CenturyLink may replace their managed IPTV service, Prism TV, eventually with an OTT product, if they are able to get the rights to pull together a pay TV package that includes all the channels that are important from the customer point of view. CenturyLink CFO Stewart Ewing revealed their plans about the same at the UBS Global Media and Communications conference in New York last week.
Currently, CenturyLink is testing a skinny bundle OTT video service ahead of a commercial debut in early 2017, which will include local broadcast TV networks. Ewing said that CenturyLink does not have any plans to expand Prism TV service beyond the current market reach of the service.
The Q3 reports of CenturyLink showed that Prism TV had 318,000 subscribers, which is an increase of 7,000 subscribers from the previous quarter and an increase of 49,000 users from the previous year. Prism TV runs on Ericsson Mediaroom platform, and CenturyLink offers Prism TV in many of the markets in the US.
AT&T is also distancing them from U-Verse, which relies on the Mediaroom platform, as they are shifting users to DirecTV services. AT&T is looking for the technology platform that powers their DirecTV Now service as the foundation of their video future.
“Frankly, we believe that, over time, the over-the-top product might replace the Prism product,” Ewing said at the meet. He said that CenturyLink will continue to sell Prism TV, but they believe that they can eventually offer OTT product at a great price with channels that are popular among the users. “The Prism TV service could go away over time,” Ewing added, noting that they are hopeful to make some margin out of their OTT offering.
CenturyLink CFO also added that they expect to offer an app-powered OTT service while getting the bandwidth benefit. Ewing estimates that the OTT product will need 10 Mbps or above broadband internet connection, when compared to the 25 Mbps that is allocated for the Prism TV service. He also noted about a potential partnership with DirecTV Now service in the future. CenturyLink is already reselling the traditional DirecTV service.
CenturyLink “didn’t know that AT&T was developing [an OTT product], too,” Ewing said. “Otherwise we would just talk to them about potentially reselling theirs, and we may very well do that.” When asked about the ongoing interest of CenturyLink in video, he said, “What we’re really interested is in driving broadband growth.”