More coffin nails in cable's aging multi-channel model

One cable TV provider has a new, unique take on cord-cutting: give them Internet-driven TV on-demand.

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AT&T has pitched a cheap, $40 wired Internet and cable TV plan aimed squarely at cord cutters.

Cord cutters are those consumers who balk at coughing up large sums of money every month for swaths of channels they don’t watch. They watch a la carte via the Internet.

AT&T’s offering, good only for the first year, includes Internet, basic cable, HBO and Amazon Prime.

Amazon Prime

What’s interesting about the offer isn't the broadband Internet element along with stripped-down cable and HBO, which other ISPs also offer. What’s revolutionary is the addition of Amazon Prime.

Amazon Prime is the usually $99 offer for one year of guaranteed two-day shipping on Amazon purchases that comes with access to free Kindle books and free music, plus, with a pause for drum roll, unlimited movies and TV shows.

It’s the unlimited 40,000 movies and TV shows that might check the cord-cutter's "I want" box.

AT&T's reasoning

I don’t doubt the marketers sitting in AT&T Towers have gleefully packed this offering, because as any serious TV watcher knows, Amazon's Instant Video downloaded television is better than streaming Netflix. The stuff is often newer.

However, there's a slight problem, and that is that while Amazon’s Instant Video is superb, Amazon Prime Instant Video isn't.

I’ve found that often, if there’s a specific, recent television show or series that I want to catch up on, I’ve got to buy it or rent it from Amazon anyway (it’s often not eligible for the Amazon Prime Instant Video) the service AT&T is proffering.


You want nice guy/serial killer Dexter's eight seasons in HD? It’s going to cost you $34.99 per season, whether you have Prime or not. Same with political thriller Homeland. Its third season will cost you $29.99. You’ll have to add that to AT&T’s subscription costs.

Why the extra costs?

To be fair to both Netflix and Amazon, one of the problems they've got to contend with is that the studios have signed away rights to movies and television for yonks into the future.

When you add in theatrical releases, DVD promises, broadcasting, lunar rights, and so on, all with agreed exclusive time-frames, we should feel lucky we’re getting to see this stuff at all without buying movie tickets or re-mortgaging for a 100-channel cable package. Lunar rights was a joke, by the way.

The proposition

But, niggling aside, this $40 promo is an interesting proposition. Notably HBO Go, the HBO mobile app is also included—a good thing for nomadic millennials.

Negatives include nickel and diming over the number of receivers included—only one, and that the price doubles after the first year.

Acceding to TV-over-Internet

But the big deal is that a cable operator is acceding to downloadable programming in such a visible way. Cable operators have used the Internet to deliver OTT, or Over-The-Top downloaded, and catch-up programming before, but it’s been in the background.

What’s going on

Huff Post Tech, in its coverage of this story, originally from DSL reports, makes the point that according to Experian Marketing Services, about a quarter of people between the ages of 18 and 34 who subscribe to Hulu or Netflix don't pay for television at all. They are the people who advertisers want to reach.

In other words, as many of us are TV fanatics who have the affront, and audacity, to choose to select our own programming—rather than have it thrust upon us by programmers in ivory towers—have been saying for years: The cable box is on the way out.

And this is just one more nail in the coffin.

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