Bundling Up To Catch The North American Couch Potato

from the too-lazy-to-churn dept

A new study suggests that telecom, technology, games and entertainment companies take a closer look at the practice of bundling. Bundling different services together, so that the combined offering is at a slightly lower price than all of the services offered individually is already catching on in some areas – with cable companies trying to offer bundles of broadband internet access, cable TV and VoIP phones. The nice thing for consumers is that (a) it’s cheaper and (b) it’s simpler. Everything is on one bill, and there’s only one annoying company to deal with when things go wrong. Of course, there are some downsides (usually the fact that the one company in question is quite annoying). However, the study points out that bundled customers don’t churn. They don’t switch to new providers nearly as often as those on single service plans. While it’s easy to switch your long distance phone service – people think twice if switching your long distance phone service also means switching your TV system and getting a new broadband setup. What the article doesn’t talk about, though, is why certain conglomerates haven’t taken this idea even further. If I were running a company like Time Warner (no more AOL) or Sony, I’d be doing whatever I could to offer a full bundle of everything you could possibly want – including both the access and unlimited content. People already say that services like Napster helped convince many people to sign up for high speed internet access. So, why not bundle unlimited music sharing into the package? Offer cable TV, TiVo-like service, movies on demand, broadband internet, phone service (mobile, landline, VoIP, whatever), video games and legal file sharing (not just downloads – actual sharing) all for a single “bundled” price and make consumers happy. Stop nickel-and-diming them for everything. More people are willing to sign up, and the average revenue per user that the company gets goes up. Plus, people are unlikely to switch. They’re getting everything they want in a single package at a reasonable price. Seems so obvious that no company would be willing to offer it.

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