AT&T Revamps Digital Tiers
K.C. Neel
Rejiggering digital tiers is de rigueur these days, and AT&T Broadband, the granddaddy of digital deployment, is the latest MSO to revamp its digital operations in an effort to appeal to more customers.
AT&T has created several new digital packages, the first step in offering the uniform tiers throughout AT&T Broadband’s footprint. The packages include four levels of service – bronze, silver, gold and platinum – each with its own price point. All the tiers have a digital basic package of channels, pay-per-view, digital music, an onscreen guide, at least one digital set-top and remote control unit. The tiers run from $40 to $80 each, which includes the cost of analog basic and expanded basic packages.
In some upgraded markets, the MSO also will offer customers three special interest bonus categories: Movies and Music, Sports and Information, and Family and Variety. The specialty tiers can be purchased a la carte for $5.99 each.
It’ll take about a year to get the packages totally uniform across the country, says SVP-marketing Doug Seserman. The program also will take some coordination as customer service reps and systems become educated about the new tiers.
The idea is to simplify and streamline the product sales process, Seserman says. By creating uniform tiers of digital service, AT&T can establish national sales campaigns that will be more efficient and cost-effective.
The strategy also should be easier for customers to understand.
“We found that the a la carte strategy of selling services was confusing to customers,” he says. “This is easier for them to understand. It’s similar to the McDonald’s Value Meal strategy. A No. 1 is always a No. 1, and even if the price varies a bit depending on where you’re buying the meal, the name and content will always be consistent.”
“The pricing structure for the tiers also is designed to “stimulate a higher buy level by offering superior value to customers who choose additional product offerings,” Seserman says.
AT&T will continue to sell its analog service, but most marketing efforts will be designed to encourage customers to buy more products. The company also hopes the new tier structure will make it easier to bundle other products, such as interactive services, high-speed Internet access and digital phone service, as they are deployed in systems around the country.
“The ability to deliver a consistent menu of digital cable products nationwide advances AT&T Broadband’s plan to offer our customers one-stop shopping for a wide variety of services,” Seserman says.
With this new strategy, the company hopes to goose its sell-in penetration to around 50%, Seserman says. The sell-in rate is already at 40%, he says, but the goal is to reach a 50% penetration rate with digital services “in the not-too-distant future, and we think this strategy will get us there.”
AT&T Digital Cable “Value Packages”
Premium Movies Digital Content
Name w/o Bonus Cat.
Digital Bronze Encore & 3 plexes Elect. Prog. Guide
(Westerns, Mystery (EPG) PPV Access, DMX
& Love Stories) Digital Basic
Digital Silver Encore & 3 plexes EPG
plus PPV Access, DMX
STARZ! & plexes Digital Basic
and 1 Prem. & plexes
Digital Gold Encore and 3 plexes EPG
STARZ! & plexes PPV Access, DMX
plus Digital Basic
2 Prem. & plexes
Digital Platinum Encore & 3 plexes EPG
STARZ! & plexes PPV Access, DMX
plus Digital Basic
All Prem. & plexes
Digital Content Prize w/o
Name w/ Bonus Cat. Equipment Bonus cat.
Digital Bronze EPG 1 DCT $39.99
PPV Access, DMX
Digital Basic
Digital Silver EPG, PPV Access, DMX 1 DCT $49.99
Digital Basic
plus
Any 1 Bonus Cat.
Digital Gold EPG, PPV Access, DMX 2 DCTs $59.99
Digital Basic
plus
Any 2 Bonus Cat.
Digital Platinum EPG, PPV Access, DMX 2 DCTs $74.99
Digital Basic
plus
All Three Bonus Cat.
Prize
Name w/ Bonus Cat.
Digital Bronze $39.99
Digital Silver $54.99
Digital Gold $64.99
Digital Platinum $79.99
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