Verizon adds Google’s Stadia to Fios bundling options

The Verizon Fios bundling initiative is starting to look like an attractive proposition, and now it has added Google’s cloud gaming offer for an additional twist.

Launched in January, the mix and match offer looked like a sound attempt to boost broadband sales through bundling. There were several interesting elements, including the ability to pick-up and drop certain elements on a month-by-month basis, though adding a gaming segment will make the offer attractive to a small niche of US society.

The mix and match proposition is not a silver bullet for profitability, but more an incremental gain approach to building a comprehensive bundling offer. Each additional element will make the offer attractive to an additional sliver of the population. It’s a gradual and sustainable approach to take the company forward.

As part of the partnership with Google, new customers will receive a free Stadia Controller and Google Chromecast Ultra, as well as a Stadia Pro subscription for first 3 months, which will then cost $9.99 a month. Bundling in with a Fios Gigabit broadband service, Verizon is promising download and upload speeds up to 940 and 880 Mbps respectively, it could be attractive to the growing community of gaming enthusiasts.

According to analyst firm Newzoo, North America is second-largest region for gaming in terms of revenues, accounting for $39.6 billion, while the US is forecast to overtake China as the world’s number one individual market. And while mobile gaming is the largest segment currently, cloud gaming platforms are forecast for a surge in growth over the next few years.

The cloud gaming trends are driven by two elements. Firstly, the availability of platforms and the aggressive nature the providers, such as Google and Microsoft, expanding services. Secondly, the rollout of full-fibre networks and imminent adoption of 5G connectivity will ensure providers are able to deliver the promised experience to consumers.

The days of pure play telcos are drawing to a close very quickly. The attitudes commoditising data and the continuing decline in data prices will erode profitability of connectivity, meaning additional revenues will have to be sought elsewhere to increase (or maintain) ARPU. Another element to consider is the attractiveness of offers.

Numerous telcos are attempting to create convergence connectivity products as well as building on additional added value services such as security, gaming or entertainment options. Consumers are seemingly open to bundled contracts, meaning pure play telcos might become less competitive in comparison to some.

What Verizon is currently building might not revolutionise the financial spreadsheets overnight, but it is slowly developing a very attractive bundling service. Orange has validated the convergence business model in Europe, though this took years to create, and it now seems Verizon is getting a run on the market in the US.

TIM secures exclusive Disney+ deal in Italy

Telecom Italia has been announced as the exclusive partner for Disney+ in the country, with services set to be launched on March 24.

With the content and connectivity worlds becoming increasingly intertwined, telcos who are not able to offer a TV service within a bundle might look less attractive. This is the theory, which still needs to be genuinely ratified, though bundling content into connectivity packages is certainly not going to do any harm. With Disney+, Telecom Italia (TIM) has found a very attractive partner.

“We are proud that Disney has chosen TIM as its strategic partner in Italy,” said CEO Luigi Gubitosi. “This agreement comes within the strategy adopted by TIM to pursue alliances with major international players in various segments, to offer cutting-edge products and services.

“Adding Disney+ gives a major boost to the strategy of TIMVision as Italy’s leading aggregator of premium content in the Italian TV industry, in a context where convergence between telecommunications and content will play an increasingly key role in the group’s future, thanks to the development of ultrabroadband and 5G.”

Available across all devices, the TIMVision content platform does look to be an attractive proposition. While some telcos have chosen to secure fortunes through owning content rights, TIM has gone the more steadfast, and perhaps more sensible, direction of becoming a content aggregator. In fairness to TIM, it has done a pretty good job in creating a decent offer, one which will only be enhanced by Disney+ content.

Although Disney has been quite quiet over the last few weeks, it did proclaim during the earnings call that Disney+ had secured 28 million subscriptions in the first six weeks. Perhaps more impressive, is these numbers are only representative of the US market.

Outside the US, streaming video on-demand (SVoD) services have been gathering momentum. Uptake has not been on the same aggressive scale everywhere compared to the US, though bundling content packages in with local connectivity service providers has been a successful venture for Netflix to date. Taking these lessons to heart, Disney is targeting Italy with TIM, has partnered with Sky in the UK and Verizon in the US.

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.