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SCTE ET: TV expert says AT&T�s video play has 12-18 months left
01-18-08, By Mike Robuck

AT&T will be out of the video business within the course of the next 12 to 18 months, according to president Phillip �Swanni� Swann.

Swann was speaking at the luncheon keynote address during Wednesday�s SCTE Conference on Emerging Technologies (ET) when he made his prediction about AT&T�s future in video. Swan, who claims an 89 percent success rate with his prognostications, made nine other video-related predictions for the year.

In the case of AT&T, Swann said the company has spent too much time and money for its 250,000 video customers while Verizon has racked up one million subs for its service.

AT&T could buy more subs by attempting to acquire Dish Network or DirecTV, or by getting out of the video business altogether, Swann said.

AT&T could also continue its third-party partnerships with Dish or DirecTV, but Swann said that would also lead to the end of AT&T�s video service, as the company would fade to the background.

Overall, cable is facing attacks on its flanks from telco and satellite video providers, as well as from �insurgents� such as Apple TV, Netflix and Microsoft.

�Cable is still the dominant player in this war in terms of penetration,� Swann said. �Cable is being attacked from all sides by a variety of weapons.�

Swann said cable can not only prevail in the war against insurgents, telcos and satellite companies, but it can also increase its lead. Of the players in the field, Swann said cable seems to have the most common sense.

Swann�s other nine predictions were:

  • Throughout the next year, satellite will emphasize its HD offerings in an effort to win over customers from cable, since satellite does not have a triple-play. And because satellite cannot gain revenue from triple-play bundles, the providers will focus on earning more revenue from each subscriber.
  • Telcos need to find a way �to get bigger faster,� Swann said. The options include buying satellite providers, but the telcos can�t take a lot of time in building up their subscriber bases.
  • The insurgents will �introduce a slew of new products and services to siphon off revenues from traditional video providers,� according to Swann, but some of these launches are mere feints to throw off the competition. Swann pointed to Microsoft and Sony as two companies that have enough money to burn by launching products in order to confuse competitors and gain information.
  • Backed by research, consumers will say they want more products and services, but when those products and services show up in retail stores this year, they won�t buy them by the truckloads. Swann�s advice to cable is to not create new services just because everyone else is.
  • Downloads will be the disappointment of the year. Swann said the four-minute download demonstration that Comcast CEO Brian Roberts did at the Consumer Electronics Show (CES) earlier this month was still too slow for consumers. The picture quality in some of the download services also needs to improve dramatically.
  • Consumers will buy fewer set-top boxes (STBs) this year. Swann said consumers are �tired of buying and connecting� STBs, digital video recorders (DVRs) and gaming boxes. Additional STBs need to be extraordinary to consumers, and Swann said that he does not see extraordinary boxes in the current marketplace.
  • Customers will have less patience for technology this year, especially if there is a downturn in the economy. �People will get frustrated with things that don�t work,� Swann said.
  • Cable needs to be careful of how it markets itself this year. Instead of a �one-size-fits-all� approach, cable should tailor its triple-play and HD campaigns on a market-by-market basis. For example, cable does not want to over-emphasize its triple-play campaigns in some markets because that could cause some customers to think satellite has a better HD play.
  • The insurgents from Silicon Valley will disappear. Swann said the insurgents are not dedicated players in the video market, and that some may eventually partner with cable or satellite providers.
  • In closing, Swann said that cable can build on its success by not falling for the hype that surrounds new technologies and services.