Bundling the marginal

The question came up as to whether telcos are being too conservative with their TV plans, but I have to wonder whether the investment they will have to make is worth the price.

I barely ever click on the tube, but when I did last night, I noticed at least three prime time commercials for a telco bundled offering. The TV hitch was DirectTV, and the first thought through my head was what advantage there could be in doing it. I have a minimal cable offering, mostly because I get a ten dollar discount on internet access (so my actual TV cost is about $4). But there is no way I’d find any value in a big satellite or fancy cable offering, and most of the folks I know wouldn’t either.

So I cut the price of the “additional” offering out of the equation, and what I get is pretty expensive phone and internet service. And it is going to be expensive, if only to cover the cost of all those prime time ads. There is simply low marginal utility in it, but I don’t think the telcos are going to listen.

Bundling may be good where the cost of delivery has already been incurred, and the products are absolutely necessary (like AOL bundling computer security products with their internet access), but I think the telcos may be better off sticking to their core product line, and figuring out how to make money at it again.


One such telco might be looking like they want to enhance their core services, but Verizon’s rumoured low fiber offering is about the same game…entertainment.

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