Eventually they all will go to a Streaming only service so a setup boxs DVR's so forth will be obsolete so all a customer will need to have is just a Smart TV. But Yes AT&T was not smart buying Direct they should sell it to Dish or Dish and Direct should merge together to try to put one good streaming service together to compete with all of the other providers. Only offer Sat Tv to those who live outside areas that do not have high speed connections but everything else they should concentrate on Streaming.. Overall providers will not need to have warehouse full of hardware anymore which will save them a lot of money and installers will be just doing network drops is all for net connections to tv's is all.
AT&T Should sell DIRECTV to DISH
- Thread starter Scott Greczkowski
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Yeah, that statistic drastically overstates broadband availability (at least if you're defining broadband per the FCC's specs of at least 25/3 and you're excluding crappy satellite internet, which wouldn't be a feasible pipe for streaming cable TV). I used to make the same argument that you're making but, in the course of back-and-forths on forums like this and my own follow-up research, I found that there's still a significant slice of Americans (again, my estimate is around 15%) without home broadband access.
As far as an agreement by "DishDirect" not to engage in location-based pricing (i.e. charging a lower competitive price in areas with cable operators but then a higher price out in the boonies where there's no competition), I'm not sure how well that would work because, even if it's not the case yet, trends in video consumption patterns and technology will pretty soon make it so that the great majority of satellite TV customers are rural dwellers with no other option. I kinda think that DISH and DTV are resigned to the fact that they're going to keep losing customers in cities and suburbs who have other options. If you listen to recent remarks on AT&T earnings calls, it seems that DTV is no longer interested in trying to compete aggressively on price to lure and retain those customers who would otherwise go to cable or streaming or FiOS.
In fact, AT&T actually WANTS to shift the bulk of their video subscribers away from satellite and over to streaming. That's why the CEO recently called the soon-to-be-unveiled AT&T TV product their "satellite replacement" service. And he's indicated that it will be priced significantly cheaper than DTV satellite too. Starting in a couple of months, AT&T will consciously begin trying to cannibalize their own satellite TV service. I think their long-term plan was always to suck as much juice out of the satellite orange as necessary before casting it off. But I always figured that wouldn't be until at least a couple years after the launch of the satellite-replacement streaming platform. But things may be developing faster than I had anticipated...
Don't ignore the ongoing expansion of broadband access. Since we have no time frame for any merger, or even know if there will be a merger of course, the number of residences with Internet access of some sort will keep growing. And yes, I know how the FCC defines broadband speeds, but I also know from experience that I can stream TV programming at speeds as low as 2-3 Mbps. The resolution suffers of course, but it does work. I also know several fulltime RV'ers that routinely stream with Hughes Gen5 Internet service. Are those situations ideal? Of course not. But they do work. LEO Internet will definitely be a game changeer, especially if the pricing is as competitive as Elon Musk says it will be. It will be ideal for both rural folks and RV'ers...
All good points. Yes, broadband access will continue to expand but it's still going to be a some years before quality high-speed internet with high (or no) data caps reaches everyone. Lots of questions still around what the pricing/metering/capping might look like on LEO satellite broadband service. Might work well for those who stream two hours a day of video but not those who stream six hours a day (i.e. all their household TV consumption). Time will tell...
Note that I'm not arguing against a DTV+DISH merger of some sort -- in fact, I've long said that I think it will be inevitable in the 2020s that only one major DBS provider survives. I think a deal could probably pass muster with the government if both sides offer some concessions to allay fears. A JP Morgan analyst suggested yesterday that AT&T and DISH could offer price guarantees (as I've been saying) plus a commitment to building out broadband in underserved areas as a way to head off objections. Seems reasonable.
It's increasingly looking like the BIG deal that the DOJ is considering, T-Mobile+Sprint, is not going to go through, at least without some major structural concessions, such as somehow ensuring the creation of a viable new fourth competitor. I think if the government is seen as being tough and scoring a major win for consumers on that more high-profile deal, there will be less political pressure on it to stop a DTV+DISH merger (which, let's be honest, not nearly as many people would care about). Of course, we all know that Trump hates AT&T and if was behind in the polls come next spring/summer, he might come down hard against the deal, positioning himself as looking out for his base, which skews older and more rural (and therefore more likely to use satellite TV). Who knows. Lots of political uncertainty...
