AT&T got some attention on Thursday when CEO Randall Stephenson revealed in courtroom testimony during the Time Warner antitrust trial that the cellular giant planned to roll out a $15 a month streaming service offering various cable channels. It would be the cheapest in a growing array of “skinny bundle” services offered by both newcomers like Hulu and older firms like Dish and AT&T (it has a higher priced one called DirecTV Now).
This new one is cheaper because it excludes sports, Stephenson said. Even so, at $15, it’s tough to see that AT&T can be making any money on it—particularly as it would be free for AT&T’s wireless subscribers who have unlimited data. Stephenson was trying to cast this as proof that the Time Warner deal would lead to innovation. But given the uneconomic nature of the offering, it’s not likely to be a long-lasting offer.
There’s a long tradition in cable—and wireless—of offering consumers low-cost offers and then trying to upsell them into something more expensive. This is the just the latest example of that—which hardly counts as innovation.