AT&T is making a play for cord nevers those Millennials who are used to getting their video entertainment online sans a cable subscription with a package of basic U-verse TV, broadband, HBO and Amazon Prime, all for $40.
The package includes local TV stations only, a non-DVR receiver, up to 45 Mbps Internet service, HBO on Demand, HBO Go and Amazon Prime.
The limited offer isn’t available everywhere and the price is good for only one year, after which the price pops up to better than $70, not including the $99 annual tab for Amazon Prime. It also has an early-termination fee of up to $180 and $99 installation.
DSL Reports points out that the latest deal is an iteration of other low-cost packages aimed at attracting non-subscribers, but notes that it’s the first time U-verse has included the Amazon Prime Instant Video piece.
AT&T isn’t alone in offering an attractively priced entry-level video package; Comcast, Time Warner Cable, Verizon and other operators are struggling to find the right formula to attract Millennials and to keep their services, especially broadband, in homes they already have as customers.
But, almost all of those packages have an expiration date, a point at which the deals become far less alluring.
Does Dish have a better idea? Maybe
Dish Network is taking a different tack.
An executive I spoke with at IBC earlier this month said that the satellite operator’s rumored $30 basic service is getting ready to launch and asserted that the deal isn’t being positioned as an introduction to a more expensive package; the $30 price for the package will stay at $30.
That doesn’t mean that Dish won’t look to increase revenues by up-selling to more expensive deals, but that isn’t the focus, he said.
Instead of introductory pricing that evaporates and creates churn Dish will look to sell additional packages of content in small bites that generate additional revenue.
Dish, in offering a low-priced option that it intends to keep cheap, is taking a stab at breaking the relentless cycle of subscriber defections to the next best deal available from the competition.
Subscriber acquisitions costs (SAC) the upfront costs of getting new subscribers has been a huge thorn in the sides of operators, who constantly fight to reduce churn.
Dish may have found a way to reduce that churn. The question, of course, is whether they can sell a low-cost package that makes sense financially.
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