Since the beginning of this year, Verizon has frustrated its customers with several pricing changes and the removal of popular discounts.
For example, in February, Verizon hiked the monthly rates for customers on myPlan and New Verizon Plan accounts by $3 to $5, citing "rising operational costs." The following month, it raised the monthly price of its Verizon Mobile Protect Multi-Device plan and Verizon Mobile Secure Multi-Device plan by $8.
In August, Verizon made the bold move to increase its device activation fee from $35 to $40. It also further angered customers when it warned them that it was pulling the plug on loyalty discounts.
Verizon also removed its free Apple Arcade and Google Play Pass perk from its 5G Get More and 5G Play More phone plans. By September, it had hiked the monthly price of its tablet plans and several other fees customers pay.
As these changes took effect, Verizon lost 7,000 postpaid phone customers during the third quarter of this year, with its churn rate reaching 0.91%, according to its latest earnings report.
It is no surprise that Verizon is losing phone customers, as many consumers nationwide are hunting for more affordable phone plan options amid rising prices.
- The average cost of a single-line phone plan is $76 per month. Verizon customers spend an average of $79 per month on a single-line phone plan.
- About 42% of Verizon, T-Mobile and AT&T customers have seen their phone bills increase in the past year, which is 7% higher than average.
- Also, 58% of Verizon, T-Mobile and AT&T customers are contemplating switching to a different phone carrier as prices go up.
- Verizon risks losing a combined 84.7 million customers due to high mobile plan pricing. Source: WhistleOut
To help soften the blow of recent pricing and discount changes, Verizon has reduced the monthly price of a key streaming perk for customers as more look for value.
Currently, Verizon offers customers Netflix and HBO Max (with ads) together for $10 per month. However, for customers who want to upgrade to ad-free HBO Max subscriptions, Verizon is reducing the price of those tiers, a change that took effect on Dec. 16.
According to a recent press release, Verizon is now offering its customers HBO Max Standard for $7.50 per month, down from $11 per month. For HBO Max Premium, the monthly price dropped from $15 to $12.
For Verizon customers who already have the Netflix and HBO Max (With Ads) perk with one of the HBO Max ad-free tiers added on, the price will automatically drop, a change that will take place on their next billing cycle after Dec. 16.
The move from Verizon comes after HBO Max raised its prices on Oct. 21. An ad-free HBO Max Standard subscription now costs $18.49 per month, reflecting a $1.50 price increase. HBO Max Premium without ads is now $22.99 per month, up from $20.99.
HBO Max isn't the only streaming company that recently hiked its prices; Netflix, Disney+, Hulu and Discovery+ also became more expensive this year.
As streaming services become less affordable, more Americans across the country are switching their streaming habits, according to a recent survey from Reach3 Insights and Rival Technologies.
- Approximately 6 in 10 Americans have changed their streaming habits in recent months.
- Specifically, 24% have switched to ad-supported streaming tiers, while 32% are relying on ad-supported or free apps and 21% only subscribe to a streaming service when specific shows are available.
- Nearly half of Americans have canceled or downgraded a subscription, with affordability and a lack of compelling content cited as the top reasons.
"Consumers are redefining entertainment in the face of broader economic concerns," said Varun Jog, research director at Reach3 Insights, in a press release. "The winners will be the brands that adapt quickly, offering deep value in ways that reflect their shifting priorities."
It is no surprise that Verizon is making its streaming offers more attractive since one of its top rivals, T-Mobile, offers its customers competitive streaming benefits.
Currently, T-Mobile offers customers on select plans AppleTV for $3 a month, as well as free access to Netflix and Hulu.
Recently, Verizon has been lagging behind T-Mobile in terms of consumer satisfaction for postpaid phone plans, as more consumers seek value.
Phone carrier consumer satisfaction rates for postpaid phone plans:
- The average consumer satisfaction score for postpaid plans under mobile network operators is 593 (on a 1,000-point scale)
- T-Mobile ranks the highest with a satisfaction score of 636.
- Verizon takes second place with a 583 score.
- AT&T falls behind Verizon with a satisfaction score of 573.
"The findings show that value is the most important driver of the overall experience, followed closely by service quality," said Carl Lepper, senior director of technology, media and telecom at J.D. Power," in a press release.
Verizon has recently been offering increased discounts to boost customer satisfaction. Last month, it quietly began offering select customers discounts of up to $20 off per phone line for a year. It also launched generous deals on phones, tablets and watches, with no trade-in required.
Dan Schulman, who was appointed CEO of Verizon on Oct. 6, has been planning to transform the company following recent customer losses.
During an earnings call in October, he criticized previous price increases and stated that the company's primary goal will be "to build loyalty and drive significant improvements in retention" going forward.
"You should expect bold execution powered by sophisticated and smart marketing actions that strengthen loyalty and the elimination of practices and processes that detract from the customer experience," said Schulman. "Raising rates without corresponding value rarely, if ever, delights customers."