U-Verse Hits the Road

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Bringing it to the streets. Or taking it to the streets? That's been the chief strategy deployed thus far by AT&T in introducing its U-verse TV IPTV service to its initial target markets.

Like its cable predecessors, the telephone company has learned that product demos -- preferably in consumer homes -- are the way to drive sales to new customers.

Local-level marketing has included neighborhood-by-neighborhood block parties, AT&T senior vice president of programming Amy Friedlander-Hoffman said. Face painters were hired to attract families.

When possible, the company convinced current customers to host parties for friends and neighbors, at which the U-verse product was wired in for viewing alongside the local cable company's digital product. In its launch market of San Antonio, for example, the side-by-side comparisons were made against Time Warner Cable.

AT&T also hit the streets with mobile units, equipped with a pair of mock living rooms and four plasma-TV screens. Those trailers were air-conditioned, providing an extra lure for potential consumers as the demo units were placed at summer and fall community events in warm markets like Houston.

Ice-cream trucks were also tricked out as promotional vehicles, cruising the streets in areas where the service was launched and giving away promotional brochures along with frozen treats.

All of those tactics and more helped the company to attract 3,000 customers, or 10% of the homes marketed in San Antonio, by the end of the third quarter of 2006. The telco later announced that the total was unchanged at the end of the fourth quarter.

The U-verse service is now in 11 markets: Muncie, Indianapolis and Bloomington, Ind.; Stamford, Hartford and New Haven, Conn.; San Jose and parts of San Francisco, Oakland and Fremont, Calif.; and the original two Texas locations.

Early adoption is coming from tech-savvy customers, according to Friedlander-Hoffman. Anecdotal feedback from these customers, she noted, indicates that they are subscribing because they are impressed by a service that adds picture-in-picture functionality to TV sets not outfitted with that feature, and by its multi-recording application, which allows a viewer to record up to five different channels simultaneously.

AT&T is looking for programming improvements, such as a better search technology that will help viewers to find relevant content and more local fare. To that end, Friedlander-Hoffman said AT&T is talking with local producers in ethnic communities, such as Polish program producers in Chicago, as well as colleges and sports teams seeking production deals for local or regional content.

AT&T is also eyeing another staple pay TV revenue stream: advertising. Friedlander-Hoffman said the telco plans to get into the business, but not until it can offer a multiplatform play to marketers.

“That way we can really differentiate,” she added. “Our ability to connect all of those users [television, Internet, telephone] will set us apart.” She could offer no start date on the advertising initiative.

The company remains on track to pass 19 million “living units” by the end of 2008 as part of its initial buildout, according to Fleishman-Hillard.

In other U-Verse TV news, AT&T and A&E Television Networks announced a multiyear carriage agreement Tuesday under which U-verse TV will include AETN’s linear and video-on-demand programming.

Under the agreement, AT&T will carry all eight of the programmer’s linear channels: A&E Network, A&E Network in HD, The History Channel, The History Channel en Español, The Biography Channel, History Channel International, Crime & Investigation Network and Military History Channel.

In addition, the companies announced that U-verse’s VOD service will feature several hours of AETN’s VOD programming each month, such as Dog the Bounty Hunter and Intervention from A&E and Digging for the Truth and Dogfights from History.

AT&T has already advertised the availability of all eight AETN channels in its initial markets.

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