Verizon announced a new video and broadband bundle today called Mix & Match on Fios, which the company claims disrupts the traditional cable TV bundle. The package provides some content choice options and simplifies billing, but upon initial review, we’re pretty far away from a true disruptive service.
Here’s how it works. Customers select one of three internet plans: 100 Mbps for $39.99; 300 Mbps for $59.99; or a gigabit connection for $79.99. The first two plans also require a $15/month router fee, but the fee is waived with the gigabit plan.
Customers can then add a video option to their internet plan, which has a minimum monthly fee of $50. For the minimum fee, customers can select any non-premium 5 channels from a list of 200 channels. Verizon then offers 120 additional channels, based somewhat on the customers’ 5 selected channels. Major local broadcast channels are included in the additional 125 channels.
Customers can also choose more traditional bundles of 300 channels for $70/month or 425 channels for $90/month. A streaming YouTubeTV option is also available for $50 month, with no additional channels. Customers must pay $12 extra per month for a Fios One set-top-box for all packages except the $90/month package. Or they could choose a free digital adapter.
A home phone option can be added for an additional $20/month and Verizon is offering its TechSure Plus service for $15/month. TechSure Plus is 24/7 support for home networks and devices.
So, at a minimum, and by my math, a customer will pay $116.99/month for a double play of 100 Mbps and 125 channel video package (including router and STB rental). Add $20 to get to $136.99 for a minimum triple play bundle. But it could go as high as $189.99/month, including one STB.
Analysis
Mix and match on Fios is an interesting attempt at giving the appearance of video choice, but it’s hardly truly disruptive to the traditional cable bundle. True disruption would give customers an a la carte option, allowing them to choose only the channels they want, which may equate to only 10 or 20 channels.
This, of course, can’t happen, at least not under the current programming regime, where business rules prevent retail cable operators from offering that option. Even if they did, it’s highly unlikely there would be any difference in price. It may even be more expensive to offer an a la carte option.
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Perhaps there is some element in disruption with the pricing transparency offered with Mix & Match on Fios. Verizon says they are not adding any ‘below the line fees’ which are now quite common with cable bills. These fees usually capture regional sports and local channel retransmission fees, tacked on after the bundle price, and thus, ‘below the line.’ All these fees are captured in Verizon’s monthly video costs which begin at $50.
“No added surcharges, no broadcast or regional sports network fees, and no surprises,” a Verizon press release states. “The price is the price, plus tax, and you’ll always know what you’re paying for.”
Verizon mobile customers can get a discount of up to $20/month, when adding a mix and match plan.
