AT&T packs $40 skinny bundle targeting cord-cutters

Trying its hand at an emerging pay-TV industry strategy of hooking previously uninitiated customers with stripped-down programming packages, AT&T (NYSE: T) will soon bundle broadband service, a limited number of basic cable channels, HBO and--wait for it--Amazon Prime (NASDAQ: AMZN) for $40 a month.

The broadband tier is rated at 18 Mbps, but it's unclear as to what's in the basic channel bundle. For example, does the package include ESPN, which is a key enticement for Dish Network's (NASDAQ: DISH) upcoming $30-a-month over-the-top service?

There's also fine print involved, with the $40 a month rate serving as a loss leader that only lasts one year. The strategy, of course, is clear: Attract the "cord cutters" and "cord nevers" with a great programming value, then deliver them an upsell. 

Inclusion of HBO is a novel approach, with previously announced "skinny" bundles from Dish and Sony not including a premium cable network.

The addition of Amazon Prime, a service that sells for $99 a year a la carte and includes a subscription video on demand service along with free two-day shipping of Amazon store products, is also very unique.

Amazon PR staffers told Re/code's Peter Kafka that Amazon has previously bundled Prime into pay-TV packages, but neither he or FierceCable can recall seeing that.

For more:
- read this Re/code story
- read this Wired story

Related links:
AT&T plans to bundle DirecTV video with satellite delivered wireless broadband for rural customers
Analyst casts doubt on AT&T's professed bundling efficiencies
AT&T, Chernin move forward with Fullscreen buy
AT&T's Stankey: Company will end up spending more on content after DirecTV purchase


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