With AT&T focusing on its purchase of DirecTV, it has decided to phase out its U-Verse service. Started in 2005, U-Verse was promoted as a faster alternative to cable as it offered DSL lines for both TV and broadband service. At its peak, AT&T U-Verse had 6.1 million subscribers in 2014, but it was never offered nationally plus it never marketed itself to the Northeast where Verizon FiOS has a huge foothold.
So with DirecTV, AT&T will stop making new U-Verse receivers, but for those customers who don’t want to get rid of the service, they can keep it, but it won’t encourage new customers to subscribe to U-Verse and will promote DirecTV instead.
According to Advertising Age, one reason that AT&T wants to focus on the satellite provider is that it’s programming costs are cheaper than U-Verse and it’s a national brand as opposed to U-Verse.
With DirecTV, AT&T gets a national TV offering and lower programming costs. DirecTV’s 20 million subscribers give the parent company greater leverage in negotiations with media companies at a time of rising programming fees. Content costs are about $17 a month higher for U-verse customers than for DirecTV subscribers, Chief Financial Officer John Stephens said at an investor conference in November.
So what does that mean for sports programming? If U-Verse customers want to switch to DirecTV (provided they live in an area that can pick up a satellite signal), they’ll get access to NFL Sunday Ticket which is not available to cable. But if they do decide to make the switch, they won’t have access to the Pac-12 Networks which is on U-Verse, but not on DirecTV. U-Verse customers did get DirecTV’s Audience Network which carries the Dan Patrick Show and the Rich Eisen Show plus Undeniable With Joe Buck. some assorted movies, reruns of Fox’s 24 series and previews of pay cable programming.
While AT&T will be negotiating contracts with the sports networks to be carried on both U-Verse and DirecTV, it will focus more on DirecTV. And any new sports network AT&T picks up may go exclusively to DirecTV rather than U-Verse. Plus by not having to distribute signals over its broadband cables, it can offer faster internet speeds.
AT&T eventually wants to bundle its internet, satellite and wireless phone services into one offering and U-Verse is apparently not part of that plan.