Citibank Extends Online Business
27 December 2009Citibank is readying an online service that uses entertainment to expand its role in electronic commerce.
The finance giant is negotiating with content publishers and access providers to assemble a packaged online service aimed at Citibank customers, according to industry executives familiar with Citibank’s plans.
The service, still under development, could be rolled out as early as July, the executives said.
Under consideration are pricing plans in which Citibank would subsidize accounts offered to its customers, giving them high speed Digital Subscriber Line services at rates discounted from the emerging industry average of $40 monthly for high speed access.
The online offering would rep resent a new vehicle for Citibank to expand its reach in electronic commerce and could provide a venue for promoting its e-Citi initiative, aiming to enhance authentication technology underlying Web transactions.
The launch would go a long way toward explaining the institution’s hiring of veteran online content executive Josh Grotstein to head its consumer online efforts, last year.
Grotstein, who had led content and programming most recently at Prodigy and previously had worked for the interactive unit of the NBC television network, is no stranger to the idea of corporations selling Internet access to their customers.
The new Citibank approach mimics a marketing strategy Prodigy used during Grotstein’s tenure at the online service. Prodigy in 1997 pitched itself as a provider of out sourced Internet access services to corporations that wanted to offer Web access to customers under their own brand name. The idea was for companies to use the access offerings as affinity programs designed to build customer loyalty.
The Prodigy (www.prodigy.com) program, however, never really gained traction in the market a failure that could be blamed at least partially on the company’s uncertain ownership structure at the time.
The Citibank service, as a result, would represent one of the most aggressive corporate moves to date in using online offerings as a customer retention tool a key concern for a corporation with a stated mission of growing its worldwide client base tenfold from current levels to 1 billion customers by the year 2010.
Offering the packaged online service under the Citibank brand name would represent a significant expansion of Citibank’s consumer oriented online initiatives. Currently, its online presence consists of online distribution partnerships with Web portals, such as Netscape Communications’ Netcenter service.
Other financial institutions have taken their own steps to offer customized Web content. Discover Card, for instance, last year teamed up with Planet Direct to develop a customized portal service for its cardholders.
The Citibank (www.citibank.com) effort, however, appears to reach much further by essentially assembling the disparate pieces needed to create an entertainment oriented online service designed for the broadband era. Companies in talks with Citibank range from video content supplier SimplyTV to high speed access provider NorthPoint Communications, according to industry executives familiar with the talks. Executives at the companies could not be reached for comment on the negotiations.
Citibank spokeswoman Nina Das declined to comment on questions regarding Citibank’s efforts to assemble its own packaged online service.
“It’s something that’s way too early to talk about,” Das said. “It just compromises our competitive position to talk about it ahead of time.”