Even as cable continues to shed viewers, IPTV is on an upswing, and AT&T is leveraging the advantage.
AT&T Inc. added 202,000 U-verse IPTV subs in the second quarter of 2011, bringing its total subscriber base to 5.3 million, or 21.5 percent of households served. Overall penetration for the next-generation television service stands at a respectable 25 percent in areas where it's been available for 36 months or more.
It continues to expand, as well: AT&T's U-verse deployment now reaches 29 million households, the company said. And, ARPU for U-verse triple-play customers stood at $170, up 8.3 percent year-over-year.
"We are seeing encouraging signs in wireline revenues," said Chairman and CEO Randall Stephenson said on the earnings call.
That success is in contrast to its cable rivals, which continue to suffer subscriber drain after seeing their first net subscriber losses in the third quarter of 2010. SNL Kagan calculates that at the end of 2010, 84.9 percent of occupied U.S. households subscribed to a multichannel package after eliminating the overlap of customers with multiple subscriptions, and IPTV and satellite continue to take an increasing market share of that. For instance, in its fiscal Q1 2011, reported in April, Comcast watched 39,000 subs walk away. Granted, that nearly cut in half its quarterly churn, year-over-year, but it's still not a preferred situation.
AT&T has continued to bolster its TV subscribers' user experience with perks, too. For instance, this week it announced that it has expanded its U-verse Mobile app from iPhone to Android devices, like the LG Thrive, LG Phoenix and Samsung Infuse 4G. It also now supports Windows Phone HTC HD7S. Downloads of 700 or so episodes from more than 100 TV series (networks include ABC, ABC Family, Discovery, Animal Planet, Disney Channel, ESPN, PBS, TLC, A&E, Bio, Cartoon Network, History, HGTV and Food Network) are available for U-verse TV subscribers. It's free for those with the U200 programming package or higher.
Also, a new U-verse Service & Support Tool app for iPhone, Android and BlackBerry offers self-support information and tools.
In general, IPTV is being seen as more forward-thinking than more traditional rivals – something that appears to be bearng fruit for AT&T, at least.
"Despite representing only a small portion of the total pay-TV market, IPTV services have had a significant impact on the market, forcing change across the entire ecosystem of video delivery," said Teresa Mastrangelo, directing analyst for video at Infonetics Research. "Although most IPTV operators continue to focus on customer acquisition by offering similar services as their competition, our latest IPTV survey confirms that IPTV services are entering their next phase as operators move beyond basic video offerings and begin providing consumers a highly personalized, highly integrated and portable on-demand viewing experience."
Multiscreen viewing, interactive applications and social networking are some of the services expected to be implemented over the next year, she said.
She added a warning, as well: "Although telco operators have led with innovation using IP video, satellite and cable operators are quickly leveraging broadband infrastructure to offer similar services. It will be important for IPTV operators to watch the competition closely to determine the direction of this market."
AT&T reported consolidated revenue of $31.5 billion, up more than $680 million, or 2.2 percent, year-over-year: AT&T's sixth consecutive quarter with a year-over-year revenue increases.
