December 5, 2020

AT&T Can’t Get Out Of Its Own Way As It Tries To ‘Disrupt’ Traditional TV

So we’ve noted a few times how giant telecom providers, as companies that have spent the better part of the last century as government-pampered monopolies, are adorable when they try (then inevitably fail) to innovate or compete. Verizon’s attempt to pivot from curmudgeonly old phone company to sexy new media darling, for example, has been a cavalcade of clumsy errors, missteps, and wasted money.

Much like that time Verizon tried to launch a “tech news” website that banned reporters from talking about net neutrality or government surveillance. Or the time it launched a Millennial-focused video streaming service nobody wanted to watch. Or the time it bought Tumblr (via Yahoo), banned porn, watched everybody leave, then had to sell the whole thing for a song.

AT&T hasn’t been much better as it has tried to “disrupt” the TV space. You’ll recall the company spent more than $150 billion to acquire Time Warner and DirecTV in a bid to dominate streaming and the online video advertising space. But the deals saddled AT&T with so much debt, it forced the company to raise rates despite rising competition, driving many of these customers to the exits. AT&T also launched a rotating array of video brands (more than 7!) that were so confusing, it even dumbfounded the company’s own customers.

Hoping to right the ship, AT&T this week launched another variant of its streaming video platform. Despite the fact that US consumers are clearly tired of proprietary cable boxes, sneaky fees, and quickly-ballooning promotional rates, AT&T apparently thought it would be a good idea to “compete” in the streaming space by launching a platform that incorporates all three:

“After 12 months paying the promotional rate, you pay the “prevailing rate,” which is double or close to double the first-year base rates before taxes and fees. Under current prices, the $49.99 promotional rate for the entry-level “Entertainment” package would rise to $93 per month in the second year. The promotional $54.99 rate for the Choice plan would double to $110; the $64.99 promotional rate for the Xtra package would rise to $124; and the $69.99 promotional rate for the Ultimate package would rise to $135.

Those prices do not include an $8.49 per-month fee for regional sports networks, which applies to the Choice, Xtra, and Ultimate packages.

It’s just astonishing to watch a company that has been bleeding subscribers by the boatload survey the market, carefully consider its next steps, then double down on all of the annoying shit that brought them to this point:

“Signing up for AT&T TV requires a two-year contract, with an early termination fee of $15 for each month left on the agreement at the time of cancellation. A $20 activation fee is waived if you order online…Each customer gets one Android-powered AT&T TV device and a Google Assistant-powered voice remote included in the plan, but you have to pay $120 for each additional TV box.

Telecom has long proven to be a pretty insular industry, with executives that tend to surround themselves with yes men who applaud every misstep. It’s reflected in the telecom policy analyst and think tank space, and the revolving door regulators that pass from telecom to governance. They literally can’t see how clumsy monopoly dominance has frustrated consumers, broken the market, and resulted in high prices, terrible service, and a cavalcade of bad ideas. As such, they literally can’t see the best way to appeal to these users either, because to them…there’s no problem that needs fixing.
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