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AT&T Looking at Content Bundles to replace Set Top Boxes

December 8, 2015 - Written By Alexander Maxham

AT&T’s CEO, Randall Stephenson was speaking at an investor conference this week, and mentioned that AT&T would like to find a way to offer content bundles that can be used on small screens, i.e. our tablets, and smartphones, or even one that can be used on a single screen that is not driven by a set-top box. Basically he hinted at the company doing their own mobile video service. Something that Verizon had been rumored of doing for quite some time, and launched earlier this year. This would be good for AT&T in a few ways. It would give their customers more content that isn’t tied to their set-top box. Additionally, it would likely mean more cash coming in for data. Whether that’s mobile data or from their ISP services.

Stephenson stated, “it is something we are pursuing very, very aggressively and you should assume that we will be doing something in the market with that,” in regards to offering content bundles. Stephenson also added that there are currently 30 million homes that do not have pay-TV subscriptions right now. Which makes this a big market for AT&T to cash in one.

The wireless market is starting to plateau. While AT&T has struggled to add new customers, they have found ways to keep raking in the money, by partnering with GM for their OnStar infotainment system as a big part of that. Because of this, AT&T is looking for other sources of revenue, and the online video market is already a pretty competitive space, with Netflix, Dish and YouTube already doing well there. And having Verizon just bought AOL earlier this year for their over-the-top video streaming service, AT&T is going to need to play their cards properly if this is going to work well for them.

With AT&T buying DirecTV, it gave AT&T the ability to work with content providers on contracts and such, and build a mobile video service. So while they are the number one pay-TV service in the US with about 26 million customers, the DirecTV acquisition can be so much more for the company, and that was likely what they had in mind when purchasing DirecTV.