Thursday, August 9, 2007

Verizon FiOS TV Consumer Research

Research firm One TRAK has published a study of Verizon FiOS TV subscribers in 34 communities in Massachusetts. An abstract can be found on its website. It found that:
  1. Initial incumbent cable subscriber losses can exceed 10%.
  2. Traditional overbuilders, such as RCN, can take a disproportionate hit, effectively insulating the incumbent cable provider.
  3. As many as 40% of FiOS TV subscribers could well be coming from DBS.
Comcast is the incumbent cable operator in these 34 cities, while RCN Corp. provides service in nine of these communities. This study is based on information made public by the Massachusetts Department of Telecommunications and Cable, which requires all cable operators in the state to file year-end subscriber count figures by municipality

Across all 34 communities , Comcast lost 5,216 subscribers from a base of 204,160, a drop of 2.6%, while RCN lost 1,813 subscribers, or 7% off its base of 25,895 subscribers. Verizon’s gain was 11,982 subscribers. The average amount of time Verizon was in any one market was about 90 days.

One TRAK points out that since Verizon gained 4,953 more subscribers, that most of this remainder came from the satellite providers.

This is an interesting analysis. It shows again that it usually the weaker competitors, in this case RCN and the satellite companies, that have been most strongly affected by the new FiOS TV service.

It also shows that a large part of the FiOS TV is probably coming from Verizon's ADSL subscriber base. The satellite TV customers are probably nearly all using Verizon's broadband service rather than a cable modem service. FiOS TV should be quite attractive to these users. They can upgrade to a better data service and get rid of the dish at the same time.

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