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AT&T to Pour $500 Million Into Their Own Netflix Clone
by Karl Bode 06:27PM Tuesday Apr 22 2014
On the same day that Netflix was calling out AT&T's U-Verse network for poor streaming performance, AT&T announced that it was investing in an over the top streaming video service of its own. According to AT&T's press release, AT&T and the Chernin Group will contributing $500 million toward a new venture that will "acquire, invest in and launch over-the-top (OTT) video services.

"AT&T’s network resources bring enhanced opportunities for this new content alliance to create compelling offerings for consumers," proclaims the company. Like Verizon's joint venture with RedBox, AT&T obviously wants to have its own video streaming operation in play as video moves away from traditional coax networks.

AT&T's video streaming attempts have historically been "me too" affairs, ranging from a video portal that was effectively a Hulu clone to the U-Verse Screen Pack, which was touted as a "Netflix killer" but suffered from a limited catalog and is only available to U-Verse users for an additional $5 a month.

AT&T circulated a survey among U-Verse users last year polling interest in a "virtual MSO" that provided a smattering of content and channels "at a significantly lower price than traditional pay TV services."

Whether this new venture results in a quality, consumer friendly video platform is anything but clear. Verizon's streaming joint venture with RedBox was announced with great fanfare, but hasn't been a particularly disruptive presence because Verizon's afraid of cannibalizing their traditional TV subscribers. We've seen a similar problem wherein Hulu never seems to disrupt because its broadcast TV owners don't want it to.

Any AT&T-owned streaming video service would likely operate under the same constraints, unable to innovate in the way Netflix and Amazon have because there's no true interest in disruption. Offer too compelling of an over the top product at an exciting price, and you risk losing your traditional cable customers to the product.

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Ut98Ex

join:2012-07-11
Simpsonville, KY

500 billion?

That is more than AT&T is worth isn't it?
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

Re: 500 billion?

There must be some government funding involved.

ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA
AT&T is worth a lot more than we will ever know about.

Mizzat
Will post for thumbs
Premium
join:2003-05-03
Atlanta, GA
kudos:1
To Karl, it's peanuts.

Jim_in_VA

join:2004-07-11
Cobbs Creek, VA
kudos:4

Re: 500 billion?

karl needs a better spil chkr

ncsupcc

@rr.com
...that's almost equivalent to Chicago's Gross Metropolitan Product...

CosmicDebri
Still looking for intelligent life

join:2001-09-01
Port Saint Lucie, FL

Title is correct

It says 500 MILLION in the title, but in the first paragraph it does say BILLION which is a typo. Going over to the att page it says MILLIONS there...... so just a leetle oopsy on Karl's part there.....
--
Follow Your Bliss -- Joseph Cambell
I reject your Reality and substitute my own! -- Adam Savage, Mythbuster

loli
Premium
join:2002-08-26
South Richmond Hill, NY

Re: Title is correct

Karl getting slightly sloppy lately lol. It would have been amazing to see what kind of netwosk they'd pull with 500 billion.

DeathK
Premium
join:2002-06-16
Cincinnati, OH

Re: Title is correct

said by loli:

netwosk

Speaking of sloppy...
--
Photos By Greg Strong

bmccoy

join:2013-03-18
Port Orchard, WA

Re: Title is correct

Just like AT&T's CEO, Reed Hastings, announced that Netflix will be raising their rates.

Jim_in_VA

join:2004-07-11
Cobbs Creek, VA
kudos:4
+1

loli
Premium
join:2002-08-26
South Richmond Hill, NY
said by DeathK:

said by loli:

netwosk

Speaking of sloppy...

It was a reference to this
»Time Warner Cable Enables Hotspot 2.0 Across Wi-Fi Network
dragonman300

join:2011-03-02
Anaheim, CA
kudos:1

Simba7
I Void Warranties

join:2003-03-24
Billings, MT

We'll install FTTH across the map..

...for $100 BEEELEEON DOLLARS!

Oh wait.. That would go to our executive bonuses. So we need more than that.

