AT&T’s Jeff Weber: No Cord-Cutting Going On HereExec Says U-verse Not Seeing It A Material Way; Telco Would ‘Love’ to Move to A La Carte Model 5/29/2013 1:35 PM Eastern
If there’s a budding cord-cutting trend going on, AT&T U-verse TV isn’t seeing any part of it.
“So far, we have not seen cord-cutting in any material way. In fact, not even in an immaterial way, at least from our perspective,” AT&T president of content and advertising sales Jeff Weber said Wednesday at the Nomura Global Media Summit in New York.
His comments follow a report from Leichtman Research Group finding that video subscriber gains in the first quarter of 2013 by the nation’s top pay TV providers were not enough to avoid a first-ever net subscriber loss in the category over a four-quarter period. While cable continues to lose video subs and the rate of video subscription growth at the telcos is slowing, LRG attributed the broader trend to a mix of service providers applying more focus on higher-value subscribers and seeing some consumers go for free over-the-air TV paired with broadband-delivered over-the-top video content.
But video cord-cutting? Not a problem for U-verse TV, which added 232,000 TV subs in the first quarter, extending that total to 4.8 million. Cable? Well…
“If you are a cable company or kind of stagnant, you notice those things a little more directly," Weber said.
He said OTT services “so far are complementary” and not contributing to cord cutting, at least at AT&T.
Weber was also asked about soaring programming costs. “I think we would love to move to a la carte. We are very open to that model,” he said, adding that the topic tends to come up in discussions involving regional sports networks. But Weber admitted that a tough road is ahead because of current bundling economics and the dual subscription fee/advertising model.
“If you unbundle those networks, not only do you lose the subscription fees potentially but you also lose all that advertising inventory that the content provider gets. I think it is a really tough nut to crack.”
He also addressed whether AT&T would ever try to look for growth opportunities by offering subscription video services over-the-top outside the U-verse footprint. “I think that is an option. I don’t know that it is on top of our list,” Weber said, adding that there are “a lot of issues associated with that” model, including broadband pricing and programming rights.
Weber also discussed the early performance of an upgraded, graphics-rich VOD Storefront for set-tops that AT&T plans to expand to all U-verse systems by the end of May.
“In the markets we have rolled it out thus far, customer feedback is terrific,” he said. “More importantly, we are seeing…14%, 15% increases in usage because the Storefront is easier. It is a better UI.”