Karl Bode On The Triple Play
If you listened solely to ISP press releases, you'd think that the triple-play bundle is all the rage, and that the majority of customers are lining up to pay one company $100+ for three or more services. In reality, most customers still prefer to grab one or two services, and frequently can net better bargains by shopping around for their third or fourth service - be that video, wireless, or VoIP.Upcoming Advisory Committee Meeting
According to a Jupiter Research survey from March, only five percent of subscribers sign up for the triple-play, and only around a quarter of all customers are interested in nabbing all services from a single provider. "The assumption that everybody wants a bundle is flawed," a Jupiter analyst told the Washington Post last March.
This week a new study by Pyramid Research claims most customers are interested in either one or two services. The study finds that "most telcos are selling 1 to 1.5 revenue generating units (RGUs, aka one service) per customer while cable companies perform slightly better, selling around 1.5 to 1.9 RGUs per customer" (thanks to cable deploying VoIP faster than telcos are deploying video).
The report almost laughs at the idea of the "quadruple play."
Occasionally you'll catch rare candid admissions by incumbents that customers aren't quite as keen on the triple-play as their press releases would lead you to believe. For example, Time Warner's CFO recently admitted that only 7% of his company's customers subscribe to three services, and the majority only purchased a single service.
Whenever this topic is breached, there's a chicken and the egg debate here that springs up: are customers really saving significant money by bundling? Or are they being penalized for not bundling in environments where competitive choices are lacking? Comcast's stand-alone broadband service remains ridiculously expensive for someone who doesn't watch television. Similarly, stand-alone VOIP from Comcast costs a whopping $55.
Bundling is, in part, an effort by providers to obfuscate the real price of services, clouding the consumer's ability to directly compare single-service prices. Once a customer has switched to a single-provider, they're frequently greeted by unexpected fees, and the cost-savings they expected are nowhere to be found.
The next CCAC (aka TAC or Telecommunications Advisory Committee) meeting is scheduled for June 21 at 7pm. The meeting will be held in Room 225 at 100 Maryland Ave., Rockville, and is rumored to include a Verizon representative. It would be nice if she were to address the status of the FIOS TV franchise but I don't expect it - all the negotations are being kept private - although snatches have escaped on occasion. At the same time, franchises are being hotly debated in Congress so a local franchise may be a moot point. Verizon may well have written off the MC franchise given its success to date lobbying Congress for national franchise legislation (it's already passed in the House).
If you'd like a question posed, send it directly to your CCAC representatives. You can check the Frapper map to find your nearest CCAC representative (look for the green icons). Most of them are publicly listed in the white pages. Call one up and express your thoughts. These people represent you!