How about $500 BEEELEEON DOLLARS?! ..and we'll hold the nation's broadband infrastructure hostage until we get it!

»www.youtube.com/watch?v=jTmXHvGZiSY
posthaste

join:2001-05-20
Champaign, IL

2 recommendations

Karl Made a Mistake

$500 billion is what AT&T spends on lobbying, in-house lawyers, and corporate PR (aka astroturfing).
jorcmg

join:2002-10-24
USA

mo money

What a difference three 0s can make.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

consumer friendly

and A T & T in the same sentence: rofl!
--
Despises any post with strings.

odreian615

join:2006-01-18
Chicago, IL

Because it worked so well with Screensavers

Just cave in already and have a Netflix and HULU channel on their STB's. If you think people will just downgrade, just let the users of it's top tiers access it.
tabernak

join:2013-08-10
Reviews:
·AT&T U-Verse
·AT&T DSL Service

Feels like a warmup to me

HBO GO, Verizon's Redbox venture, Dish's Blockbuster streaming, At&t's U-verse clone, Hulu Plus, WatchESPN, etc all feel like these companies are getting acquainted with streaming technologies so they're prepared when the time comes that they can make more money via streaming than traditional cable/satellite. I look forward to that day.

jap
Premium
join:2003-08-10
038xx

1 edit

1st thought: ATT too incapable against Netflix & Amazon...

2nd thought: Oh, right. No net neutrality in the land of the free. ATT can just start fucking with competitor packets whilst prioritizing their own.

At least their partner Chernin Group is well situated in the content world. If this bird flies it'll be because they are able to wrangle rights deals. Steep hill to climb against Netflix though. Much as I dislike the anti-trust dynamics of ISPs getting involved in content it's difficult to not cheer for advancements in a la carte.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: 1st thought: ATT too incapable against Netflix & Amazon...

said by jap:

ATT can just start fucking with competitor packets whilst prioritizing their own.

Which hasn't happened.
etaadmin

join:2002-01-17
Dallas, TX
kudos:1

The road is paved with the bodies...

I remember a quote along time ago about Microsoft.

quote:
The road is paved with the dead bodies of companies trying to compete against Microsoft.

The same is true for at&t.

phunkysmell

@comcast.net

peering links

Oh, so they can afford to pour $500 million down the drain on a DOA product, but can't afford to upgrade their peering links (thus making their paying customers happier)? I guess from ATT executives' perspective, deleting $500 million is way better than helping OTT services take away their own video revenue, and who cares about the customers, so why not?
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: peering links

said by phunkysmell :

but can't afford to upgrade their peering links?

Your assumption. Why aren't any of the CDNs complaining about peering issues?
political_i

join:2013-11-12
$500 million would be enough to service an entire city with FTTH. Perhaps a few cities if they were cherry picking.

Either way, to complain about peering yet they have $500 million to throw at building a new service is a double standard.
Rakeesh

join:2011-10-30
Mesa, AZ
Reviews:
·Sprint Mobile Br..
·Cox HSI

Re: peering links

It's not a double standard, but it does show that they are overstating their financial burdens.

In order for an ISP to continue to grow and upgrade their networks (as customers and government regulators alike demand) they do have to make a significant profit, or else upgrades won't be possible. However I don't think profitability is a problem for them in light of this.

invalidname

join:2000-12-24
Grand Rapids, MI

Chernin Group

The one thing that makes this slightly interesting is the participation of Chernin Group, who last year bought Crunchyroll, one of the real success story in pure-play IP video (they have something like 200K paying subscribers, and lots more just watching ads)

gerick

join:2001-01-17
San Antonio, TX
kudos:1

Re: Chernin Group

Crunchyroll, Pandora, Flipboard, and (before selling it) Tumblr.

gerick

join:2001-01-17
San Antonio, TX
kudos:1

Acquire, Invest in and Launch

quote:
... the formation of a venture to acquire, invest in and launch over-the-top (OTT) video services ...
Acquire, Invest in and Launch. We will get a video service, one way or another.