AT&T Hopes A Confusing Rebranding Will Help Its Muddled Video Plans Make Sense

from the good-luck-with--that dept

Despite spending more than $150 billion on mergers intended to help it dominate the video space, AT&T’s video ambitions are falling flat. The company just posted a loss of more than 778,000 “traditional” video subscribers last quarter (satellite TV, IPTV), but also lost another 168,000 subscribers at its DirecTV Now streaming service. The reason? The company’s acquisitions of DirecTV ($67 billion) and Time Warner ($86 billion) saddled it with so much debt, the company was forced to raise rates. This, in turn, helped drive AT&T’s customers to the exits.

Despite its voracious appetite for M&A, it’s not entirely clear the company knows what to do from here. The same week it announced record subscriber losses, AT&T proclaimed it would be engaged in a rebranding that will kill off the DirecTV brand. AT&T’s DirecTV Now streaming video service will now be, quite creatively, named just AT&T TV Now:

“AT&T is eliminating the DirecTV Now brand name it uses for its struggling Internet-based TV service. DirecTV Now will become “AT&T TV Now” later this summer, AT&T announced today. DirecTV Now (the future “AT&T TV Now”) offers a bundle of linear TV channels, similar to traditional cable or satellite services, and AT&T said its core offering won’t be changed.”

The problem, as some were quick to point out, is that AT&T, Time Warner, and HBO all now offer video via an immensely confusing array of options. There’s HBO Go, HBO’s streaming service for those with cable. There’s HBO Now, HBO’s streaming service for those without cable. There’s AT&T’s Watch TV, which is a live, discounted bundle of 35 channels. There’s also AT&T TV, which is delivered over IPTV. Then there’s AT&T TV Now, which is a rebranded version of DirecTV Now, its on demand streaming option. There’s also HBO Max, AT&T’s new streaming platform slated for next year. Not confusing at all, right?

Both AT&T and Verizon desperately want to topple Google and Facebook in the video advertising space, but there remains little indication that lumbering, government-pampered monopolies have the flexibility to actually accomplish that goal. Verizon’s Go90 streaming video service, you’ll recall, was supposed to dominate the Millennial video space, but wound up being scrapped after nobody gave much of a damn.

It’s frankly hard for pampered monopolies to seriously compete because, with the exception of some tepid, non-price competition in wireless, actual hard-nosed competition is alien phrenology to them. As are innovation, disruption, and quick adaptation. Companies like AT&T and Verizon have spent thirty years responding to competition by lobbying government to make life hell for their competitors at every turn. And because giants like AT&T all but own numerous federal and state lawmakers, that’s routinely been pretty easy. That’s not going to work in a streaming space where actual competition is starting to explode.

In a sector where many traditional cable operators have only doubled down on the same dumb behavior that drives cord cutting in the first place, AT&T at least had the courage to offer its own streaming alternative. Many companies are so terrified of accelerating the cord cutting losses to traditional video revenue, they refuse to offering compelling, more flexible, and cheaper alternatives. AT&T deserves credit for taking risk, even if the path forward should have been fairly obvious.

That said, it’s not entirely clear AT&T knows what it’s doing. In addition to a scattered brand presence and endless price hikes, the company seems fixated on turning HBO from a boutique channel filled with popular, higher-quality risk taking, to a an outlet that craps out shorter form content en masse. This shift in focus to quantity over quality isn’t likely to help in the way AT&T execs seem to think it will. And while the death of net neutrality and AT&T’s domination of broadband will certainly help AT&T tilt the playing field here and there, even that may not be enough to keep AT&T relevant in the streaming wars to come.

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Companies: at&t, directv

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Comments on “AT&T Hopes A Confusing Rebranding Will Help Its Muddled Video Plans Make Sense”

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10 Comments
Anonymous Coward says:

AT&T also reduces competition by buy off small companys that might
provide competition ,
i most places in america there,s maybe 1 or 2 broadband providers .
It is not used to competing in the free market ,
its easier to lobby for laws that reduce competition rather than provide a fairly priced service to the consumer.
Comcast and disney will be launching streaming services at low prices .
.
Its hard to think of a worse name for a tv service than AT&T tv or
AT&T now .
For a lot of users netflix and free services like youtube and over the air tv provide
a good quality viewing experience at a low price .

Gary (profile) says:

Branded

I remember when my AT&T cell service was sold to Cingular, and re-branded. Then AT&T bought it back and re-bradneded it again with the deathstar logo.

Logos and branding is more important that service, quality and fair pricing. One of the marketing goals of having so many choices is to confuse consumers so much that they just give up and pick the highest priced package in the hope they will get the shows they want.

Thad (profile) says:

Re: Branded

I briefly had a job at Intel, back in the summer of ’15.

I remember there was a company blog post that went out announcing the company’s decision to change its logo and packaging, to try and shore up declining sales.

The comments were filled with workers politely but firmly pointing out that changing Intel’s packaging wasn’t going to have any kind of effect on its market position. This was before Ryzen, when Intel still effectively had a lock on the market that buys computer processors in boxes.

Changing your packaging isn’t going to get you any more of a market that you already completely own.

The real problem Intel was, and is, having is its failure to compete in the mobile space. You can’t market your way out of that. At least, not by marketing to end users.

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