Did Stankey Just Say AT&T Doesn’t Need DTV?

[CSM]

https://seekingalpha.com/article/4360254-t-t-ceo-john-stankey-on-q2-2020-results-earnings-call-transcript?part=single

John Stankey

“On the software-based side, I think what I’ve shared with you is my belief is that ultimately you’re coming together with one distribution platform for entertainment. Today we’ve kind of seen SBAUD [ph] and pay TV platforms grow up independently, and there is good reasons why that’s occurred up to this point in time, but there is no reason we should think that over the long haul that once customers are aggregated on one platform or the other, that live stays separate from on-demand general entertainment content. We’re going to see these products ultimately come together.”

“So when I talk about software-based entertainment, I think about the fact that we want a platform with a lot of customers on it that is capable of either delivering general entertainment content under an SBAUD construct or whatever is that appropriate mix of live linear moving forward, and I think that’s probably the optimal way to meet customer needs as we go forward.”

“Do I think that satellite is necessary to respond in that area? You can go back and look at comments I made, I think very early on, you know, post transaction of DirectTV that we didn’t necessarily make that move because we loved satellite as a technology to deliver premium entertainment-based video content. We liked the customer base, and it was an opportunity to move that customer base into the right technology platforms moving forward. That’s clearly where we’re investing and what we’re doing right now, which is building those software platforms that can deliver either live or on-demand entertainment-based content and have that relationship with the customer, using data and analytics we pulled from that and hopefully bridge off other services that those platforms can ultimately deliver. I don’t necessarily view satellite technology as the place that’s necessary to make that happen.“

 

[comp9]

https://seekingalpha.com/article/4360254-t-t-ceo-john-stankey-on-q2-2020-results-earnings-call-transcript?part=single

John Stankey

“On the software-based side, I think what I’ve shared with you is my belief is that ultimately you’re coming together with one distribution platform for entertainment. Today we’ve kind of seen SBAUD [ph] and pay TV platforms grow up independently, and there is good reasons why that’s occurred up to this point in time, but there is no reason we should think that over the long haul that once customers are aggregated on one platform or the other, that live stays separate from on-demand general entertainment content. We’re going to see these products ultimately come together.”

“So when I talk about software-based entertainment, I think about the fact that we want a platform with a lot of customers on it that is capable of either delivering general entertainment content under an SBAUD construct or whatever is that appropriate mix of live linear moving forward, and I think that’s probably the optimal way to meet customer needs as we go forward.”

“Do I think that satellite is necessary to respond in that area? You can go back and look at comments I made, I think very early on, you know, post transaction of DirectTV that we didn’t necessarily make that move because we loved satellite as a technology to deliver premium entertainment-based video content. We liked the customer base, and it was an opportunity to move that customer base into the right technology platforms moving forward. That’s clearly where we’re investing and what we’re doing right now, which is building those software platforms that can deliver either live or on-demand entertainment-based content and have that relationship with the customer, using data and analytics we pulled from that and hopefully bridge off other services that those platforms can ultimately deliver. I don’t necessarily view satellite technology as the place that’s necessary to make that happen.“

He said nothing that hasn’t been said before. They bought directv for the customer base. Not to own a bunch of Satellites. Directv will end at some point. But not as imminent as people think

 

[CSM]

Stankey said this about DTV on CNBC.

CNBC Exclusive: CNBC Transcript: AT&T CEO John Stankey Speaks with CNBC's "Squawk on the Street" Today

www.cnbc.com

FABER: Yeah. You know it’s interesting, John. It’s comments like the ones you just made in terms of focusing on the assets that have been assembled but making sure you sort of focus on those that are growing, and even a comment that you just made on the conference call when you answer the question about is satellite necessary that gets people to believe that you may consider jettisoning Direct TV. Is that something you’re considering?

STANKEY: Well, I’m not going to speculate on anything, David. We always have a policy as you know of not doing that, but you know what I care about our customers and our relationship with customers and as I said from the start. When we did the direct tv transaction what we were interested in is ensuring that we could build a platform that allowed us to do things like offer advertising into our customer base allow them to take their entertainment wherever they go to do it on their terms, and we were talking about that back in 2015, and HBO Max and what we’ve done with AT&T TV gives us some very capable platforms to ensure we can continue to evolve the product in that way. And to the extent that we’re able to get those customers engaged with us on those platforms, then you know, we’re in a good place and we’re okay with that. And if that takes us down a path that says satellite delivery is less important, so be it. But I’m not going to speculate on where we go.

