DirecTV — is definite to rekindle debate inside the satellite tv for pc trade about the way forward for satellite tv for pc tv, which is usually half or extra of a set satellite tv for pc providers operator’s revenues. AT&T’s revelation can even do nothing to assuage satellite tv for pc producer issues about demand for brand new satellites as business orders drag on by way of the fourth 12 months of under common demand. Solely 5 giant, business geostationary satellites have been ordered globally in 2018 by way of open, aggressive bidding, down from the historic annual common of 20 or extra.

DirecTV on the time of acquisition mentioned its in-orbit satellite tv for pc fleet was price roughly $2 billion. AT&T had different causes to purchase DirecTV, although, in keeping with Chris Wagner, managing associate on the consulting agency OTT Advisors.

“I might say that AT&T’s purchase of DirecTV had much less to do with video distribution and extra to do with proudly owning content material that they’ll leverage to drive their direct-to-consumer enterprise,” Wagner mentioned in an interview. “That large piece of content material that DirecTV has is NFL Sunday Ticket. So AT&T’s technique, together with their latest purchase of Time Warner, is absolutely to finish the vertical connection between content material and the patron.”

Randall mentioned AT&T has been “investing very aggressively” in OTT, or over-the-top, video distribution in addition to a construct out of fiber that he described as “in all probability one of the aggressive in america.” Satellite tv for pc, nonetheless, is one thing AT&T is actually “accomplished” with, he mentioned.

Donovan mentioned AT&T is studying find out how to appropriately value OTT set-top bins that prospects can self set up relatively than depend on a technician.

“It’s transformational structure, and we all know on the finish of the day that we’ve launched our final satellite tv for pc as a result of Randall simply mentioned so,” Donovan mentioned.

Satellite tv for pc’s energy has been in its potential to distribute content material linearly from one place to thousands and thousands concurrently. OTT providers like Netflix are unicast, which means they ship content material to viewers one by one. Unicast has historically been dearer than broadcast, giving satellites and benefit, however that’s altering.

“These prices are undoubtedly coming down,” Wagner mentioned, citing cloud providers for content material suppliers and web service suppliers providing better quantities of throughput.

“As [terrestrial] broadband will get extra subtle and quicker, scales to larger numbers, and as 5G turns into extra out there, we’re undoubtedly going to see over-the-top as a video distribution platform that’s going to satisfy the identical scale as satellite tv for pc,” Wagner mentioned.

Personalised viewing providers are one of many key drivers of OTT, he mentioned. Viewers need to watch exhibits when they need, relatively than when a programmer has scheduled them to air.

“When you return in time and you concentrate on the place issues had been in 2008, about 95 p.c of whole leisure consumption was coming by way of linear broadcast constructs,” mentioned John Stankey, CEO of AT&T’s Time Warner Media division. “You concentrate on the place we’re in the present day, it’s about 55 p.c. There’s been a fairly dramatic shift …  and it’s actually vital that we place ourselves from a technical perspective to accommodate that.”

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