Att Eventually Volition Desire To Ain To A Greater Extent Than Of The Content It Delivers

It has been a staple of strategy for the leading USA cable TV operators, for to a greater extent than than a duet of decades, that a distributor has to ain at to the lowest degree exactly about of the content it delivers. That is why the leading cable TV companies ain programming assets.

Keep inwards heed that exactly about questioned whether distributors (cable TV companies) would live on “good” at operating programming entities. That has non proven to live on a full general problem, though execution ever is an issue.

AT&T, already the largest USA supplier of linear video, as well as moving to perish a major provider of “over the top” content, is probable to live on dependent area to many of those same objections, much equally telcos in 1 lawsuit were questioned equally providers of linear video amusement services.

That should logically Pb to AT&T becoming an owner of content assets, for the same reasons cable TV operators made the deed into content property ownership: access powerfulness live on a commodity; content is not.

If yous desire to know how it is that gross revenue for content services tin grow, piece gross revenue for other services declines, it is the departure betwixt what is scarce, as well as what is not.

Simply, network access, plainly vanilla vocalization as well as messaging are largely commodities. It is hard to differentiate, at that topographic point is lots of competition, many production substitutes as well as suppliers. But video amusement is non an “access to the network” service.

Customers purchase the content, non bandwidth; experiences they want, non minutes of use. Network access is exactly business office of the product, non the argue whatever consumer buys the product.

Given its commitment to content revenues, it is non a stretch to advise that AT&T probable volition follow the clear strategy followed past times cable TV companies: ain at to the lowest degree exactly about of the content delivered past times the content service.

That is alongside the antidotes for ever-declining average revenue per unit, per work organisation human relationship or per user. Access, computing as well as carry follow Moore’s Law, inwards terms of price-per-unit of capacity. Content does not.

At to the lowest degree historically, content assets--where consumers perceive value--appreciate where it comes to price. Profit margins are easier to defend, equally well.

So await for AT&T to brand large moves into content ownership. It is a proven strategy for many tier-one video services providers.