Why Verizon’s PlusPlay Could Be A Big Deal For Subscription Services Of Any Kind

You’d be forgiven if you missed Verizon’s investor day announcement last week that it’s launching PlusPlay, a super aggregator for streaming-video and many other subscription online services.

After all, even the industry smarties in Friday’s Town Hall gathering for TVREV’s Thought Leaders Circle hadn’t heard much about it when I mentioned that I’d be talking with Frank Boulben, Verizon’s Chief Revenue Officer, later in the day. But I think it could be a big deal for both the streaming-video industry and for the increasingly vexed customers trying to navigate a fractured landscape. It also has implications for the battered pay-TV industry.

PlusPlay will provide single-sign-on and a single bill for those among Verizon’s 150 million wireless customers who want to simplify their increasingly fractured array of subscription services of many kinds.

“I think the most succinct way to describe it is that it's a digital store for your subscriptions,” Boulben told me. “What we are observing in the marketplace is that consumers are having more and more digital subscriptions, whether it's for video, audio, music, gaming, lifestyle, wellness, etc. And it's becoming a real pain point for those customers to keep track of which services they are subscribed to on which platform with which payment and with which login and password.”

Alpha-stage testing of the system is set to begin by the end of the month with a “select” group of consumers.

Initial partners for the testing include video providers Netflix, Disney’s three streaming services, Discovery Plus, three A+E Networks niche networks, three more from AMC Plus, and TelevisaUnivision’s Spanish-language Vix Plus.

But it also will include some very different additional subscription options, including sports-news site The Athletic, Peloton’s exercise programming, Live Nation’s Veeps live-music online platform, weight-management service WW International, meditation service Calm, and language-learning app Duolingo.

Verizon plans to continue growing the pool of partner services, eventually curating a list of “dozens and dozens of services” ahead of a full PlusPlay launch by year’s end, Boulben said. It may also expand its array of categories as it goes too.

However no matter which vertical they belong to, most subscription services face similar challenges like customer acquisition, upselling/conversion and churn. So they could realize significant savings, though at the notable cost of giving to Verizon a direct billing relationship with their customers.

“We have a lot of service providers, starting with the (video) programmers, that are reaching out to us as they are looking for an efficient direct-to-consumer distribution platform, because most digital service providers haven't got the marketing or distribution clout to reach a large customer base,” Boulben said. “And that's really the gist of the PlusPlay strategy. It's to be that neutral marketplace that provides convenience and choice for consumers on one side, and on the other side provides unparalleled reach and marketing ability for the service provider.”

Startups such as Paket and ScreenHits TV have tried to do some of what PlusPlay promises, using apps that bring together in one place all the minutia of customer management for streaming-video customers. And Amazon’s Channels program has been a lucrative service for it, providing as much as $4 billion in revenue a year while connecting Prime Video subscribers with access to more than 100 video services.

Amazon, of course, is hardly the non-competing Switzerland that Paket and ScreenHits provide to their partners, given its own many video initiatives. For those and other reasons, HBO Max walked away from Channels last summer. That cost HBO Max the 5 million subscribers it had there, but its strong subscriber additions in the quarters since suggest the WarnerMedia service has suffered few negative consequences from the move.

Not every subscription service, however, has the resources or market strength of HBO Max or Verizon competitor AT&T, which still owns WarnerMedia ahead of a planned spinoff and merger with Discovery Communications. For those other services, giving up billing in exchange for other things Verizon can provide might be a good trade.

“Those partners have realized that we are very good at acquiring active subscribers,” Boulben said of current relationships with Apple TV+, Apple Music, Disney Plus and others. “In particular, we have a very high conversion rate from promotion to paid subscribers, which is a business challenge for them. And obviously, we are very good at managing the lifecycle of customers. It allows our partners to focus really on the product experience or the content experience.”

Boulben argues that Verizon’s PlusPlay partners are willing to trade part of the customer relationship in exchange for Verizon’s huge reach, existing sales/upsell teams, and lower acquisition and retention costs. Verizon has the biggest customer base of the Big Three wireless carriers, some 50 million households with 150 million individual customers, an enticing target for any DTC company, in video or elsewhere. 

And he emphasized that while Verizon has the billing relationship, the service provider gets all the usage data, along with the email and log-in of each customer, so they can directly market and upsell to those consumers.

Not everyone is convinced Verizon can make this work. They point to previous, disastrous forays into entertainment, like the multi-billion-dollar acquisitions (and subsequent sales) of aging online-media properties such as Yahoo, AOL, Huffington Post and Tumblr, and the two-time failure to make mobile-entertainment service Go90 a going concern.

“Consumers don't associate Verizon with entertainment,” one CEO of a streaming-tech company wrote. “They just go direct to the services. I think this will be their 5th attempt here right?”

It’s a fair question, though at least here, Verizon is offloading the programming decisions to providers, rather than owning and dictating content to its own divisions.

More importantly is what the new offering might mean for the future of so-called fixed-wireless services, which put a 5G-enabled base station in the home to provide bandwidth and Internet connectivity to smart TVs, other smart devices, phones, tablets, and computers. 

Verizon said Thursday that it already can provide fixed-wireless access to 30 million households, which combined with Verizon’s 16 million FiOS customers makes it one of the three largest U.S. “broadband” providers.  

“It's self setup, no need for an appointment,” Boulben said of Verizon’s fixed-wireless offering. “The equipment is included. And if you happen to be a mobile subscriber on Verizon, it's only $25 per month. So that's a very attractive proposition. That's going to be the next generation of home broadband and home entertainment.”

He joked, “Long live the traditional cable bundle,” but emphasized that Verizon isn’t traditional at all, because it separates the part it handles, connectivity, from the content, which the services provide through PlusPlay. Such bifurcation will be the future of the bundle, he predicted.

In the future, it’s also easy to see PlusPlay or its participating services offer bundles, even beyond such corporate clumps as the Disney Plus/ESPN Plus/Hulu bundle, or Warner Bros. Discovery’s already-announced deal for the ad-supported tiers of HBO Max and Discovery Plus with the soon-to-launch CNN Plus.

“Maybe in the future, it will make sense to group (services) in packages,” Boulben said. “I'm not using the word ‘bundle,’ but in packages of services. If we do that, that will be a very different type of bundle, because it will not bundle content and connectivity.”