Verizon Jumps on Data Bundling Bandwagon

Content plus data bundle

ESPN is considering it. AT&T has discussed it. And now Verizon is jumping on the bandwagon.

At a financial conference yesterday, Verizon EVP and CFO Fran Shammo stated explicitly that we’re likely to see content and wireless data delivery bundled together from certain content providers. In other words, a network like ESPN would cover the cost of video delivery so that users could stream to their hearts’ content without going over mobile data caps.

From the transcript of yesterday’s conference:

So I think you are going to see this ecosystem change, you are going to see some content provider say I’m willing to pay for the content, don’t charge the consumer and when we developed LTE, we developed LTE and our billing system with the capability to segregate that traffic if someone else wants to pay for it.

Now Shammo wants to be clear that this isn’t a net neutrality issue.

Net neutrality is around prioritizing the delivery of content, that’s not what we are talking about, content will be delivered equally across the network. This is just a matter of who pays for the delivery of that content, and I think you are going to see that change and that’s going to open up what can be done on a more seamless basis.

However, by adding in delivery costs, a network like ESPN would be making it harder for smaller content guys without ready capital to compete. Welcome to the world of new media kingpins.

5 thoughts on “Verizon Jumps on Data Bundling Bandwagon”

  1. So what’s going to happen to the monthly plans and caps?
    Clearly, the “unlimited data” is a thing of the past if this is going forward. I see it more likely that we’re heading towards a cable style bundling… which would of course suck as much as it does on cable. It’s not like ESPN will pay for this data for very long, they’ll just want to do it as a promotion to get people sucked into it.

    So once ESPN decides that they’ve sucked in enough users and won’t pay any longer, we’ll get plan A for $90/month with a cap of 1GB, but excludes ESPN (though you can pay separately to ESPN for it – but it eats up your data allotment right away). And plan B, also $90/month, but capped at 500MB but with ESPN (and ESPN charging a fee from the carrier for this, which subsidizes their costs, natch).

    …and then every other big media provider might want to get in on it too… etc….

    This seems like a model that will lead to pissed of customers, but profits. Like the cable industry. Or maybe I’m just too pessimistic.

  2. “Now Shammo wants to be clear that this isn’t a net neutrality issue.”

    Well, under current FCC guidance, there is no net neutrality for wireless. Only wireline.

  3. Mike- All models lead to profits, or they die.

    Chucky- Yeah, there’s that. But Shammo has to know there are going to be net neutrality issues brought up around this in the press.

  4. Mike-if they piss off the customers, all of this goes away because no one will sign up for the service. After all, no one really needs this. Even with ESPN, only the niche market of sports fanatics would go for it on terms like that.

  5. ensaburnur – Be careful when you say stuff like that. Sure I agree with you over the LONG TERM. But for example pretty much everybody thinks their cable is too expensive and that bundling is bad and so forth, yet its likely going to survive for decades before it finally gets crushed by innovation or internet streaming or new competition or something (at least that’s the theory). You can stay in a state with limited competition for pissed off customers for quite some time.

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