Verizon shakes things up with ‘Mix and Match’ bundling options

US operator group Verizon has unveiled a ‘Mix and Match’ offering as part of its drive towards service bundling.

While the monthly bill does still look to be very expensive, this is the US after all, it is a fair and reasonable attempt to drive disruption in the pricing area of the telco industry. Without sounding too bold, it could even be considered by some to be innovative.

“Customers have been loud and clear about their frustrations with cable, and we’ve listened,” said Frank Boulben, SVP of Consumer Marketing and Products at Verizon. “As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency.

“Customers are tired of having to buy a bundle with services they don’t want to get the best rates, and then discover that those rates didn’t include extra fees and surcharges. We’re putting an end to the traditional bundle contract and putting customers in control.”

Telcos are generally not the most innovative, but this looks to be an excellent idea from Verizon. The final bill might end up looking expensive in comparison, but there are few other options which offer this element of flexibility. It does look to be a rare example of an initiative which is customer centric.

Another element which will certainly interest some customers is this is a pay monthly contract with no fixed term. Customers can leave the service by simply giving a months’ notice, while there are bonus features for current mobile subscribers.

Current mobile subscribers will benefit from an additional $20 discount on the services per month. In addition, the same subscribers will be given a $10 discount towards their next device purchase for each month they are a ‘Mix and Match’ customer.

Bundling together various services, or convergence, is proving to be an increasingly common strategy around the world, though perhaps Verizon has more to gain that many. The telco has a monstrously large subscription base for its mobile business, and while it has a presence in fixed broadband, the scale is no-where similar. Cross-selling and offering discounts to the 93 million mobile subscribers is one way to drive the business forward.

AT&T will launch Netflix competitor next year

In an SEC filing, AT&T has confirmed it will launch a new streaming service focused around HBO content to challenge the dominance of Netflix and Amazon Prime.

While details are relatively thin for the moment, though AT&T Entertainment boss John Stankey formally announced the new offering at the Vanity Fair New Establishment Summit in Los Angeles confirming the Time Warner assets would form the foundation of the streaming platform, with some third-party content building out the breadth and depth.

“On October 10, 2018, we announced plans to launch a new direct-to-consumer (D2C) streaming service in the fourth quarter of 2019,” the SEC filing states.

“This is another benefit of the AT&T/Time Warner merger, and we are committed to launching a compelling and competitive product that will serve as a complement to our existing businesses and help us to expand our reach by offering a new choice for entertainment with the WarnerMedia collection of films, television series, libraries, documentaries and animation loved by consumers around the world. We expect to create such a compelling product that it will help distributors increase consumer penetration of their current packages and help us successfully reach more customers.”

HBO, Turner and Warner Bros content will create an interesting proposition, though this of course relies on a successful merger with Time Warner. As it stands, District Court for the District of Columbia Judge Richard Leon has given the green light for the deal, though the Department of Justice is appealing the decision, suggesting Judge Leon did not appropriately consider the implications of the merger. It looks to be a done deal, though the DoJ is being as awkward as possible.

The question which remains is whether the Time Warner content will be enough, even with its library of titles and additional third-party content. Netflix and Amazon Prime are surging ahead of the competition in terms of subscriptions, 130 million and 100 million respectively, though Disney’s new streaming service could be an interesting offer with the 21st Century Fox programming assets. Hulu might not be on the same scale as these three, but with 20 million subscribers it is certainly a platform worth considering. AT&T is entering a very competitive market.

What this does also offer AT&T is potential entry to the international content market. This is where Netflix is targeting future growth, suggesting at IBC 2018 competitiveness in the US market won’t bring the growth figures investors consider appropriate.

The Time Warner acquisition has been one of the biggest talking points of the industry for the last 18 months, though one of the big questions is whether AT&T can effectively manage a business in such a different vertical. The traditional telco approach to risk and expansion will not work here, for this venture to be a success AT&T will have to be a lot more aggressive and embrace the concept of the fail-fast business model.

With the cards now laid out on the table, it won’t be long before we find out whether AT&T has the capability to effectively diversify outside of the traditional telco battlefield.