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AT&T Tests Data-Divulging Discounts for Digital Life

CHICAGO -- ITA Internet of Things Summit -- After spending the last few years analyzing what smart home services its customers care about -- and, more importantly, which they will pay for -- AT&T has discovered along the way that a desire for discounts often outweighs concerns over data privacy.

With AT&T Inc. (NYSE: T)'s Digital Life home security and automation platform, the customer owns the data, according to Stephan Vincent, executive director of strategy and development for AT&T-Digital Life. That is what sets Digital Life apart from other services from companies like Google (Nasdaq: GOOG) or Facebook .

"Truly free services come at the expense of sharing data and privacy," he said when asked about how it can compete with free options. "AT&T is very protective of customer data, and we don't share it with anyone else."

AT&T's Digital Life ROI Strategy
Vincent shared this chart breaking down what consumers are interested in and what they are willing to pay for, two sentiments that are not necessarily aligned. Security remains the most important and most lucrative opportunity.
Vincent shared this chart breaking down what consumers are interested in and what they are willing to pay for, two sentiments that are not necessarily aligned. Security remains the most important and most lucrative opportunity.

That said, the carrier has trialed allowing its customers to share their data with marketing partners on an opt-in basis in exchange for discounts on the service. The results have generally been positive, Vincent said, so "you may see those types of models overlaid as we go."

As it is now, AT&T offers home security as a baseline product, with the option to add bundles around energy, doors, camera or water. AT&T installs all of the devices and locks customers into a two-year contract. It starts to realize a meaningful return on investment in year three, Vincent said, when consumers opt to continue their service without the contract. (See Analysts Predict Smart Home Slow Down.)


For more on how the smart home is shaping up, visit the Internet of Things section here on Light Reading.


Digital Life is currently in 83 markets across the US and is in trials with international operators like Telefónica to offer the service abroad. (See AT&T Looks Ahead & Abroad for Digital Life and AT&T & Telefónica Extend Digital Life to Europe.)

It's also in the process of trailing voice control in the home, as well as adding more third-party vendors to its ecosystem to offer its customers more choices for devices like thermostats. With everything it does, Vincent said it's focused on three themes going forward -- energy, presence and personalization. (See AT&T Adds New Partners to Its Digital Life.)

"These form the three high-level themes about how the smart home evolves beyond the thermostat," he said.

[UPDATE: AT&T says there have been no data-sharing trials for Digital Life and that Vincent misspoke. AT&T does have such a program in place for GigaPower, but has no plans to do one for Digital Life.]

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

MordyK 11/17/2015 | 3:24:21 PM
Re: Shared... I would bet that the answer is yes, as this is their second product using this approach. In their competition with Google Fiber they have a no data use price and a discount equal to Google's service if data is monetized.
mendyk 11/17/2015 | 10:19:22 AM
Re: Shared... KBode probably has it right -- the pricing will actually reflect a surcharge for keeping your data off-limits, as opposed to a "discount" for sharing. Does this mean that people who set their smart thermostats to 64 degrees in the winter will get lots of "discount opportunities" from the Snuggie Store?
Sarah Thomas 11/17/2015 | 10:13:57 AM
Re: Shared... Which a lot of people would opt in for if money is involved!
KBode 11/17/2015 | 10:02:38 AM
Re: Shared... I think it makes sense, makes consumers generally more positive about advertising, and avoids a lot of the pitfalls in terms of placing the onus on the user to opt out. Will be very curious if this is something AT&T continues to experiment with....
mendyk 11/17/2015 | 9:59:21 AM
Re: Shared... Sounds like the digital equivalent of selling blood.
Sarah Thomas 11/17/2015 | 9:42:51 AM
Re: Shared... Yeahhhh. I had that same thought -- there are many examples of data sharing -- either on purpose or through cyberattacks -- I could've pointed out, but I'll give them the benefit of the doubt on Digital Life.

And, I agree that this is a smart model. Different people have very different thresholds on data sharing and privacy. Might as well let them decide on a strictly opt-in basis if they want to trade some info for discounts.
KBode 11/17/2015 | 8:23:08 AM
Shared... ""Truly free services come at the expense of sharing data and privacy," he said when asked about how it can compete with free options. "AT&T is very protective of customer data, and we don't share it with anyone else."

Well, except the NSA. :) And they also make their U-Verse users pay a $40 to $60 premium to opt out of their behavioral advertising tracking, so they probably shouldn't applaud themselves too much just yet.

Still, this is actually nice to see, more companies should offer a discount for users who opt in to services.
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