Size Matters: AT&T Bows Mini-Bundle Subscription23 Sep, 2014 By: Erik Gruenwedel
Streamlined multichannel video distribution offer includes select TV channels, broadband, HBO and Amazon Prime Instant Video
Next to TV Everywhere, multichannel video distributors such as cable, satellite and telecom grapple with how to appeal to a growing market segment that eschews the traditional bundled channel subscription TV package.
AT&T has now become the first major player to offer a streamlined bundle that includes high-speed Internet, select TV channels and HBO (no ESPN) for $39.99. The telecom operator is also including a free year of Amazon Prime membership, which features access to Amazon Prime Instant Video, with the 12-month contract deal (which ends Dec. 31).
Notably in the fine print, AT&T charges a $99 installation fee, an early termination fee of $180, and standard rates after the initial year unless canceled by the subscriber.
With conventional subscription TV packages averaging more than $100 a month, excluding Internet, the AT&T offer marks a major milestone in the MVPD ecosystem — a strategy aimed at luring Millennials, cord-cutters and cord-nevers.
Dish Network in the fourth quarter is set to launch its own mini-bundled packages, which appear to be focused on over-the-top video and will include The Disney Channel, among other Disney programming. The satellite operator and Disney hammered out a groundbreaking OTT agreement as part of retransmission TV deal.
At a recent financial confab, CBS COO Joseph Ianniello said there was nothing in its pay-TV contracts that would restrict the media company from Showtime Networks going straight to the consumer via OTT.
“That’s where the consumers are. We have to evolve as a business and be where the consumers what us to be,” Ianniello told Nomura’s Digital Media confab.
Time Warner, while traditionally hesitant to include the coveted HBO network in any mini-bundle, has softened a bit as CEO Jeff Bewkes realizes shifting market dynamics undermine a hardline approach toward OTT, Netflix and Amazon Prime Instant Video, among others.
Barclays analyst Kannan Venkateshwa believes Time Warner sub-contracting HBO to third-party standalone broadband services could generate $600 million in incremental revenue annually.