Consumers Aren't Gonna Pay a Lot for Telco TV

[qi:032] Telephone companies pushing television services will gain customers by offering lower prices than cable or satellite providers, according to a survey being presented today by Heavy Reading. The survey, which consisted of about 200 consumer interviews, found that price, more than special interactive features, will dictate which provider consumers turn to. That’s grim news for the telcos, which have been spending heavily to lay fiber and upgrade their networks so they can offer the triple play of voice, video and data in order to better compete with cable companies.

The pitch on the part of telcos is that consumers tired of boring TV delivered by their cable company could switch to a more interactive experience through, such as those offered by AT&T’s  U-verse service or FiOS TV or Verizon. And for the privilege of such an experience, they would pay more. Of course many of those features, such as alternate camera angles and personalized channels, haven’t yet been rolled out. In the meantime, cable companies are offering digital video recorders and interactive services such as Start Over as part of their digital cable packages.

In fact, a survey in September found that consumers weren’t even happy with the current pricing or service being provided by their cable companies — suggesting that undercutting cable companies while providing better service is the key to gaining their business. That being said, many of the consumers in the September survey said they’d be happy to switch to telco TV if the price was right. It looks like that for all the technical innovation, the promise of the triple-play bundle isn’t about service, but about the bargain. Carriers will have to find other ways to boost their bottom lines for the time being.

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