Verizon to Be Picky Choosing Content Partners, Says Vestberg
Verizon’s agreement to offer discovery+ free to subscribers on select plans (see 2012020049) won’t be its last partnership with a content company, but it will be selective, Verizon CEO Hans Vestberg told a virtual UBS investor conference Tuesday. “We’re not going to bring in 100 companies here.” His Q&A was postponed 24 hours due to unexplained “technical difficulties” with the UBS virtual platform.
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The carrier is turning away many potential content suitors, said Vestberg. “We have many people knocking on our doors and want to be part of that transformation. We’re going to take the ones that we see alignment with.” Verizon’s network, distribution and branding “assets” are “attracting these partners to work with us,” he said of past tie-ups with Apple Music and Disney+.
The alliances are “proving” to be a “win-win” for Verizon and each of its content partners, said Vestberg. “We are supporting them to get more subscribers. We are making money and retention on it, both on the consumer side and the business side. So all in all, we’re very happy with the models we have done, and that’s why we brought in Discovery.” That agreement followed a year and a half of negotiations, he said.
It’s “a little bit early” to gauge how many Verizon customers will convert to paid Disney+ subscriptions now that their yearlong freebies are beginning to expire (see 1910220008), said Vestberg. Verizon is seeing “very early signs” that customers will stick with Disney+ as paid subscribers, especially after ESPN+ and Hulu were added to the offering during the summer, he said. Vestberg is confident of “really good retention” on Disney+ because “we give good quality to our customers,” he said.
“There might be” some partnerships for Verizon to pursue “in other areas” besides entertainment content, said Vestberg. Verizon is fearful of partnering on too many “offerings,” he said. “We don’t want to confuse our customers.” Look for nothing “intense” in future partnerships but rather alliances that number in the “low-single digits in new and different segments,” he said.
Teaming with Apple on the iPhone 12 launch has been “a great success” in Verizon’s strategy of migrating customers from entry-level “leader” data plans to “unlimited” and “premium unlimited” packages, despite the market “headwinds,” said Vestberg. COVID-19's toll on retail is working “against that tide,” he said. The carrier has 150-200 stores closed due to the pandemic, he said.
The company's deployment of dynamic spectrum sharing technology to attain nationwide 5G coverage in support of the iPhone 12 launch “is performing as we expected, on par or better than our 4G,” said Vestberg. DSS allows 5G to run simultaneously with 4G on multiple bands (see 2010280054). He conceded DSS can be prone to occasional signal “losses” in certain locations, “but the important thing, that’s nothing that the customer sees,” he said. “What’s important is the customer experience, and the experience of our 5G DSS nationwide is great.” Verizon expects “more and more” 5G coverage with DSS “in the weeks and months ahead,” he said.