[Satellite TODAY 05-27-11] At the end of 2010, AT&T and Verizon had between them around 6.5 million direct TV subscribers, giving ample evidence of the threat of telcos to both cable and satellite pay-TV providers in the United States. In the first quarter of the year, Verizon added more than 192,000 net new subscribers, and AT&T added more than 218,000 net new subscribers. Verizon now has 3.7 million FiOS TV customers and AT&T has 3.2 million direct customers for its U-Verse TV service.  

     TV is becoming more important for telcos. Sharolyn Farmer, Executive Director, Video and Converged Services, AT&T Labs, outlined to Satellite News the operator’s video strategy going forward. “We are very much the new kids of the game, but we have been acquiring subscribers faster than any other U.S. provider based on the recorded numbers. We have been growing at about a million subscribers a year. It is significant. Even though we are relatively new to the game, our belief is that we have a winning solution. We have a service that customers want and we are willing to provide it. Along with the content and applications, we are on the track,” she says. “First, you have to look at the customer growth. Secondly, you have to look at the revenue stream. Third, our customer service metrics and the fact that we have been recognized by J.D. Power for customer satisfaction. What we have found is the ability to bundle our services and provide one-stop shopping to our customers and to provide it in a way that services are complementary to one another has been a winning strategy.”

     Interestingly, the operator could look to play more of a role in content production as the next stage in boosting the U-Verse proposition. “We are trying to enhance that customer experience by providing as much compelling content as we can, even if that means we produce the content ourselves. We want to give them the capability of integrating with their devices, whether that is putting content on their devices, or viewing complementary content on devices. So, lets just say, we would look to produce an awards show. We can go behind the scenes and have interviews with actors and actresses for example. We are looking to provide compelling anecdotal information to our customers. I think we have to find a balance when producing our own content. We are not doing it because we can’t get the content otherwise. What we are doing is taking a live view on what customers are looking for. We are trying to provide that content wherever we can. It really is complementary. It is complementary to applications that we have. It really is the whole thing.”

     The operator’s strategy going forward is will be its ability to provide the U-Verse service on different devices and platforms. “We are increasing their reach of our services. We are increasing interactive applications. We are also embracing the multi-screen strategy. We actually believe there are a multitude of screens in the house. We want mobile content to play on the TV. We believe the second screen becomes very important. We have seen that a growing number of our customers are watching TV at the same time they have Internet access. We want to make it easier for them to follow television, show specific information. We are trying to build in that capability for users,” she says.

     AT&T announced a tablet application at the CES show this year. In terms of its work here, Farmer says, “We also have an iPad application, but we started off with an iPhone application called U-verse Mobile. This application provides the user with an enhanced U-Verse guide, so they are able to get additional information on their services. It also allows them to control their DVR and manage their recordings. Customers can also view TV shows within the app, which is available on more than 14 smartphones.”

     In terms of the business model, Farmer thinks things like iPad apps are really more about customer retention than revenue generation. “It is more to provide customer retention. It is an application that we don’t charge for. What we are seeing is that customers want to be connected to the content that they want, when they want and where they want,” she says.