AT&T's New IPTV Service: Will It Keep Its Promise?

Both CNet and ZDNet covered today a story about AT&T’s new IPTV service: U-Verse, a large-scale Internet-based TV service which the company is expected to launch in 20 cities by the end of 2006. AT&T has been quietly testing and launching the service in Texas since the beginning of the year.

IPTV promises to improve the TV watching experience, but not all of its promised benefits are completely unique or new, as explained in my previous post, and consumers are not expected to switch from their cable and satellite TV overnight. To make things more challenging, AT&T is planning a “soft launch” of the service, with limited features. Although details of the offering have not been disclosed yet, the initial service offering will provide around 200 channels, video-on-demand, and an internal DVR: not much more than what is already being offered by cable providers.

So how can AT&T succeed in this initiative?

AT&T will need to focus on the following aspects:

1. Offer a comparable and appealing price offering – the service needs to be in the same price range of cable / satellite services, at least at the beginning when the U-Verse offerings will not be much different from other cable providers;
2. Conduct extensive consumer research to understand which market segments are more likely to adopt the service first, and which features they would value the most. This understanding will allow AT&T to tailor their service and their marketing communication initiatives around the key features that are beneficial to customers and that will truly differentiate U-Verse from currently available cable services;
3. Provide easy-to-understand and easy-to-use features (this will be key – at the end of the day, consumers will still want to watch TV, not figure out how to make a complicated piece of hardware work)
4. Invest in extensive consumer education (tell consumers in easy words why they should switch to this service)
5. Continue to monitor the market as it adopts the new service to incorporate feedback and valuable input and add improvements to the service (but don't rely on trial and error to do so – consumers are not very patient)