AT&T and Verizon Plot Different Strategies to Develop Video Business

Investors will get fresh insight into old telecommunication’s new media strategies when Verizon and AT&T report quarterly results. The two companies have long resembled each other but they are on different paths to find growth in the video business. AT&T made a bet on television with its $49 billion purchase of DirecTV in July that vaulted it to become the largest pay-TV company in the U.S. Verizon is building out a mobile video service, costing at least a few hundred million dollars, called go90 to target millennials. While AT&T pursues a satellite-based business, Verizon is sticking to its knitting by focusing on wireless.

Chief Executive Lowell McAdam has ruled out an AT&T-like strategy saying the company isn’t interested in buying the television business of DirecTV’s rival Dish Network. Instead, Verizon recently launched its own stand-alone wireless video service -- which was preceded by a number of deals including the $4.4 billion acquisition of AOL. Wall Street is eager to hear any adoption and usage details, along with plans to get more content on the app when Verizon reports its third-quarter results on Oct 20. “For the first time we are seeing a divergence in strategy,” says Barclays analyst Amir Rozwadowski. Wall Street, he says, is still learning about their tactics and the companies’ relevant milestones along the way. “We are trying to distill what is success,” he says. Both strategies have been hit with questions on whether the hulking telecom companies possess the nimbleness needed to navigate rapidly shifting video-consumption habits.