Wednesday, April 19, 2006

AT&T Signs Akimbo, Reveals Plans For Web TV Service

AT&T Signs Akimbo, Reveals Plans For Web TV Service
San Jose Mercury News

AT&T yesterday announced that it will team with Akimbo to offer TV and movie downloads on its upcoming Web-based television service, set to be released this summer. Called HomeZone, the new AT&T service will launch in California and 12 other states by late summer. The telecom giant believes a Web-linked set top box is the media hub of the future, able to serve all of a customer's entertainment needs. This trend also underlines the massive shift the telecom industry is undergoing, as phone companies branch out into expanded Web services and, now, television.


AT&T's ambitions don't end there: according to the San Jose Mercury News, the company is also working on building a TV network called Lightspeed that will reach homes through the fiber-optic high-speed connections that it's currently spending billions on developing. HomeZone will include the following: TV from Dish Network, the company's joint-venture satellite TV project; DSL Internet service; downloadable movies from Movielink; TV and movie content from Akimbo; DVR functionality; and photo sharing and radio services from Yahoo.



AT&T to offer TV, movie downloads


By Jessie Seyfer

Mercury News

AT&T announced Tuesday that it will team up with San Mateo-based Akimbo to allow customers to download movies and shows over the Internet through AT&T's upcoming television service this summer.

The new AT&T service, called Homezone, is set to start in California and 12 other states by late summer.

The partnership brings the phone company a step closer to realizing its long-held desire to serve all of a customer's entertainment needs with one, Internet-linked set-top box. It also highlights the massive shift the telecommunications industry has undergone in recent years, as phone companies -- seeing their traditional phone-line sales diminish -- are branching out into television.

``The television services that we will be using in coming years will look much different than the service we used over the last 30 years,'' said industry analyst Jeff Kagan. ``Phone companies like AT&T are rushing to offer a competitive television service to allow them to compete with the cable television companies.''

AT&T's TV ambitions would encroach on some cable providers, which have dominated the pay-TV landscape for decades. On Tuesday, the leader of California's cable trade group derided AT&T's upcoming TV service as ``warmed-over DSL.''

But Homezone is not AT&T's first foray into television. The company has been offering satellite television service through a partnership with Dish Network since 2003, and is working on building a TV network called Lightspeed that will reach homes through fiber-optic connections over the next few years.

Homezone will combine several services:

• Live TV from the Dish Network

• DSL Internet service

• Major-studio movies downloadable from Movielink

• Older TV shows and movies downloadable from Akimbo

• Digital video recording

• Caller ID that appears on the television screen; and

• Photo-sharing and radio services from Yahoo.

The set-top box will be manufactured by San Jose-based 2Wire. AT&T did not release price information.

Akimbo brings its library of 10,000 television programs, from both mainstream and niche broadcasters, to the deal. The company, which has 41 employees and is privately funded, has been striking Internet content agreements with broadcasters since its 2004 inception.

Akimbo now features selected shows from the Discovery Channel, the History Channel, A&E and CNN, among other channels, and its niche offerings run the gamut from Bollywood films to karaoke to coverage of yachting events.

``Our goal is to make the archive and libraries of all these content partners available,'' said Akimbo Chief Executive Josh Goldman. ``It's not a replacement for TV. But if you want to watch your favorite Discovery Channel shows, that's the kind of thing we do.''

Akimbo is also working with Movielink to launch a TV and movie service separate from the Homezone service later in the year.

Market research suggests customers are still uncertain about whether they're willing to buy television service from their phone company, according to In-Stat. Only 5 percent of satellite or cable-TV subscribers polled by In-Stat said they would be willing to switch to a phone company's service. Fifty-two percent were undecided.

Dennis Mangers, president of the California Cable and Telecommunications Association, a cable trade group, said Homezone is a cobbled-together product designed to please not customers, but politicians who are trying to figure out whether TV service from a phone company should be regulated the same way as cable TV.

``We think Homezone is really a fraud,'' Mangers said. ``AT&T is trying to use Homezone as a product to escape its obligations.''

Cable companies are required to strike franchise agreements with every city where cable TV is sold. These agreements ensure that cable service is rolled out to poor neighborhoods, which don't bring as much business to cable providers, as well as wealthy ones, which are more likely to buy premium service, Mangers said.

In California, AT&T has been lobbying for statewide, rather than local, franchise agreements. Mangers said he believes AT&T is trying to get out of bringing quality service to poor communities by offering such customers Homezone instead of the higher-tech Lightspeed service.

Ken Tysell, AT&T's director of broadband applications, rejected those allegations, calling Homezone a quality product that would ``complement'' Lightspeed service.

``We'll offer Homezone everywhere Lightspeed is available, but Homezone will still be an excellent product for those where we haven't deployed it,'' he said.


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