Pay-TV Operators Eye Mobile Video To Reduce Subscriber Costs

AT&T officials offered some pretty eye-popping numbers this week on the impact of the DirecTV acquisition on the bottom line. Speaking at the Goldman Sachs Communicopia conference in New York AT&T CFO John Stephens said DirecTV pays $17 a month less per subscriber in content costs “on an apples-to-apples basis” compared to what AT&T has been paying per U-Verse subscriber.

AT&T is now working to “bring those prices in line” by moving everything to “the most efficient contract pricing in the house,” which is the DirecTV price. “So with 6 million U-Verse subscribers you can get your head around about $100 million a month,” in savings, he said, or $1.2 billion per year. “That’s sort of the easy math on iphone_TVhow you can conceptualize the scale” of the savings.

The math could soon get even easier for AT&T. “Right now we have 75 million smartphones and tablets and 50 million broadband locations that we don’t sell video to today,” Stephens said. “So we have 125 million locations we can take to the content team and say, let’s work together to sell something. It doesn’t have to be an adversarial situation, it’s here’s your growth and we built this integrated carrier model to take advantage of that.” Read More »