CONTRACT PLAYER: Consumers get wise when it comes to cable and satellite contracts

Customers have spoken, and Verizon FIOS is just the latest in the cable industry to listen.

Verizon FIOS recently announced plans to forgo its standard two year contract plans for consumers in favor of a pay as you go type business model, similar to that of Comcast.

FIOS did, however, put a deadline on this deal, before April 14, but the idea that the cable communications heavyweight not only considered but implemented a no contract plan shows just how drastically the combination of competition and customers voicing their likes and dislikes plays into business decisions.

Of course, FIOS isn’t totally through with their contractual plans, either. They still offer them and, like any good company with a competent marketing department, reward customers who go that route with some sort of bonus for signing on for the entire two years.

Any company, whether they’re as established and large of an entity as Verizon or Comcast, wants to ensure that their revenue stream will be consistent and able to be tracked. It’s doesn’t take a business pro to figure out that the two year agreement guarantees a company a certain amount of revenue. If you’re projecting one million customers over the course of two years at $79.99, you have a really good idea what your revenue stream is going to look like.

But industry climates change, and companies are forced to alter their business model to support what customers are clamoring for; in this instance, its cable, internet and phone from a company without being locked into a long term deal.

To FIOS’ credit, they afforded would be customers the opportunity to enjoy all that they can offer without a contract involved, while maintaining pricing integrity in the process. FIOS could have easily added an extra $10 or $20 per month to the month by month deal but chose to keep the pricing competitive.

A lot of that decision making from Verizon FIOS, Comcast or any of the other cable or satellite giants likely is driven by competition, along with other entertainment options such as Hulu and Netflix luring customers away with pricing that is less than $10 per month.

Obviously, Verizon FIOS can’t compete from a price point with those options, nor are they going to try. They’ll rely on their additional product features and services to maintain and earn more business. It also helps when they pay close attention to what their customers, and the potential ones, are saying.

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