AT&T Announces its Seventh Video Service at a Time When Traditional TV is Bleeding Subscribers
Traditional TV services continue to bleed subscribers as consumers shift their entertainment budgets to video services delivered over the internet. In Q2, Comcast lost 224k subscribers, Charter lost 141k, and AT&T lost a total of 946k subs; 778k from traditional distribution platforms (DirecTV & U-verse) and another 168k from streaming service (DirecTV Now).
This puts AT&T at a total of 21.58 million traditional video subscribers (down 8.7% year over year) and 1.34 million DirecTV Now subscribers (down 25.9% year over year).
Hoping to combat its deflating subscriber numbers, AT&T is launching yet another streaming service. This is one called “AT&T TV” and its expected to begin trails in the third quarter.
For those keeping score, in addition to its new AT&T TV service, the company also operates the following video services; Watch TV, DirecTV Now, HBO Now, HBO Max, DirecTV, U-Verse. I’m intentionally leaving out HBO Go.
Product Strategy 101: Do NOT confuse the customer.
If you’re like me, you’re your family’s IT person and your job may get increasingly difficult. For example, my father has AT&T internet and cut the cord. For real cut the cord, not just cancelling DirecTV and sign up for Hulu with live TV, which is not cord cutting.
Relatively speaking, he’s a pretty savvy guy. Recently, he asked me via text message,
“What device do I need to get to watch CBS Sports HQ?”
Knowing he uses Roku, I texted back “Dad, CBS Sports HQ is a stream within the CBS Sports app on Roku”. Which, it sort of confusing in its own right, but I digress.
Dad: “Hey, is this an app I have to pay for? They want to charge?[sends screenshot of the CBS All Access registration screen]” No idea how he got there, but it happened. These are your potential customers by the way.
“Dad, that looks like CBS All Access. I’m watching it on Roku [sends picture]”
He eventually found it moments later, but this recent “cord cutter” was frustrated at a confusing experience and I don’t blame him a bit. Nobody said the “Streaming Wars” were not going to be confusing. Just last week, I mentioned that Nielsen believes that too many streaming choices will lead some viewers back to traditional TV.
But wait, there’s more (video services)
What happens if my dad decides to return to pay TV? How does a regular person know whether they should subscribe to Watch AT&T, AT&T TV, or DirecTV Now? What about HBO Max? U-Verse? What’s the future of DirecTV? Will that become rebranded as one of these other offerings or vice-versa?
When your family needs to hire a consultant to determine which what video services to subscribe to, there’s a problem.
When it comes to improving free trial conversions and increasing revenue for my clients, I cannot overemphasize removing friction along every step of the customer journey.
I’m sure AT&T is well aware of this, but sometimes you become too close to a situation and just need an outside perspective or validation.
With its 7 video services, not to mention the plans underneath each one, I believe AT&T may be creating a paradox of choice for its customers….and more importably, more friction.
Where I come from (Columbus, Ohio originally), we call that shooting yourself in the foot.
