If you can’t beat ‘em, join ‘em?
AT&T Inc. has jumped on the online video wagon with AT&T Entertainment, a new Web site available to any online customer in the U.S., which will provide thousands of streaming TV shows and movies from numerous content providers, including ABC, NBC Universal, CBS Interactive, and many more.
The launch is part of the carrier’s “three-screen” strategy to let customers access content anywhere, be it on televisions, PCs or wireless devices. Anyone can use the site, but AT&T U-verse TV and Internet customers get something extra: they can sign in at the site to access U-verse Web Remote Access, an application that allows customers to schedule and manage DVR recordings directly from their PC.
But AT&T Entertainment is not just a way to keep U-verse TV customers from getting off the AT&T boat, as it were, when they go online. The site is actually partnering with Hulu for some of the content, and as such it may represent a new business paradigm that brings together carriers and their over-the-top rivals.
Hulu of course is the online video site from NBC and Fox that is eating into traditional broadcasters’ viewership, attracting 38 million viewers in July alone, according to ComScore. For a TV provider like AT&T, sites like Hulu are a threat but one that is difficult to quarantine. It faces the conundrum of having to pay content providers to license shows while losing eyeballs (and millions in broadcast advertising dollars) to time-shifted and on-demand programming … but time-shifted and on-demand programming is what subscribers are demanding. A partnership model (and revenue share, presumably) might be a way to satisfy all parties’ interests to some degree, even if the online advertising model offers a lower revenue profile than 30-second television spots.