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AT&T offers video-on-demand service to discourage cord cutting

AT&T has introduced a new service for U-Verse TV subscribers which gives them access to a video-on-demand library of movies for a monthly fee. Can it compete with Netflix or Amazon?
January 8, 2013

The discussion about cord cutting has been growing louder as more and more people consider ditching expensive cable packages and replacing them with video-on-demand services offering libraries of content. The popularity of Netflix, Amazon Instant Video, Redbox Instant, and Hulu has got some traditional providers worried. AT&T is the latest company to introduce some kind of video-on-demand service for existing customers, possibly to try and combat the lure of Netflix and the gang.

Announced at CES in Las Vegas yesterday, the new service is called the U-Verse Screen Pack and it will cost $5 per month. It’s only available to existing U-Verse TV subscribers and currently it offers a library of 1,500 movies which can be viewed on TVs, laptops, tablets or smartphones. AT&T is offering a free preview week which ends on January 13th.

The service is focused on movies, unlike Netflix which also offers TV shows, and AT&T has promised that more titles will be added as they strike deals with studios. Currently 1,500 movies puts it a long way behind the competition.

When you consider the economic imperative for many people to consider cutting the cord in the first place, you have to wonder why AT&T is charging extra for this. Subscribers to U-Verse are already paying monthly fees, charging them an extra $5 per month for a service that sounds far inferior to the video-on-demand competition doesn’t seem like a sure fire way of retaining customers. What do you think?