Windstream has expanded its relationship with AT&T to offer DirecTV satellite and DirecTV Now streaming across its entire service area to scale its video business and grow broadband subscribers.
The DirecTV product offerings will complement Windstream’s Kinetic broadband service, and play into the mobile nature of customers in that they'll be able to watch the DirecTV Now content in their home TV room or outside of the house.
For consumers, the service feel will be the same as the telco will deliver the DirecTV Now service under its Kinetic brand, which it created to house its broadband and entertainment offerings.
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Jeff Small, president of Windstream’s consumer and small business segment, said in a release that “this fits perfectly with our digital entertainment strategy.”
This latest expansion plan builds off an agreement Windstream made with AT&T in November. At that time, Windstream said that offering the AT&T product allows it to quickly scale its video platform while transforming itself from “a phone and Internet provider to a premium broadband and entertainment provider.”
While Windstream could have built its own online video platform for its broadband base, partnering with AT&T allows it to immediately scale across its well-established broadband customer base.
Now that it will be offered across its entire broadband footprint, a key driver Windstream will likely want to accentuate with this platform is its relationship with existing and new broadband subscribers. This will be important as the service provider looks to monetize the broadband investments it made via its Project Excel program.
As of the end of the third quarter, Windstream said that 54% its ILEC footprint could get speeds of 25 Mbps or greater. Windstream will likely focus a lot of its attention on these markets and others that it is upgrading to get higher speeds.
Windstream’s pact with AT&T could also be a sign of two other trends all ILECs are facing: the challenge of delivering a successful video business while turning broadband losses into broadband gains.
Unlike traditional cable operators like Comcast or Charter, which have greater buying power for video content, insurgent players like Windstream don’t have the same luxury. The service provider has rolled out its IPTV service in a handful of markets, but it has not indicated if it is turning off that program.
At the same time, Windstream will use the new online video and expanded satellite offering, particularly in areas where it does not offer IPTV, to offer more broadband service bundles. Service providers that offer bundles have been able to reduce customer churn and it’s likely this agreement could help the provider achieve that goal.
Windstream has not released the date of its fourth-quarter earnings yet, but in the third quarter, the service narrowed its broadband losses to about 8,400 customers, an improvement from the 22,000 the telco lost during the second quarter. Windstream attributed the broadband subscriber improvement to the promotional response it made to Charter Communications, its main cable competitor.