Cannibalizing their own market makes absolutely no sense. Once a customer is installed it doesn't cost any less to deliver to streaming customers than it does to satellite customers - it may actually cost slightly more since every streaming customer adds an incremental cost for CDNs etc. and cloud DVR capacity.
The only time they save money with streaming is at install time, and that's easily addressed by the contracts that bind satellite customers for two years. They have less reason for such contracts (or at least can make them a lot shorter) for the upcoming 'IP version' of Directv. The only ongoing price difference that makes sense is dropping the 'advanced receiver fee' for IP since there's no Genie. But that $15/month way more than pays for the Genie so that's a profit center as well.
Having another alternative that they steer new customers to because it costs less for them and for the customer is one thing, actively trying to convert satellite customers costing them money is another thing altogether. I don't buy for a moment they will do that.
If AT&T plans to dumping satellite in a few years like you seem to want to believe, why are they launching a new satellite NEXT WEEK? They could have easily sold that satellite rather than launching it - where it would become far less valuable since its configuration can't be changed. They could get by for at least five years on their current satellites, probably longer (if they found a good solution for Puerto Rico) so the only reason to do that is if they plan to keep satellite well beyond 2025.
It makes sense if either of the following statements are true:
1. The new product will yield a higher return for AT&T over the coming years than the old product will during that same time period.
2. AT&T plans to sell off (either fully or partially) the old product.
I'm not sure if #1 is true (time will tell), although I do recall Stephenson saying that he believes the new streaming service will produce higher profit margins. I do believe #2 is true. I think it's been a serious down-the-road option contemplated by AT&T execs probably since they first acquired DTV.
Look, I don't really fault your logic there. You've stated it many times. And yet I don't think the competing pricing of the AT&T TV streaming service vs. DTV satellite is going to play out the way you think. We'll see what happens later this year. You know what I think because I've spelled out very detailed predictions, both on this site and elsewhere. I predicted that the same packages will cost $30 more on satellite than streaming, although satellite will continue to include a capacious DVR while that will cost extra on streaming. (And I may have overstated the price difference too. Maybe it will only be $20 rather than $30?)
I know you won't find this answer satisfying but I just think it's true that AT&T has a vision for what the future of video entertainment looks like -- the consumption of it, the distribution of it, and the economics of it. And that vision is different from yours. AT&T is placing their bets on that vision in a big way over the next 9 months or so. We'll see if it works out for them as the 2020s unfold.
Again, see statement #2 above.
Well, maybe your belief that they could have easily sold that satellite isn't true. Or maybe it is. I don't know.
Perhaps when the original order for the satellite was put in, AT&T was more ambivalent about keeping DTV well into the 2020s and they figured that it was a better to invest in the service's long-term viability; even if they chose to sell it off in, say, 2022, launching a satellite in 2019 would extend the life of DTV and thereby increase the price they could get out of it if they did choose to sell it. Essentially, deciding in late 2016 to launch the DTV-16 sat in a few years was a way to buy long-term optionality.
I'm curious what your opinion is of a merged DISH+DTV. Do you think it would be good or bad for satellite TV customers such as yourself? Do you personally *want* to see AT&T remain the owner and operator of DTV for another decade or are you simply arguing that that's what you think will actually happen?
I don't think it would make much difference for commercial customers like me - Directv is already the only game in town for restaurants/sports bars so it doesn't change anything or give the combined entity extra pricing power. For residential customers who live where there isn't cable TV or decent uncapped/high-capped broadband to allow streaming they would basically have a monopoly supplier. Right now Directv and Dish have to compete somewhat for those customers, but if it was one company they'd have no reason to offer any discounts on the satellite product. That problem will slowly solve itself as they get decent broadband options, but for the ones who are further down the list it wouldn't be pleasant. I think the FTC would be a lot more skeptical about this than some think - probably the analysts who think it would be a breeze believe those Bullsh!t FCC broadband numbers and think it is only 1-2% of the country who would be affected.
