Cablevision made headlines as the first pay-TV provider to offer HBO’s new standalone service HBO NOW to its broadband customers, and today the cable company is again targeting cord cutters with new packages combining internet, a free digital antenna, and the option to bundle in HBO NOW if they choose. The “cord cutter package” as one bundle is officially called, is one of two new offerings the company announced today – the other combining a slower internet option, the antenna and a Wi-Fi voice service.
Explains Kristin Dolan, Cablevision CEO, in a statement announcing the new bundles, “as a connectivity company, Cablevision is reimagining its relationship with its customers.”
Dolan adds that the packages are meant to provide “real alternatives that fit new consumer lifestyles.”
Specifically, the company notes that it’s going after “cord cutters” – those who are abandoning their pricy cable TV subscriptions, as well as so-called “cord nevers” – meaning those younger consumers who simply never sign up for cable TV in the first place.
The two packages initially sounds like they have relatively low price points compared with traditional cable TV bundles, as the bulk of the pricing is covering the broadband service (or broadband + phone service.)
In the cord cutter package, customers have Cablevision’s “Optimum Online Ultra 50” internet service (50 Mbps down/up to 25 Mbps up) and receive a “complementary” digital antenna (the reliable Mohu Leaf 50) allowing them to watch over-the-air broadcasts without a cable box or pay TV subscription.
This is the first time Cablevision has ever handed out digital antennas like this to customers, we should note. Of course, Cablevision customers could have configured this setup for themselves before by dropping to a broadband-only package and buying their own antenna, but clearly the goal here is to simplify the process for those wishing to cut the cord as well as entice new customers with the promise of a free antenna.
The catch here appears to be in the fine print – the “cord cutter” service is $44.90 per month, but only for the first year. (We’ve asked for Cablevision to provide details on the next-year pricing, which was not immediately disclosed, and we’ll update with their response.) Plus, Cablevsion has tacked on a $4.95/month modem lease fee.
The second package, dubbed the “everyday low price” bundle, is less expensive at $34.90/month (not a promotional price). This includes Optimum Online Internet Basics (up to 5 Mbps down), Wi-Fi voice service, and the same free antenna. Both bundles also include access to Cablevision’s 1.1 million hotspots and the modem fee. The Wi-Fi phone service, however, additionally requires the purchase of a Motorola G smartphone for a one-time fee of $99.95 for access to Cablevision’s unlimited data, talk and text that comes without a traditional cellular plan.
Both packages also allow customers to bundle in access to HBO NOW for another $15 per month as an option.
Cablevision is not the first pay-TV provider to target cord cutters – earlier this month, Verizon also launched new TV packages that allow customers a la carte programming options. Here, customers initially get a slim package of TV channels that include the major networks and a few of the more popular cable channels (e.g. CNN, AMC, Food Network, etc.) and then add on as many other channel “packs” as they choose, which are grouped into genres like sports, kids, pop culture and lifestyle.
Verizon said its cheapest plan is $55/month and includes two channel packs. Additional packs are $10 per month. And customers can swap out packs as they like after having one for 30 days, which is a more flexible option that ever allowed before.
But while Verizon’s deal smartly targeted consumer demand for flexibility, it seemed to have failed to address consumers’ financial interests when it comes to cord-cutting. One reviewer even struggled to build a bundle that was significantly less than what he was already paying before the new option.
In addition to Verizon, Dish Networks has also been going after cord cutters with Sling TV, a streaming service that starts at $20 per month and lets you add on optional themed channel packs for $5 each, as well as HBO for $15/month. But Sling has experienced some growing pains, and may not be ready for primetime.
These moves come at a moment when the traditional pay-TV industry is having to compete with a shift in consumer opinion over the value of paying for cable or satellite television subscriptions.
But what’s funny about the cord cutting trend is that it may be – at least, right now – more talk than action. Some recent studies showed that, in reality, consumers were doing more “cord shaving” (making their pay TV bundles cheaper) than “cutting.”
And just this week, Nielsen said that cable subscribers who also have a subscription-video-on-demand service are more likely to drop that than they are cable TV. The firm stated that 93% of homes with both were more likely to drop broadband or their subscription video offerings, rather than their cable TV.