After more than a decade of complaints, U.S. cable TV providers appear to slowly be getting the message: Americans are tired of paying too much money for bloated broadband and cable bundles.
Enter Verizon, who this week unveiled a new slate of cable TV and internet packages it hopes will stem the exodus of frustrated subscribers who have been ditching cable TV in record numbers, opting for cheaper streaming video alternatives instead.
Verizon’s new “mix and match” bundles come with a few important changes for the industry. One, Verizon says it’s getting rid of long-term contracts, long a source of consumer annoyance. Verizon also claims it will be eliminating hidden fees and surcharges, often used by the cable and broadband sector to sneakily drive up the advertised price of service.
“Customers don’t want to be forced into bundles and contracts. They don’t want surprises on their bill at the end of the month,” said Frank Boulben, SVP of consumer marketing and products at Verizon. Under Verizon’s new plans, users can subscribe to three FiOS broadband options: 100 Mbps for $40 per month, 300 Mbps for $60 per month, and a gigabit connection for $80 per month. That’s assuming these speeds are available; Verizon stopped expanding its fiber optic network in any meaningful way sometime around 2010. Verizon then offers users the option of several cheaper cable options: Your Fios TV ($50 per month for 125+ channels); More Fios TV ($70 for 300+ channels); or a subscription to Google’s live TV streaming service, YouTube TV ($50 for 70+ channels).
Phil Dampier, whose website Stop The Cap! tracks the ebb and flow of the cable and broadband industry (including its obsession with hugely unpopular broadband usage caps), says Verizon’s new plans are a step in the right direction for the industry, but a far cry from the “a la carte” (buying channels individually) option users have been demanding for years. He also noted Verizon’s claims of no annoying fees isn’t entirely true, and existing customers may have trouble signing up for the option. “Although it is nice to see the end of term contracts, Verizon's new plan is 'no-la-carte' and not free of fees, and the best prices go to new customers only,” he said. For example, Verizon’s new option includes a $12 per month set top box rental fee and a $15 per month router fee for some subscribers, tacking an extra $27 on to the final bill. Users also have to sign up for autopay and paperless billing to take advantage of the offers.
“While cable companies have basically told consumers looking for better deals on their spiraling cable TV bills to go pound salt, Verizon is still trying to lure new customers with some new TV plans that come at a discount—but clearly is not looking to lose a lot of money doing so.” The shift suggests that Verizon is at least feebly trying to listen to annoyed customers, in sharp contrast to several cable providers who’ve responded to angry TV cord cutters with an even larger assortment of price hikes and sneaky fees.
As a relatively late (2005) entry to the cable TV industry, Verizon has been slightly more receptive to the complaints of cord cutters. While many in the TV sector spent years denying that cord cutting was even real, in 2015 Verizon’s head of its TV division went so far as to admit that even she had hung up on traditional television. The US pay TV industry as a whole lost 2.87 million net customers in 2018, numbers expected to be significantly worse once 2019 subscriber totals are released (Verizon lost 67,000 TV customers in the third quarter alone). High prices, inflexible bundles, long term contracts, hidden fees, and terrible customer service are generally to blame. As such the sector has a choice: it can either continue doubling down on the policies that are driving consumers to the exits, or actually start paying attention to the reasons they’re leaving.