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Verizon, AT&T’s DVR Offers Replay Satellite/Cable Strategy

Sep 10, 2008  •  Post A Comment

In a nod to the ever-shortening attention span of the American public, multichannel service operators have gone from pitching how many linear high-definition channels they can offer each household to crowing about how many HD programs that single household can digitally record at one time.
This week, AT&T and Verizon both said they would start offering digital video recorders to some subscribers to their respective U-verse and FiOS fiber-optic television services as they try to gain ground on larger satellite and cable companies who have begun offering similar services.
AT&T’s U-verse this week said it’s launching its Total Home DVR service, which allows customers to watch as many as two live HD programs and three recorded programs at the same time. The DVRs also store as many as 37 hours of high-definition programming or 133 hours of standard-definition content.
Meanwhile, Verizon said this week that new customers who sign up by Oct. 4 would gain access to FiOS will get a year’s free use of an HD DVR. Such customers, who usually would pay about $20 a month for the service, would be able to record three HD programs at their home while watching a fourth.
While the two fiber-optic services’ regional territories prevent them from competing with each other, the two telecommunications giants, who are trying to pull customers from satellite companies such as DirecTV and cable companies like Comcast, are echoing the strategy of those companies. Last week, DVR maker TiVo said it will make HD set-top DVRs for DirecTV’s broadband-enabled customers, starting as early as July. Comcast this year started offering TiVo set-top boxes to its New England-area customers, while Cox will start a similar promotion later this year.
Such offers from AT&T and Verizon may help their fiber-optic services gain U.S. customers. While it is expected cable companies’ market share will fall during the next decade and satellite TV demand will remain flat, telecommunications companies, whose market share was negligible last year, will account for about 11% of the market by 2017, according to research firm SNL Kagan.
Still, the most recent quarterly results from FiOS and U-verse were mixed. In July, AT&T said U-verse’s subscriber growth accelerated to 170,000 in the second quarter from 148,000 in the first quarter, giving it 549,000 customers. That same month, Verizon, which has about 1.4 million FiOS subscribers, said the service’s second-quarter subscriber growth slowed to 176,000 from 263,000 in the first quarter, a deceleration Sanford C. Bernstein analyst Craig Moffett referred to as “startling.”
(7:30 p.m.: Updated fourth paragraph to correct details of Verizon offer)

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