FABER: Understand, although satellite delivery does seem to be becoming less important given you continue to lose subs. This is obviously a very difficult time, bars and restaurants, for example, not open and they’re big users of the product, but you’ve also said john as well that TV and SVOD you see them becoming one over the next few years, that would seem to indicate your belief that it’s not necessarily a core asset DirecTV.

STANKEY: Well again, you’re distinguishing Direct TV and you’re looking at it as labeling it. I view the customers of Direct TV oftentimes is not necessarily attached to the asset per se. So, you know what I clearly believe as its software-based technology platforms are really important for our business moving forward. And they’re able to deliver the kind of product that a customer likes and that’s where we’re focused on our investment in what we’re going to do moving forward.

 

[comp9]

Stankey said this about DTV on CNBC.

CNBC Exclusive: CNBC Transcript: AT&T CEO John Stankey Speaks with CNBC's "Squawk on the Street" Today

www.cnbc.com

FABER: Yeah. You know it’s interesting, John. It’s comments like the ones you just made in terms of focusing on the assets that have been assembled but making sure you sort of focus on those that are growing, and even a comment that you just made on the conference call when you answer the question about is satellite necessary that gets people to believe that you may consider jettisoning Direct TV. Is that something you’re considering?

STANKEY: Well, I’m not going to speculate on anything, David. We always have a policy as you know of not doing that, but you know what I care about our customers and our relationship with customers and as I said from the start. When we did the direct tv transaction what we were interested in is ensuring that we could build a platform that allowed us to do things like offer advertising into our customer base allow them to take their entertainment wherever they go to do it on their terms, and we were talking about that back in 2015, and HBO Max and what we’ve done with AT&T TV gives us some very capable platforms to ensure we can continue to evolve the product in that way. And to the extent that we’re able to get those customers engaged with us on those platforms, then you know, we’re in a good place and we’re okay with that. And if that takes us down a path that says satellite delivery is less important, so be it. But I’m not going to speculate on where we go.

FABER: Understand, although satellite delivery does seem to be becoming less important given you continue to lose subs. This is obviously a very difficult time, bars and restaurants, for example, not open and they’re big users of the product, but you’ve also said john as well that TV and SVOD you see them becoming one over the next few years, that would seem to indicate your belief that it’s not necessarily a core asset DirecTV.

STANKEY: Well again, you’re distinguishing Direct TV and you’re looking at it as labeling it. I view the customers of Direct TV oftentimes is not necessarily attached to the asset per se. So, you know what I clearly believe as its software-based technology platforms are really important for our business moving forward. And they’re able to deliver the kind of product that a customer likes and that’s where we’re focused on our investment in what we’re going to do moving forward.

That’s exactly what he said in the first post

 

[Jimbo]

So Stankey pretty much side stepped any questions about Directv and moved to the Streaming side at every opportunity ....

 

[slice1900]

So Stankey pretty much side stepped any questions about Directv and moved to the Streaming side at every opportunity ....

Even if they were considering a sale or spinoff he's not going to admit it unless/until they were ready to do so. And if they aren't considering it he's probably not going to admit that either because analysts want to hear about 'new' technologies and think AT&T TV is somehow very different from Directv despite being the same MVPD strategy with a different delivery method.

Plus regardless of what they may be thinking today things may change and he doesn't want to suggest they are pursuing a particular strategy today only to pursue the opposite strategy later this year and have to deal with people asking them they changed their mind.

 

[robjlevin]

ATT is a publicly traded company. Any statements made by Stankey are going to be made very, very carefully.

I'm not sure what people are expecting but you're not going to get anything detailed unless it's already pretty much carved in stone, especially with technology that can change so quickly.

 

[CSM]

Is AT&T in a catch-22 with DTV? They can’t sell it until most of its customers switch to AT&T TV. Then who would want to buy DTV without customers?

 

[Radioguy41]

The fact of the matter is AT&T seriously miscalculated when it bought DTV thinking they could just say "please" and all those DTV customers would willingly flop over to an AT&T streaming product with so many better options available. Granted he has to couch his words but frankly he's delusional if he believes anyone is still buying "the customer base" as a sustainable reason for hanging on to DTV. If he were smart, and he does not seem to exhibit that trait, he'd unload DTV now at any price offered and write off the loss as just another AT&T bad business decision. The problem is who'd want it at anywhere near what AT&T paid so if, and that's a big IF, they could even find a buyer the writeoff would be huge.