I don't really care whether AT&T is the owner or someone else - it didn't change anything for me when AT&T bought them and it wouldn't change anything if it was spun off or purchased or whatever. I don't think it makes any sort of business sense for AT&T to sell off Directv when 1) they would be lucky to get half of the $50 billion they paid for it which would make their management look REALLY dumb and probably lead to their ouster 2) they need the volume satellite provides for years to come to keep their content costs for streaming lower (remember that thing about Directv paying $14 per month per customer less than Uverse TV did for equivalent content? Scale matters...) 3) I don't think it makes sense for the buyer either because the lifetime of satellite is too short to combine technologies 4) Dish would probably have a 'NIH' attitude and force future customers to use their inferior overcompressed and overly expensive satellite setup 5) While there are some synergies with combining billing/CSRs and other back office stuff, AT&T is STILL working on getting that done. If Dish bought them and it closed 18 months from now (which is optimistic) they'd have that combination done by what, 2025? How many years of savings after 2025 will it take to pay the cost incurred during the several years it takes to integrate the billing etc. Will it ever be paid back with a shrinking satellite customer base?
They are not cannibalizing anything..they are migrating from an expensive to maintain business that includes significant future investments to a delivery platform much cheaper to maintain
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What future investments? Once T16 is launched next week they'll be set for satellites into the 2030s. By that time they can slowly phase it out. There's zero reason to convert current satellite customers to streaming. If they charge less for streaming they'll make less money and pay MORE to deliver it (satellite costs zero in incremental cost per customer, streaming has a small but non-zero incremental cost per customer)
We don't sugarcoat things, we tell it like it is, and best of all we are not politically correct. Don't like it? There's a Blake Shelton song that expresses my feelings perfectly
Att specializes in cost cutting...its much cheaper to have one platform rather than several...satellite is more limited in distribution than high speed internet...simple things like line of sight..also you need a professional install for satellite..internet you can mail the customer a box for a self install...att didn't want to run 2 separate businesses..so they chose the easier one that needed fewer employees...is it a better service?.. depends on your internet speed...is it a mistake? Only time will tell
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Ya know, for all the debate going on here ...
Theres Nothing saying Stephenson can't say he's going to do this or that and then later change his mind ...
I don't believe everything he says ...
Yes, they will have a On line version of D* ... to go WITH the Sat version ...
Like you said, theres no reason to push subs from D* to D* streaming once the Sat is up and working.
I said before they bought D*, that they would also sell it at a later date ... (hopefully it will still be a working platform when that happens)
Thats one opinion.
Is Sat really more limited ?
Sat you need LOS, sure ...
With the streaming, you need the INTERNET ... there is a HUGE amount of people that don't have the Internet and then there is the Speed issue ... is the Speed fast enough to run what your trying to do ....
As for needing less employees, that is correct ... however that will Not stop the truck rolls ... the self install box they will send will have PLENTY of subs asking questions ....
I go out to help people that can't set up thier own Self Install internet ... now were gonna expect them to add a streaming box to it as well ?
you need to install it..iptv..nope..only 1/3 of Americans have LOS to get satellite
Since most streaming devices only need to be plugged into an HDMI port on the TV plus a power source, I wouldn't expect many truck rolls would be needed. If the customer can't install it, odds are the 12-year old kid next door can...
THIS. This is, IMO, the main impediment to such a deal happening. Stephenson doesn't want to admit he was wrong in buying DTV and he wants to keep his job. If a deal were to happen, it would have to be structured in some way that it could be spun to AT&T stockholders as the most forward-looking way of handling those assets. My guess is that it would involve a partial sale now, with DTV retaining the same newly negotiated, restructured and priced channel packages (Plus, Max, etc.) that will also be offered on the AT&T TV streaming service.
