IP Democracy: AT&T Exec: Content Buys Should Reflect All Platforms

AT&T now offers multichannel video service via its U-verse platform, but video content suppliers should take into account that the telco also offers other ways of watching video, Group President-Regional Telecommunications & Entertainment Ralph de la Vega said today at a Goldman Sachs investor conference. Referring to his talks with leading cable network content suppliers, such as Hollywood powerhouses Viacom, NBC-U, Fox and others, de la Vega said "I want that content provider to really have the vision and scope that I have. I am looking at our entertainment business across twelve million broadband customers, sixty-three million wireless customers and significant growth in the U-verse segment."

The goal is to get the scale discounts that cable networks and other entertainment companies routinely offer to cable operators. AT&T and Verizon and other competitive multichannel video providers don't get the same bulk rate discounts on programming fees that Comcast, Time Warner and other cable operators receive, although de la Vega said that AT&T pays a premium that doesn't exceed 30% more than what these top cable companies pay.

Still, if Hollywood won't negotiate bulk rates that take into account AT&T's wireless and broadband outlets, the telco can start investing in its own video content creation, which, according to de la Vega, it already has. "We're working with various innovative small companies that create content," he said. The kind of companies AT&T is working with are those "whose show didn't make it to prime time."

U-verse, meanwhile, is adding about 7,000 to 8,000 new customers per week. At that rate, U-verse should add, gross, 97,500 customers for Q3 07, almost double the 57,000 U-verse video customers the company served at the end of Q2 07.

One big hang-up in gaining new video customers is the amount of time it takes to install the fiber-to-the-node service. de la Vega said that AT&T is making great strides in that regard, with the average install time now taking 7.5 hours, down by an hour. In AT&T's best markets, the average install is running 6.5 hours and the best technician can get a customer up and running in four hours, he claimed.

Given these trends, "a weekly install rate of 10,000 is do-able," de la Vega said. The cost of deploying U-verse's infrastructure is dropping too, which should help more rapidly expand the U-verse footprint. "The Moore's law of faster, better and cheaper is going to play in this space just as it has in" the broadband and wireless spaces.

Posted by Cynthia Brumfield on September 19, 2007 10:35 AM to IP Democracy