Verizon is revamping the way it sells TV and broadband internet service, in an attempt to make it easier for customers to get only what they want.
Rather than push “bundles” that combine TV, broadband and phone service, Verizon has introduced a new “Mix and Match” plan with individual broadband service starting at $39.99 and pay-TV programming at $50. Customers don’t need to agree to a contract to keep the service for a year or more.
The move is seen as a response to cord cutters and customers becoming used to subscribing and dropping streaming services without worrying about long-term contracts, which for pay TV typically can be for two years.
Social media mixup: False images and facts are being shared on the internet following Iran attacks
CES 2020: At CES, of course there’s bigger TVs, but also smart trash cans and talking makeup mirrors
“Customers have been loud and clear about their frustrations with cable, and we’ve listened,” says Frank Boulben, Verizon’s senior vice president of consumer marketing and products, in an announcement Thursday. “As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency.”
Another concern of customers: extra fees and surcharges that come on top of services, says Boulben. Verizon’s announcement says its new “pricing transparency” means “No extra fees. No annual contracts. No surprises.”
Entry-level prices include a $39.99 broadband service for 100 Megabits per second connectivity and a $50 TV package with more than 125 channels including five favorites (you choose) and local networks (each plan includes $15 monthly for a router, if required).
Not all industry observers consider Verizon’s action as a major move. “This sure sounds like a bundle to me,” said Phil Swann, who runs the TV Answer Man website.
If you are a TV customer, “you still have to buy a bundle,” Swann said. “You choose 5 channels and it becomes part of a bundle you buy. It’s just a slick way to sell the bundle.”
Beyond the $50 entry-level “Your Fios” TV package, the $70 “More Fios TV” package has 300+ channels, and $90 “Most Fios TV” has 425+ channels.
Faster broadband packages: 300 Mbps broadband ($59.99 monthly) and Gigabit broadband (500 Mbps or 940Mbps, $79.99).
It’s uncertain whether Verizon’s move will have anywhere near the impact T-Mobile’s no-contract and discounted service strategy has had on the wireless industry, says Eric Haggstrom, a forecast analyst with eMarketer.
“This is super interesting,” he said. “They are cloaking (this) in a very pro-consumer focus, which I think it is if you want to cut the cord, that’s fantastic and they are making it easier to do so. But at the same time this would help out their bottom line.
Like many other providers of pay TV and broadband service, Verizon has seen a decline in TV subscriptions as broadband subscriptions rise. Verizon, which has Fios available in nine states and the District of Columbia in the Northeast and MidAtlantic, had 4.2 million Fios Video customers (down 5%), at the end of September 2019, and 5.9 internet customers (up 2.7%).
Nationally, pay TV homes are expected to decline from 86.5 million in 2019 to 79.4 million in 2021, eMarketer estimates.
Cord-cutting homes are expected to increase from 46 million in 2019 to 61.3 million in 2021, eMarketer estimates. And cord-nevers are expected to increase from 31.9 million in 2019 to 35.5 million in 2020.
Smaller providers have been pushing broadband over pay TV – because programming costs cut into providers’ margins – but Haggstrom questions whether larger providers such as Comcast and Charter would do as Verizon is doing.
Since Verizon is often not the only broadband provider in many of the areas its available, “this could be a way to steal people as well,” he said.
Existing Fios customers who are currently in a contract can switch to Mix & Match on Fios pricing without an early termination fee, Verizon says. Or they can keep their current plan when it expires.
Customers can add a home phone to any plan for $20.
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
Read or Share this story: https://www.usatoday.com/story/tech/2020/01/09/verizon-makes-cord-cutting-changing-tv-packages-easier-customers/4419058002/