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Why is FiOS TV Such a Threat?

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New numbers out this week suggest that, at least in Massachusetts, new FiOS availability is contributing to subscriber loss for both cable and satellite operators. Analysis from OneTrak shows that incumbent cable providers can see losses exceeding 10%, while satellite operators are facing even worse. (As many as 40% of FiOS TV customers may be migrating from satellite.)

The question is – why are people ditching cable and satellite for FiOS?

Possible reasons:

  • Bandwidth – There is a small subset of the consumer population that cares about high bandwidth speeds, but throughput is really more of an operator concern right now than a widespread consumer one. It’s hard to know if the number of consumers determined to have fiber-to-the-home speeds is significant enough to account for measurable cable and satellite desertions.
  • New Features/Interface – No doubt FiOS 2.0 is sharp, but how many people know what it looks like, much less what it can do? My guess is not many yet, but then again, I haven’t seen the FiOS ad campaigns in Massachusetts.
  • The Bundle – This could be a compelling reason. Cable has a triple-play bundle, but it’s only become well-established relatively recently, meaning that plenty of people aren’t getting triple-play services yet. Meantime, Verizon has been delivering the triple play through its partnership with DirecTV, which means it has an easy sales channel for stealing those DirecTV customers for a full FiOS experience.
  • I Hate My [Fill in the Blank] Provider – Anyone who has had a bad customer experience has motivation to make a change. I wonder what customer satisfaction was like in Massachusetts before FiOS TV rolled in.

8 Responses

  1. “I Hate My Provider” seems like the only reason that would account for such a large shift. Satellite customers may have been driven to become so in large part by “I hate my provider” sentiment against their cable companies. These people are also familiar with getting their tv-content from a less traditional provider and thus are probably more open to this process. While Verizon still has a neutral customer service image in the tv space, the question remains as to how long before Verizon becomes the provider you hate the most. They do have experience in monopolistily bad customer service in the phone space that they successfully port to dsl service.

  2. […] Why is FiOS TV Such a Threat: Connected Home 2 Go […]

  3. FiOS is like the holy grail of programming. It’s the same price (or cheaper) than cable, you don’t have to mess with equipment the way you do with sattelite, and the bandwidth is amazing.

    Here’s a Motorola based question for you, though: When is FiOS going to roll out the support for external DVR hard drive expansion via eSATA or USB? Word on the interwebs has it that Motorola has finished the driver, so why wasn’t it included in the FiOS 2.0 roll-out?

  4. Ha! I doubt I can get an answer on the timing for a Verizon roll-out if Verizon hasn’t stated anything publicly. But being the glutton for punishment I am, I’ll give it a shot. :)

  5. Easy… more features for less money.

    I just recently signed up for FiOS after years of service from Comcast. Why did I make the jump? For less money than I am paying Comcast now (about $10 less), I get 3 times the bandwidth for my internet service and a better DVR (Comcast can’t/won’t do the multi-room DVR yet).

  6. […] much love as Verizon has gotten for FiOS, there is occasional disgruntled muttering over Verizon’s lack of aggression in adding HD content […]

  7. I’m about to leave DirecTV for FiOS TV. The reason is not that I hate satellite at all. I am a pioneering user. The issue is that now only moderately poor weather causes reception problems. And the problems are MOST SEVERE on the new HD channels, which is exactly what we wish to watch. AND…since we watch almost exclusively off TIVO…and you do not find out that you have failed to record or have recorded junk until it all over….you are forced to NOT USE the HD feature. It appears that much of DirecTV’s HD channels are on the “far western” satellites and the angle from the East Coast causes more degradation of signal strength with rainy or snowy weather. We have loved “digital TV” and its near studio reception quality. Now, argueably the next generation of improved consumer TV technology is FiOS. And as best I can tell the price per month will be less. I will add that we have used FiOS Internet and FiOS VOIP phone for about 18 months with only one problem. And we live with that problem. The FiOS phone dial-tone interruption logic is faulty and approximately 20% of calls are not recognized and time-out to a “If you are trying to place a phone call, please dial a number” announcement. This problem is vexing and does not seem to have anything to do with how or when a number is presented to the FiOS architecture.

  8. FIOS gives a dedicated line to the home without having to share bandwidth. Those that wanted faster speeds than DSL had to go with Comcast, which can fluctuate depending on time/usage. I have the triple play bundle with 20Mbp/5Mbp line.

    My opinion is that the tired of “name of provider” is also a significant reason. I’ve been living in Boston for years, and recall the days when the cable industry was a monopoly with Cablevision (based in South Boston) serving the Boston area. Customer service was not the best.

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