New York – AT&T Inc. plans to launch in July its long-anticipated television service that will combine satellite TV from EchoStar Communications Corp. with videos and movies from the Internet, according to people familiar with the new offering.
Douglas County-based EchoStar is the nation’s second-largest satellite-TV provider, with 12.3 million customers.
The AT&T service, named Homezone, will allow subscribers to download hundreds of movies from the website Movielink for a fee and view them on a TV set; they also will be able to watch EchoStar’s standard Dish Network offerings.
The phone giant hopes to eventually make thousands of TV programs, movies and other video content available from the Internet. Homezone is a key component of AT&T’s plan to catch up to cable companies in the race to offer consumers the most attractive package of TV, phone and high-speed Internet services.
In another important part of that strategy, AT&T also plans to deliver television and on-demand movies over upgraded telephone wires in numerous cities starting later this year. AT&T laid out a very aggressive schedule to roll out this new technology but is late in hitting that timetable.
AT&T has to hustle because cable operators already are offering telephone service on a massive scale, luring away hundreds of thousands of customers each quarter from phone companies.
EchoStar declined to comment on its Homezone plans.
“Homezone also underscores the company’s strategy to expand its video-services portfolio,” AT&T spokeswoman Amanda Ray said in a written statement.
Analysts say Homezone will help AT&T establish a beachhead in the TV business, but they question whether it will be able to gain much market share, especially in the short run. Its content lineup still falls far short of the video-on-demand offerings of cable operators such as Comcast Corp. and Time Warner Inc., they note. Also, some viewers may be turned off by the time it will take to download the content, delays that cable companies don’t have.
“We are an instant, on-demand nation. Anything beyond that starts causing problems and will be a competitive disadvantage,” said Jimmy Schaeffler, senior multichannel-TV analyst for the Carmel Group. “It’s a short-term solution (for AT&T). In two years, AT&T will come back and say they can do this without EchoStar.”
Denver Post staff writer Kimberly S. Johnson contributed this report.
