AT&T has announced it’ll bring a live linear streaming Internet TV service to market in Q4 2016.
Dish Network is the pay TV pioneer; it launched the first streaming pay TV service last year, and has amassed around 600,000 subscribers, followed by Sony’s launch of PlayStation Vue, Verizon’s Go90 mobile-first service, and a handful of small streaming services from Comcast and other pay TV providers.
AT&T: responding to changing TV viewing habits
Here are five lessons we think AT&T should take to heart if it wants to regain cord-cutters, attract cord nevers, and offer a streaming TV product that’s actually successful.
1. Be truly multi-screen: the Internet TV service will need to be available on multiple devices, multiple screens, and should probably enable multiple simultaneous streams.
Dish Network’s Sling TV doesn’t currently offer subscribers the ability to stream to different devices simultaneously, and while that’s fine for one user household, it’s hard to justify buying two or more subscriptions for a single household, especially when other competing services, such as Netflix, allow for multiple streams and even multiple profiles within the same account. OTT services have distinct characteristics that make them very popular among consumers, and ubiquity on devices is one of those characteristics.
2. Have lots of on-demand content: Our main complaint against Sling TV when it first launched was the lack of on-demand content.
The world is moving away from linear programming schedules; viewers now prefer to keep up with their favorite series whenever it’s convenient to them, not according to a TV guide.
This trait is no more pronounced than among Millennials and Generation Z viewers, who grew up with the Internet. Any TV service targeting cord nevers or Millennials must have huge amounts of content available on-demand.
These viewers are their own programmers, they pick what they want to watch, whenever they feel like watching something. The EPG grid is completely foreign to them. On our estimation, this is one of the main reasons Sling TV hasn’t gained more traction among Millennial consumers.
3. Internet-savvy viewers want choice (ie do not replicate the traditional TV experience online): Rigid and over-sized pay TV bundles have lost favor with viewers who are now looking for less expensive, slimmer bundles that give them some degree of choice and control over what channels they pay to receive.
Dish’s Sling TV has wisely capitalized on this by offering genre packs that subscribers can add to the core offering for $5 more each per month.
This model has proved wildly popular in Europe – where Internet TV is more common – and for good reason.
Movie buffs might prefer to access premium pay TV movie channels over regional sports networks; or news junkies might want to add more news channels to their package; and parents like having children content that’s safe to let the kids watch. These genre packs not only offer customers more control over their home entertainment service, they also represent more incremental revenue streams for AT&T.
4. Web video, on-demand titles and live TV should all exist in the same interface: viewers, particularly Millennials, no longer differentiate between “television” and “Web” video. Viewers now care about the quality of the content over the platform it appears on, and Millennial viewers in particular are completely unattached to any sort of programming guide or schedule.
The Internet TV service should focus on recommendations over distinctions – meaning less clicks between live TV and on-demand catalogs, and more navigation based on the subscriber’s tastes and preferences.
5. Pricing will need to be closer to $20 per month than $100 per month: Take a hint from Sony’s PlayStation Vue service, which is the most expensive Internet TV service.
Pay TV prices won’t work online. The viewers AT&T is targeting with this service don’t want 400 channels for $150 per month, no matter how good of a deal that…
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