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AT&T to Pour $500 Million Into Their Own Netflix Clone

On the same day that Netflix was calling out AT&T's U-Verse network for poor streaming performance, AT&T announced that it was investing in an over the top streaming video service of its own. According to AT&T's press release, AT&T and the Chernin Group will contributing $500 million toward a new venture that will "acquire, invest in and launch over-the-top (OTT) video services.

"AT&T’s network resources bring enhanced opportunities for this new content alliance to create compelling offerings for consumers," proclaims the company. Like Verizon's joint venture with RedBox, AT&T obviously wants to have its own video streaming operation in play as video moves away from traditional coax networks.

AT&T's video streaming attempts have historically been "me too" affairs, ranging from a video portal that was effectively a Hulu clone to the U-Verse Screen Pack, which was touted as a "Netflix killer" but suffered from a limited catalog and is only available to U-Verse users for an additional $5 a month.

AT&T circulated a survey among U-Verse users last year polling interest in a "virtual MSO" that provided a smattering of content and channels "at a significantly lower price than traditional pay TV services."

Whether this new venture results in a quality, consumer friendly video platform is anything but clear. Verizon's streaming joint venture with RedBox was announced with great fanfare, but hasn't been a particularly disruptive presence because Verizon's afraid of cannibalizing their traditional TV subscribers. We've seen a similar problem wherein Hulu never seems to disrupt because its broadcast TV owners don't want it to.

Any AT&T-owned streaming video service would likely operate under the same constraints, unable to innovate in the way Netflix and Amazon have because there's no true interest in disruption. Offer too compelling of an over the top product at an exciting price, and you risk losing your traditional cable customers to the product.

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posthaste
join:2001-05-20
Champaign, IL

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posthaste

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Karl Made a Mistake

$500 billion is what AT&T spends on lobbying, in-house lawyers, and corporate PR (aka astroturfing).