 

[Marcingak]

The fact of the matter is AT&T seriously miscalculated when it bought DTV thinking they could just say "please" and all those DTV customers would willingly flop over to an AT&T streaming product with so many better options available. Granted he has to couch his words but frankly he's delusional if he believes anyone is still buying "the customer base" as a sustainable reason for hanging on to DTV. If he were smart, and he does not seem to exhibit that trait, he'd unload DTV now at any price offered and write off the loss as just another AT&T bad business decision. The problem is who'd want it at anywhere near what AT&T paid so if, and that's a big IF, they could even find a buyer the writeoff would be huge.

Yep. They're not going to get anyone to switch to streaming when they charge more than all of the other streaming services.

 

[slice1900]

The fact of the matter is AT&T seriously miscalculated when it bought DTV thinking they could just say "please" and all those DTV customers would willingly flop over to an AT&T streaming product with so many better options available. Granted he has to couch his words but frankly he's delusional if he believes anyone is still buying "the customer base" as a sustainable reason for hanging on to DTV. If he were smart, and he does not seem to exhibit that trait, he'd unload DTV now at any price offered and write off the loss as just another AT&T bad business decision. The problem is who'd want it at anywhere near what AT&T paid so if, and that's a big IF, they could even find a buyer the writeoff would be huge.

The idea wasn't to push current Directv customers to AT&T TV, that wouldn't save them a dime. The idea was to do as many NEW installs as possible on AT&T TV - the churn is such that they'd have more AT&T TV customers than Directv customers in 3 years or less if they did that.

The jury is still out on that, but until AT&T TV is the same product (in particular that it has NFLST, and has a solution for customers who have more than 3 TVs) customers won't consider them equivalent.

 

[MitchDeerfield]

The fact of the matter is AT&T seriously miscalculated when it bought DTV thinking they could just say "please" and all those DTV customers would willingly flop over to an AT&T streaming product with so many better options available. Granted he has to couch his words but frankly he's delusional if he believes anyone is still buying "the customer base" as a sustainable reason for hanging on to DTV. If he were smart, and he does not seem to exhibit that trait, he'd unload DTV now at any price offered and write off the loss as just another AT&T bad business decision. The problem is who'd want it at anywhere near what AT&T paid so if, and that's a big IF, they could even find a buyer the writeoff would be huge.

Purchasing DirecTV at top dollar was a major blunder and huge waste of money. Now all of the AT&T execs are playing CYA, pretending that the whole idea was well planned out and strategic.

The main thing is so that everyone keeps getting their fat paychecks while acting like they made a smart corporate move.

 

[NashGuy]

The idea wasn't to push current Directv customers to AT&T TV, that wouldn't save them a dime.

And yet I read that DTV customers calling up AT&T and complaining about their bills are being pushed toward AT&T TV. I think DTV customers are eligible to sign up as new customers for AT&T TV, taking the 2-yr contract along with the first-yr promo pricing and Visa gift cards, aren't they?

The idea was to do as many NEW installs as possible on AT&T TV - the churn is such that they'd have more AT&T TV customers than Directv customers in 3 years or less if they did that.

Yeah, they're definitely focusing on AT&T TV for new installs now. Don't think I've seen a single ad for DTV -- not direct mail, not online, not TV -- since AT&T TV launched. All their advertising I see now is for AT&T TV. Of course, I live in an area with AT&T Fiber, which makes a difference. Maybe if I lived out in the boonies, I'd still get direct mail pieces for DTV.

The jury is still out on that, but until AT&T TV is the same product (in particular that it has NFLST, and has a solution for customers who have more than 3 TVs) customers won't consider them equivalent.

Most current and potential DTV customers don't care about those things. The 3 TV limit is easily addressed for in-home viewing, as Hulu Live and PS Vue already did. As with 4K HDR, I have to think it's just one of those technical features that's on AT&T TV's roadmap but that they haven't felt the need/had the resources to implement yet. The percentage of US households that watch cable TV on more than 3 screens simultaneously has to be pretty low at this point.

