Verizon being squeezed from both ends

verizon-being-squeezedUp until about 10 years ago, Charter Communications was the only cable provider in my eastern Massachusetts town. We’ve been using their cable TV/Internet/phone service for many years, and it’s been pretty reliable.

However, we’ve found—as have many cable customers, apparently—that the price seems to keep creeping up.

Verizon then came to town offering the FIOS alternative. Once a year or so since the company arrived, a Verizon sales rep knocks on my door attempting to get me to switch to FIOS with fiber optics, a supposedly faster, better cable alternative.

Not-so-flattering things that I’d heard about Verizon’s customer service—as well as simple inertia—have kept me tied to Charter.

Yearning for change

As cable companies go, Charter is a pretty good one, but like all cable companies, it is tied to old technology, outdated equipment, and a dying business model.cable-rat-nest

Despite all efforts to reduce our monthly cable bill, which has been as high as $200, we can’t quite seem to ever get it below $160. The package includes Internet and phone, as well as cable TV, but it’s still a lot of money—almost $2000 a year.

We would so love to say goodbye to that monthly nut. Sure, we want entertainment, but we are forced to pay for way more than we want or use.

And the rat’s nest of equipment and cables needed to get it all to work seems to grow more, rather than less, complex.

Consumers are revolting. We’ve written in the past about the trend currently unfolding in the U.S. toward cutting the cord. We’ve also written about our desire for an Internet-based a la carte entertainment service, wherein we could pay for just what we use.

While there are Internet-based offerings such as Netflix, Amazon, Hulu, and others, they still have a long way to go.

Can cable TV adapt?

Clearly, the cable industry is trying to adapt its model in different ways to accommodate changing customer habits.

evolveFor example, Charter offers a mobile app to enable downloading of programs to mobile devices such as iPads, so customers can take their entertainment with them on trips or otherwise while on the go.

Most recently, Verizon announced last week that its FIOS service was offering personalized packages of TV programming that would cost less than typical cable TV plans.

Called the Custom HD service, Verizon will let customers choose one of seven genre-based channel packs: kids, pop culture, lifestyle, entertainment, news and info, sports, and sports plus.

Taking a look at the Verizon TV web page, it appears the only thing Verizon’s new offering has going for it is a lower price. It’s still cable TV. You still have to pay for a plethora of equipment plus the usual “taxes, RSN and other fees.”

Additionally, the introductory price of $54.99 a month is good only for the first year. You know what SOS stands for, and it’s not a call for help.

Verizon squeezed by its own content providers

To complicate matters, Verizon’s plan is now being called into question by its own content providers, and one even filed suit.disney_logo

A spokesman for the Disney company, which owns ESPN, among other channels, has come out and said that Verizon’s contract with Disney does not allow these new custom packages.

Both Fox and NBC have stated essentially the same thing.

And today, ESPN filed a lawsuit against Verizon for their unbundling plans.

Trouble in paradise? Seems so. This is all going to come out in the wash eventually, but the bigger question is do customers even care? I’m sure consumer apathy—and all the negativity from customers—has cable providers worried.

Combine all these factors: an aging customer base increasingly cutting the cord; a generation of millennials who have never paid for cable TV; and now push-back from its own content providers. Methinks things are looking dire for the cable industry.

Inertia changing to momentum

Right now, I still pay for cable TV. I’m gainfully employed and can afford it. And there is still that inertia thing. But that’s likely going to change in the not too distant future.

move-the-worldI’m watching more and more programming from Netflix streaming and iTunes, and eventually these and other streaming options are going to offer more than enough to satisfy my entertainment needs.

I may opt to pay sporadically for HBO Now and Showtime’s upcoming subscription service, but only when they have compelling programming on (for example, Game of Thrones and Homeland).

But even if inertia keeps me hanging onto those services, they offer enough recent movies and other shows to make the monthly $15 fees worth it. Well almost.

What’s the bottom line? I’m looking to pay a lot less than $2000 a year for television, and that’s going to be increasingly possible in the coming months.

One thought on “Verizon being squeezed from both ends

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