Soon enough, you won’t pay a cable bill, write a check for your cellphone service, or settle up on broadband charges.
Those monthly charges will all be clumped in one big media bill.
In cable, the bundle is king.
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It can bring discounts to consumers and the convenience of handling multiple services through one company.
For sellers, bundling teams high-profit services such as broadband and landline phone service with lower-margin TV programming subscriptions. It also makes products “stickier.” A customer is less likely to flee to competitors for one service when it means breaking up an existing package, particularly with the perception that they’ll pay more buying things piecemeal.
Industry analysts see the prospect of Sprint mobile service wrapped into cable packages as part of a nearly inevitable evolution that will, at least from a consumer’s view, blur the lines of various services. Increasingly, they say, people will pay a single company for the various services that put pictures on their myriad screens.
“This is a response to both what consumers want and a competitive response to AT&T and the bundle that they have,” said Glen Friedman, a broadband consultant with Ideas & Solutions. “For a long time, the cable guys have wanted to have a mobile offering.”
When AT&T bought DirecTV for $48.5 billion two years ago, it showed the telecommunications industry’s desire not just to be a connection — whether to a website or TV programming — but to pile up more customers by controlling both content and its delivery.
Since the acquisition, AT&T has been bundling the ready-made cable-like lineup of television channels under DirecTV’s umbrella with landline phone service, high-speed internet and its mobile service.
Customers who buy the multiservice packages can save money. AT&T locks in contracts on more services and builds up a customer base that’s less likely to switch to the latest tempting plan from Verizon, T-Mobile or Sprint. After all, turning to a new carrier might cost them the savings that come with their bundle. It would also mean the hassle of multiple bills rather than one consolidated monthly charge.
Charter and Comcast struck a deal in May to look at a joint venture that would add mobile service to their offerings. It’s not the first time hardwired cable has sought to be wireless. In the mid-1990s and again in the mid-2000s, Comcast, Cox and Time Warner Cable resold Sprint service.
But that idea may have come too early. Now advances in streaming and wireless technology have dramatically changed the dynamics.
“The difference this time around could be that Comcast and Charter agree to partner on logistics, billing, technology, etc., and manage the backend on their own but leverage Sprint’s network to offer services,” said an analysis from industry tracker Barclays Capital.
Even today, 90 percent of the shows and films consumers watch on their electronic tablets and 70 percent of what they stream on their smartphones still move over Wi-Fi in the home, said Bruce Leichtman.
In that respect, said the president and principal analyst for Leichtman Research Group Inc., the merging of services is less about consumers wanting to make televisionlike programming mobile. Rather, he said, companies who sell the services think it could make customers pick a plan and keep it.
“The bundle is all about glue,” he said. “It takes away thought. If you know what your bill is going to be, if you know that you only have one bill, that’s a good thing for consumers and their providers.”
While there’s talk about an emerging quadruple play — broadband internet, TV programming, landline phone and mobile phone — Leichtman said it’s less about the number of services and more about one-stop shopping. Landline service, for instance, is fading away. By the end of 2016, 50.8 percent of U.S. adults had cellphones but no landline phone in their homes.
“It’s not about the quad play,” he said. “It’s about adding value and creating different packages that serve different constituencies.”
At the same time, wireless companies look to shift their traffic from cell towers to Wi-Fi, encouraging customers to patch their smartphones and other mobile devices to the short-range internet connections when possible.
Google’s Project Fi, for instance, charges customers based on the data connections to the wireless access it buys from Sprint, T-Mobile and US Cellular as a mobile virtual network operator, or MVNO. But those customers don’t get dinged for access to data, or voice calls, over Wi-Fi at home or in publicly available networks.
“Increasingly, it’s all about data,” said Larry Gerbrandt, a cable industry analyst for Media Valuation Partners. “If you look into the future — voice, video, internet — is all becomes just data.”
More and more, the world of apps, of augmented reality that pastes context from the internet on real-life surroundings, and of entertainment accessed through the internet, begin to merge, he said. The differences between one connection and another — home broadband and mobile networks — will become less distinct in the years to come. So-called 5G networks that carriers are building today could leapfrog the speeds of even fiber-optic wired connections to the home within five years.
“If you’re watching Netflix, you’re not watching video any more, you’re watching data being transmitted to you over a data network,” Gerbrandt said. “Ultimately, all of this merges into a data package. The consumer says, ‘All I care about is price.’ They don’t care if they’re watching it in their living room or somewhere else. They just want what they want.”
Consumer advocates may be less eager for the consolidation. By giving another service for the leading companies in broadband and TV service to add to their bundles, they worry that smaller competitors could lose market share. That, in turn, could free Comcast and Charter to charge more.
“You create more market power for the dominant players in video and broadband,” said Mark Cooper, director of research for the Consumer Federation of America. “Then you have the question of how they leverage that.”