AT&T's Stankey: 'We didn't buy DirecTV because we love satellite as a distribution medium'

Speaking to investors a day after his company announced new game-changing IP-only products for its DirecTV platform, AT&T Entertainment Group CEO John Stankey said his company is aiming to "get to a common middleware," able to use the leverage of its 26-million-strong customer base to economically "deliver content to all platforms."

"We didn't buy DirecTV (NYSE: T) because we love satellite as a distribution medium," said Stankey, speaking at the Morgan Stanley Media, Technology and Telecom Conference Wednesday. 

The introduction of the three very different IP-only DirecTV products, which will roll out in the fourth quarter, is aimed at the 20 million broadband users in the U.S. that don't currently subscribe to a pay-TV service, Stankey said.

"We talk about them in shorthand as 'cord cutters,' but they're not part of the ecosystem for other reasons," he added. "Just as important are those who are credit-challenged and those who live transient lifestyles."

In approaching various portions of this untapped, broadband-only market, Stankey says the price leverage AT&T now enjoys with content creators lets them play in each market with a significant advantage over smaller "pure-play" operators who can't obtain content nearly as cheaply.

"We start from a scaled content position, so we're uniquely positioned to offer this in the market," he said. 

Stankey also took time to outline the three IP-only DirecTV tiers.

DirecTV Now, he said, is a "rich bundle of content," not to be confused with a skinny bundle. "We think skinny bundles have a very small application in the market over time," he explained. "My skinny bundle is very different than my wife's. This is about getting to a middle road, where we're not investing heavily in CPE, and we don't have the same dynamics [as a traditional satellite service] in terms of credit risks."

DirecTV Mobile, meanwhile, "is taking it down a step further," Stankey said. "It's not appointment viewing — it's on-demand viewing. It's for [users] who have 20 minutes to kill at the airport, and they want to see the latest episode of a current season show."

Finally, DirecTV Preview is a "recognition that we need to be outside the paywall," Stankey added. "It's a place where people can sample and try out our products, and see if they want to move into the pay-TV ecosystem."

All three products, Stankey said, are aimed at "attacking portions of the market we traditionally haven't been able to get at."

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