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It’s one thing that Netflix or Apple, corporations that benefit from the switch from cable-TV consumers to streaming, claim an end to classic media consumption. It’s another one when Verizon’s talking.
Verizon, owner of Fios, an Internet provider, landlines and organizational TV, this week announced an offer for some of its premium wireless consumers that includes Disney, Hulu and ESPN, with no additional fees, no promotional time. Package subscribers also get advantages from Apple Music, for six months or indefinitely, depending on the plan.
It is content similar to an eligible wireless plan that starts at $45 per month. The concept of grouping content with wireless technology is not new. Consumers of unlimited T-Mobile knowledge can now access Netflix and Quibi for free. The wireless service provider has also partnered with The Athletic and MLB online sports page. TV will provide one-year loose subscriptions. Both annual subscriptions charge $60 each. The company will offer HBO Max to release its most productive wireless consumers after reaching a deal with Time Warner two years ago.
All this “free” complementary content has primary implications for media and telecommunications companies. More dramatically, are we witnessing the formation of a new way to promote media, when wireless and cable service providers enter into exclusive agreements to deliver critical packages and consumers can decide to upload streaming to payment? And does this mean that the approach – the bundles of inflated wires – is it dead and never comes back?
The answer, Verizon says, is yes.
“The existing price chain in the media sector is not working. It’s broken,” Frank Boulben, senior vice president of marketing and products at Verizon Consumer Group, said in an interview with CNBC this week. “Content has a key role to play, but very different from what it was when we were a classic [multi-channel video programming distributor].”
This is an ambitious through a telecommunications executive. This would possibly also explain why Verizon made the decision not to buy a giant content company when Hans Vestberg took over the company about two years ago. Verizon sees his role as custodian of the visitor acquisition. He doesn’t want to have content to do this job. In addition, the evidence of your Fios Internet product is overwhelming for programmers who rely on classic pay TV association fees. More than a portion of all new Fios consumers decide to acquire high-speed Internet access without video options, Boulben said.
“We are successful in more consumers every day than any other brand,” Vestberg said in an interview with CNBC last month. “Then, of course, we can marry DisneyArray … we can marry Apple at exclusives on Apple Music, and still get the same kind of donations for customers, but with a completely different model.”
What you might not see Verizon do is load the transmission and recreate a new set,” Boulben said. First, Verizon would have to increase the value of its plans if it did, which is why classic pay TV had disruptions in the first place. Second, Verizon chose Disney and Apple’s offerings for an express reason. He thought corporations would be offering valuable and differentiated content and had entered exclusive offers of be. In other words, AT-T and T-Mobile may not be offering Apple Music or Disney with their wireless products. It’s a needle engine for Verizon, and there are few others like that, ” said Boulben.
Verizon has already taken small steps to deconstruct classic package offerings with its Fios product. Verizon offers so-called “Mix and Match” TV packages, where consumers can choose YouTube TV and packs of 125, 300, or 425 channels, adding an option in which after 60 days, Verizon gives you a plan based on what it saw. Each TV package is sold over the Internet and phone, so consumers know what they’re paying for.
The problem here is that there is an explanation for why packets, and that is that they help reduce the dropout rate. Consumer offers are also greater. The “Triple Play” offer of TELEVISION, Internet and phone was much more important to consumers than buying the products separately, even though consumers were not sure how much they paid for each service.
“I don’t think we’re going through to get back to the old organizational approach,” Boulben said.
Most likely, new packages will be created outside the dealer ecosystem. In other words, instead of Verizon, Comcast, or Charter providing consumers with linear network packages, content creators will be grouped together to get new streaming services at a discount.
We saw evidence of that earlier this week. Apple and ViacomCBS have announced a package in combination, giving consumers the option to purchase Apple TV: 99 according to the month, CBS All Access ($9.99 according to the month) and Showtime Anytime ($10.99 according to the month) in combination for $14.98 according to the month. after a seven-day loose test. It’s a big saving, more than 50%. The merit of ViacomCBS is to expand the penetration of your service and create subscribers. This is for advertising purposes and potentially to woo the National Football League, which will likely renew its rights agreements with media partners next year.
These incentive packages apply to all media corporations looking to increase their subscribers. They are especially desirable for corporations that expect the increase in the number of video streaming subscribers to be what increases inventory costs than short-term revenue. It’sArray … almost every single business. The end result may simply be newer and larger packages that are starting to look more and more like cable offerings.
However, those packets will be very different from the way cable agreements are negotiated, scenarios, personal agreements that are made based on the perceived cost of certain networks, skewed by linking one channels to another (such as ESPN) and requiring the distribution of all networks. or none. As Boulben said, there will be clarity about the value and cost of content that didn’t exist before.
This is good news for consumers and, in the short term, bad news for classic media companies.
As LightShed media analyst Rich Greenfield likes to say, #goodluckbundle.
Disclosure: Comcast is the parent company of NBCUniversal, cnBC.
Fix: This story has been updated to reflect the fact that 50% of Verizon’s Fios Internet consumers don’t sign up for a video plan.
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