If the Mercedes-Benz brand name can be affixed to a sport-utility vehicle; if the Heinz brand name can appear on mustard, and if the Fritos brand name can be attached to chili, then why not use the AT&T brand name for cable television service?
AT&T Corp. is doing just that, having announced Tuesday an ambitious "rebranding" program to change the name of all products and services offered by Tele-Communications Inc., which AT&T acquired in March for $59.4 billion. Beginning Tuesday, the TCI Cable name will disappear, to be replaced by the moniker AT&T Cable Services, part of a unit known as AT&T Broadband and Internet Services, as well as the AT&T blue-globe logo.The change, which will take about six months to complete, has a budget of $30 million just for the tangible elements, including $8 million for new signs, $6 million for new employee uniforms and $6 million to repaint 15,500 service trucks.
The renaming will be extended beyond TCI Cable to include TCI Digital Cable, now AT&T Digital Cable, which provides features like an interactive on-screen guide and pay-per-view channels, and TCI@Home, now AT&T@Home, the high-speed Internet service provider.
In addition, part of the $150 million that TCI Cable has spent annually on marketing will be devoted to pitches informing more than 10 million customers of more than 600 local cable systems that whatever was once TCI will henceforth be rebranded with the familiar AT&T name.
"It's the largest brand transition in our company's history," Leo Hindery, president and chief executive of the broadband unit in Englewood, Colo., said in a conference call news conference.
The brand switcheroo is emblematic of efforts by AT&T to remake itself into a provider of myriad communications services in addition to its mainstay long-distance telephone operations. The goal is for AT&T to keep pace with the regional Bell operating companies like Bell Atlantic Corp. and SBC Communications Inc., which may offer long-distance services in a year.
With the takeover of TCI, and the pending purchase of Mediaone Group Inc. for $62.5 billion, AT&T, the nation's largest long-distance provider, will also become the largest cable TV company. AT&T is betting that the venerable AT&T brand name, freshened when the words "American Telephone & Telegraph" were eliminated in favor of the initials, will prove more appealing to consumers than the TCI or Mediaone brands.
"AT&T is obviously very well-known to consumers for the long-distance business," said Doug Seserman, senior vice president for marketing at AT&T Broadband and Internet Services. "And prior to the spinoff of Lucent Technologies, AT&T was branded on other products like telephones and computers."
Research among consumers found that "AT&T stands for trust, reliability, quality of service and good price value," he added. "And AT&T is also seen as the best brand to bring bundled services to homes, whether long distance, cable or Internet."
While the puissance of the AT&T name may benefit the TCI operations, the rebranding is risky, too, because it has the potential to tarnish the luster of the AT&T image.
"TCI is a typical cable company brand with a typical cable company image -- quite negative," said Clive Chajet, chairman of Chajet Consultancy LLC in New York, a brand- and corporate-identity consulting firm. "Those brands have never gained for themselves good reputations."
"AT&T is a classic example of a great brand name -- as good as it gets," he said. "That certainly would benefit any communication service with the convergence of components like television, telephones and high-speed access to the Internet."