Shoe on the other foot

When the cable companies decided to get into VoIP, they didn’t go into the marketplace touting the new technology they’d discovered and trying to attract new customers that way. Instead, they called it “digital phone service” and focused on its low cost, a long list of features and reliability.

The approach paid off. When it came to telephony, customers wanted a service that was reliable and cheaper, not any fancy new technology.

Now as AT&T is marketing video services, it isn’t selling IPTV, or even U-verse, the brand name of its IPTV service. Instead, AT&T is selling “advanced TV,” touting the digital video recording features and more that it can offer.

This approach makes sense, Dan York, executive vice president of content at AT&T, explained last week at NAB, because AT&T can hardly afford to do mass-scale advertising in markets when only 10% or less of the local residents hearing or seeing the ads will be able to get U-verse. By selling “advanced TV,” AT&T can identify consumers looking for a video option other than cable and sell them U-verse, if they are in the lucky minority, or a satellite TV service from DISH (in most areas) or DirecTV (in the former BellSouth turf) if they aren’t.

By the end of 2010, when AT&T will be passing 30 million homes with U-verse, that marketing strategy may change. But for now, it remains very focused, York said.

“We are doing a lot of direct marketing and door-to-door,” he commented during an NAB panel discussion.

Verizon is also finding its greatest success in selling FiOS is through door-to-door sales, according to Terry Denson, vice president, content strategy and acquisition, also speaking at NAB. And Verizon has been known to sell services from its satellite partner, DirecTV, when FiOS isn’t available.

The current legal spat between Time-Warner and Verizon stems from the cable company’s implication in its ads that Verizon TV service always comes with a satellite dish.

If cable companies are concerned enough about this marketing strategy to start attacking it, they probably should be. After all, it worked when cable wanted to take market share, and it could well work again.

E-mail me at cwilson3@telephonyonline.com.