It is reported that CenturyLink is planning to launch an over-the-top video streaming service by the start of this year. Experts say that owing to the small market share of CenturyLink in the video market and the challenges of getting content, the opportunity could present an upside.
“We believe it will be more profitable for us and we can handle 17 channels versus 200 or 400 channels and trying to manage those costs and be competitive in that area,” CEO of CenturyLink Glen Post said in a recent meet. “We think over the top video is going to be a real positive for us and still drive the pull through.”
Over The Top Offerings
Experts say that the OTT video streaming service has much big potential to grow in the future. Statistics shows that more and more users are subscribing to OTT services than before, and the main reason for this is the high monthly bills that the users pay for traditional cable TV services.
A report from Digitalsmiths shows that about 35% of television users pay more than hundred dollars each month to their pay television service provider. The major players in the over the top video streaming market are Sling TV from Dish, Netflix, and PlayStation Vue from Sony. Besides that, AT&T and Verizon have also laid their foot on the video streaming mobile market with their DirecTV Now and Verizon Go90 services.
Meanwhile, CenturyLink has reported significant loss in their broadband customer base as well. The company has been concentrating on getting higher value bundle customers and they are not giving much importance to standalone broadband users. In their third quarter reporting, CenturyLink lost around 40,000 high-speed internet users, and they are currently serving six million broadband users across the country.
In the third quarter earnings conference call, CenturyLink management said that the fall in broadband users is because they have shifted their focus on high value customers and better credit quality customers subscribing to their bundled offers. CenturyLink officials said that bundled offer is very important as they provide a positive net present value (NPV) owing to lower churn. It seems that we need to wait until the next reporting to know if the strategies of CenturyLink are working as expected.