AT&T CFO: Network efficiencies will create cost savings for our DirecTV OTT customers

(Credit: Mike Mozart/Flickr)

AT&T is planning a wide-scale launch of its DirecTV OTT products later this year and it is already eying network efficiencies as a way to make the services more cost competitive.

Speaking today at the Oppenheimer Technology, Internet and Communications Conference, AT&T CFO John Stephens played up the advantages he believes AT&T will have when it enters the OTT video space with DirecTV Now and its other virtual pay-TV services.

Specifically, Stephens pointed toward the strong content provider relationships that come from being the largest pay-TV content customer and the network integration video delivery capabilities that come with having nationwide wireless, pay-TV and broadband services.

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“We believe we can do a seamless integration of that delivery over a variety of devices like no one else can do because we’re the only ones that have that integrated carrier aspect,” said Stephens. “In addition we can take cost savings from efficiencies in that ecosystem and we can provide those to our customers to make us more competitive or reinvest those in our shareholders.”

AT&T wants its DirecTV OTT product to target the 20 million U.S. households without pay-TV service.

Stephens’ comments about AT&T/DirecTV’s ability to drive down OTT product costs come as would-be competitors like Hulu’s upcoming live streaming TV service work toward launch with a level of skepticism around pricing. Although Hulu has yet to confirm pricing tiers for its live TV service, reports have pegged it somewhere in the $35 to $40 range, which would make it more expensive than basic tiers from virtual pay-TV providers like Sling TV and PlayStation Vue that are already out in the market.

Stephens didn’t go into details about potential functions that will be baked into the DirecTV OTT services but services like DVR and targeted advertising are all under consideration.

“We believe our OTT product is going to be a much more fulsome product. We’re the only ones that have the scale and scope,” said Stephens.

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