What if, as I mentioned above, the deal could be structured so that even though DISH becomes the majority owner and functional operator of DTV, they must honor the recently negotiated network carriage contracts that AT&T has put in place for it? DTV would have to keep the new packages, with AT&T's new pricing (set to be announced later this summer) for the next few years. Those same packages sold on AT&T TV would continue to benefit from the large combined subscriber base economies of scale for those few years, until, say, 2024. And during that time, AT&T would go full-court press to convert as many as possible of their 15 million (and growing) home broadband customers from Uverse TV or DirecTV (or neither, in the case of cord-cutters) over to AT&T TV, which would be delivered over those connections. Keep in mind that DTV satellite was down to about 18.7 million subs at the end of 1Q 19. I'll bet it loses another 0.5 million or more in 2Q.
Beyond that, AT&T TV will be offered OTT ("bring your own broadband"), so it should pick up some subscribers that way too. And I suspect AT&T will aim to get CenturyLink to bundle AT&T TV in with their broadband service rather than DTV satellite, which is what they're doing now. (CenturyLink has deprecated their U-verse TV-based Prism TV product and they don't actively sell it anymore. Just like AT&T is about to do with U-verse TV itself.) I could see them trying to do the same sort of bundling partnership deal with Frontier too, plus maybe some of those smaller cable companies (e.g. Mediacom, CableOne, RCN, etc.) that maybe just want to get out of the whole business of running their own pay TV operations. They know they've got to convert from QAM to IPTV but do they really want to bother with it for a business that's in decline anyhow? Broadband is where the real money is. Why not just outsource the whole TV thing to a nationally advertised brand like AT&T TV (or YouTube TV) that can be deep-linked into their own network?
Honestly, by 2025, with the exception of DISH (or whoever's running the lone DBS service by then), I'm not sure if there will be ANY noteworthy MVPDs other than those who are actually content owners. Comcast, who owns NBCUniversal, will still be in the game. And at some point after they launch their OTT SVOD app nationwide next year, I think they'll decide to also distribute their Xfinity TV cable bundle service the same way (maybe even in the same app). Why restrict themselves to just their own network footprint? It's not a technical matter -- they could flip a switch and do it today -- but rather a business (and perhaps contractual licensing) matter. But if AT&T is having it both ways, being an in-network and OTT MVPD, why shouldn't they do it too? Like Comcast, AT&T, of course, is a major content owner too with WarnerMedia.
But Charter? Verizon? Cox? Altice? Frontier and the other smaller ones I mentioned above? It increasingly doesn't make sense for them to operate their own cable TV service. When it comes to whether or not Charter customers take cable TV service, Charter's CEO said, "I'm sort of indifferent." Such subscriptions aren't even a "material driver" of Charter's business now. Charter, BTW, has 16 million TV subs, making them the third largest MVPD behind AT&T and Comcast.
In the end, it will just be AT&T and Comcast standing, plus whatever content-owner SVODs such as Hulu (and Amazon? and Apple?) that wish to also distribute live cable channels through their apps. (YouTube TV might stick around for the long-haul if Google can get it to profitability and doesn't get bored with it.)
The landscape in the cable TV world is very rapidly shifting.
Good points. (I would say, though, that DISH has better hardware than DTV, even if their HD PQ isn't as good.)
I would dispute that claim ....
I would say more like 85-90 % HAVE LOS
I also would guess that 15-20 % don't have internet .... let alone fast enough.
IF, thats the design ....
Do they KNOW how to set it up, most do, but again, I set up alot of devices that people don't know how to set up (and thats just finding the SSID and put the password in.)
The rumor among AT&T employees is that the company will dispatch an "in-home sales consultant" rather than a (more highly trained) technician to a customer's home if they need help setting up the AT&T TV box (which will basically require connecting it to the TV's HDMI and the home network via wifi or ethernet, plus maybe entering an AT&T user name and password). While the consultant is there, he or she will also ask if you'd like to switch to AT&T Wireless or, if it's available there, AT&T Fiber/Internet.
