AT&T Makes Video-Streaming Splash
AT&T has joined the video-streaming fray, possibly part of a strategy to expand its influence beyond its U-verse base. Whether the move is one that will lead to profitability is still uncertain, however. "This is an entirely new world we are moving into," said telecom analyst Jeff Kagan, "and you don't know what services will be killer apps and which will not make it."
Jan 7, 2013 3:12 PM PT
AT&T on Monday announced a new service to compete with such video-on-demand offerings as Netflix, Hulu and Amazon Prime.
The service, called "U-verse Screen Pack," is aimed at its U-verse customers, offering unlimited access to AT&T's library of some 1,500 movies from a TV, computer or wireless device. The service will cost US$5 a month.
At that price point, it is competitive with, if not undercutting, its rivals. Late last year, Amazon began testing a new monthly option for its Prime video-streaming service at $7.99 per month. Netflix's streaming video service also clocks in at $7.99 per month.
Plugging a Hole
AT&T is plugging a hole in its product line up with this offering, said Mike Judd, program manager of consumer communication services at Frost & Sullivan.
This could be the beginning of AT&T extending the U-verse experience beyond its traditional customers.
"I see it as a logical move -- something they had to do," he told the E-Commerce Times.
Competitive Price vs. Content vs. Convenience
The price will be a winning factor with customers, Judd continued. The downside is that Screen Pack "probably won't have the same level of content as other competitors' offerings."
For a sizable number of customers, the convenience element will be the deciding factor, he noted.
"If you are a U-verse customer and have a Web-enabled TV, you are probably juggling several remotes," said Judd. "There is that convenience factor that would convince many people to get their movie content from AT&T."
The Changing Face of TV
The new offering will impact AT&T's U-verse customer base, of course, but it also speaks volumes about the future direction of television and consumers' demand for digital content, said Jeff Kagan, independent telecom analyst.
"Consumers now expect to not only be able to watch TV but also have access to a variety of other features enabled by broadband or wireless," he told the E-Commerce Times.
Service providers such as U-verse are jumping to meet this demand -- in some cases reacting defensively and in others taking the offensive.
"The industry recognizes this is an exciting new opportunity to carve out new market share," Kagan said.
The downside is that it's not clear how to leverage these opportunities.
"None of these executives have a clue about how the economics will work out. They will worry about profitability as the industry matures," Kagan said.
"This is an entirely new world we are moving into, and you don't know what services will be killer apps and which will not make it," he continued. "The industry will try a bunch of things, and some will work out -- others won't."
U-verse has been relatively quiet for the last year or two, Kagan said, despite being a serious competitor to the cable TV industry. Screen Pack "will let them leapfrog into a more advanced and profitable position."
Some Features Lacking
Screen Pack is a good answer to AT&T U-verse's limitations, but it is still lacking some functionality, Marc Price, CTO Americas of Openet told the E-Commerce Times.
"It doesn't provide a richer set of search and discovery functions," he pointed out. "Nor does it provide recommendations of what movies you might like to watch or a better way to discover content."
That said, it is a giant step in the right direction for the company, he added. "It gives subscribers more choice beyond the traditional cable lineup."
A U-verse spokesperson was not immediately available to provide further details.