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Verizon announced a partnership with Google to provide its customers with access to Google’s video streaming TV service, YouTube TV.
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Now, Verizon Wireless, 5G Home, and Fios broadband customers will be able to stream YouTube TV on any platform for free. The service, which typically costs $50 per month, gives users access to live and on-demand content from over 70 networks.
Here’s why it matters: YouTube TV marks the first big, free content perk Verizon is offering to its mobile subscriber base, which is necessary to improve its customer satisfaction and value.
- Satisfaction among Verizon’s customers is slipping. Seventy-one percent of Verizon customers from our proprietary panel said they were at least somewhat satisfied in 2018, compared with 79% the prior year, according to Business Insider Intelligence’s Digital Telecom Consumer survey. Although our data isn’t representative of the general population, as respondents tend to be tech-savvy early adopters, we think it provides a strong indicator of consumers’ brand satisfaction. The dip in satisfaction is likely a result of the carrier not drastically improving its offerings in the last year, while its competitors have rolled out new perks, but the addition of YouTube TV can help Verizon overcome the downward trend in customer satisfaction.
- Its mobile customers don’t see much more value in its offerings than a year ago. Verizon is still trailing behind rivals T-Mobile and Sprint in value for cost, and it’s not improving as quickly. In 2018, the carrier improved just 3 percentage points YoY in its share of subscribers who rank its value for cost as good or outstanding, but that’s no match for its competitors: T-Mobile increased in value by 13 percentage points and Sprint did by 5 percentage points, according to Business Insider Intelligence’s Digital Telecom Consumer survey. YouTube TV’s $50-per-month cost savings is a big step to incentivize consumers as it gives them access to a service they would otherwise have to pay for.
The bigger picture: YouTube TV’s growing popularity among consumers will help Verizon reduce customer churn.
YouTube TV is gaining traction and has passed 1 million subscribers, according to a March 2019 report by Bloomberg, up 233% from just 300,000 in January 2018. YouTube TV’s subscriber growth is even more striking considering that similar competitive offerings aren’t experiencing the same fate.
In Q4 2018, AT&T’s Direct TV Now TV streaming service lost over 14% of its user base, for example. The addition of a rapidly growing streaming service gives Verizon a new tool to reduce its postpaid churn rate, which grew from 0.8% in Q1 2018 to 1.12% in Q1 2019, and keep customers from switching to other carriers.
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