AT&T Buy Of DirecTV Makes U-verse Profitable

by Wayne Friedman , January 23, 2015

Nearing a completed acquisition of its proposed $48.5 billion deal for DirecTV, AT&T says it is considering changing the brand name of the big satellite TV provider.

During an interview at World Economic Forum in Davos, Switzerland with The Wall Street Journal, Randall Stephenson, CEO of AT&T, says the company has been testing both “AT&T” and “DirecTV” for the name of a newly combined pay TV provider.

"We haven't decided yet how we are going to brand it," Stephenson said. "We're testing the DirecTV brand and the AT&T brand, so we're doing a lot of thinking."

For several years now, AT&T has operated its “U-verse” IPTV-delivered TV provider, which now has around 7 million subscribers. But Stephenson reveals that AT&T’s “U-verse” as a business continues to struggle.

"With 6 or 7 million video subscribers — growing at 24% — we still can't make money because of the programming costs," he said. With the DirecTV acquisition, AT&T total video subscribers would get to 27 million U.S. subscribers.

But with DirecTV, the business takes on a different light. "Put it together with DirecTV, and we have a profitable business to sell into. With DirecTV, we have an ability for someone to walk out of an AT&T store with an iPad and lots of programming. No one else can do that."

brand image, iptv, m&a, satellite tv, tv

2 comments about "AT&T Buy Of DirecTV Makes U-verse Profitable ".

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Allan Caplan from Caplan Consulting, January 23, 2015 at 4:15 p.m.
Change the U-verse Name to DIRECT TV.
5 TIMES THE ACCOUNTS, 5 TIMES OR MORE THE
CREDIBILITY AND SERVICE REPUTATION.
CHANGE TO U-VERSE BRAND, LOOK FOR A JOB OUT OF MARKETING..............
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Brian Steffens from University of Missouri, January 27, 2015 at 1:42 p.m.

A marketing team's worst nightmare! DirecTV has a generally positive image out there ... quality, reliability, customer service, etc. AT&T has plenty of negatives (pricing, a [former?] phone company that can't answer customer calls [pushes them to web], billing snafus, dropped calls, dead service areas). Why would they want to cripple their new TV venture with all that baggage?