As for lack of NFLST, yes, that will be a reason for some folks to stick with DTV. Although I'm skeptical that there will end up being much of an NFL season this year at all. (If kids start going back to school, it's going to pour gasoline on the pandemic fire.) And isn't the '21 season the last one on DTV's contract to offer NFLST? After that, I question whether AT&T will renew an exclusive deal in place to carry NFLST at all, except perhaps to DTV's commercial establishments (e.g. sports bars) like yours (assuming that AT&T even operates DTV at that point). For residential customers, I guess it's possible that they strike a deal to offer NFLST as an exclusive add-on to HBO Max. I'd be surprised if either side wanted to see NFLST only available as an add-on to a full cable channel package given the inexorable demise of cable TV.

 

[Claude Greiner]

What AT&T didn’t see was the market switch to streaming as fast as it did

 

[slice1900]

And yet I read that DTV customers calling up AT&T and complaining about their bills are being pushed toward AT&T TV. I think DTV customers are eligible to sign up as new customers for AT&T TV, taking the 2-yr contract along with the first-yr promo pricing and Visa gift cards, aren't they?

What do you mean "their bills are being pushed toward AT&T TV"? AT&T can't convert Directv customers to AT&T TV simply by sending them a new bill.

Sounds like you are talking about how they changed Directv billing to AT&T billing, which screwed up a few things AT&T didn't make provision for like owned receivers. That's a totally different thing.

 

[NashGuy]

What do you mean "their bills are being pushed toward AT&T TV"? AT&T can't convert Directv customers to AT&T TV simply by sending them a new bill.

Sounds like you are talking about how they changed Directv billing to AT&T billing, which screwed up a few things AT&T didn't make provision for like owned receivers. That's a totally different thing.

No, you misread or misconstrued what I wrote. I believe I've read posts by disgruntled DirecTV customers who said they've called up AT&T customer service this year (to complain about their bill, etc.) and the agent pitches them AT&T TV instead. If that's true, then that indicates that AT&T *is* trying to convert existing DTV customers over to AT&T TV, at least reactively. I've read nothing to indicate that they're proactively trying to convert them by, for instance, sending targeted paper mail or email ads/offers to current DTV customers to lure them over to AT&T TV. But, for all I know, maybe they are.

 

[slice1900]

No, you misread or misconstrued what I wrote. I believe I've read posts by disgruntled DirecTV customers who said they've called up AT&T customer service this year (to complain about their bill, etc.) and the agent pitches them AT&T TV instead. If that's true, then that indicates that AT&T *is* trying to convert existing DTV customers over to AT&T TV, at least reactively. I've read nothing to indicate that they're proactively trying to convert them by, for instance, sending targeted paper mail or email ads/offers to current DTV customers to lure them over to AT&T TV. But, for all I know, maybe they are.

Well if a customer is unhappy and threatening to leave, of course AT&T is going to offer them options to stay. The only strategy they used to have was offering them discounts or freebies like free NFLST. Now they can offer them AT&T TV without having to offer to cut prices (which resulted in a lot of people who knew about this calling up and whining on a yearly basis just to get discounts)

 

[rad]

AT&T wants to push streaming but for me I'd stay with DIECTV as long as I can. AT&T is our ILEC but they don't have fiber in our development, all underground utilities to lots more to string fiber and their 45Mbps DSL won't cut it. Our cable company is Spectrum which right now doesn't implement caps till 2023, but only because it was part of the deal for buying Time Warner. But now Spectrum is asking the FCC to allow them to implement caps early, so besides the normal cable fee there's the chance of also paying for caps.

 

[Claude Greiner]

AT&T wants to push streaming but for me I'd stay with DIECTV as long as I can. AT&T is our ILEC but they don't have fiber in our development, all underground utilities to lots more to string fiber and their 45Mbps DSL won't cut it. Our cable company is Spectrum which right now doesn't implement caps till 2023, but only because it was part of the deal for buying Time Warner. But now Spectrum is asking the FCC to allow them to implement caps early, so besides the normal cable fee there's the chance of also paying for caps.

At this point it makes no difference if you stream Directv or get it via satellite.

Once AT&T runs fiber to your area, it will be much cheaper for them to stream the content.

The fact they no longer have to send out a tech to your home for anything is a big cost savings

 

[rad]

At this point it makes no difference if you stream Directv or get it via satellite.

Once AT&T runs fiber to your area, it will be much cheaper for them to stream the content.

The fact they no longer have to send out a tech to your home for anything is a big cost savings

AT&T right now doesn’t have the cash to be spending on running fiber to everywhere. Hell, Google which has tons more money then AT&T has pulled way back on their fiber plans due to costs.