Verizon Wireless turning to video to tap that cap

Verizon launched a new video service recently, and currently is giving free Netflix for LG Revolution buyers. But there's a cost to that video that you'd better understand.

Since carriers in the U. S. have pretty much all retired those aging unlimited data accounts on smartphones, customers have to pay attention to how much bandwidth they are using on a monthly basis. Exceeding a data cap is like renting a car for the rest of the month, except without getting the car to use. Some carriers offer data plans with as little as 200 MB per/month, but savvy customers usually get plans with bigger caps and watch what they use. That is why Verizon is looking to video streaming to help customers get all of their data plan worth, and then some.

A few weeks ago Verizon was all abuzz about its new video service, Verizon Video. This service offers "unlimited, on-demand access to full episodes of your favorite television shows from all of the major networks, plus the latest in local and national news, live and recorded sports and entertainment and weather." That's a lot of entertainment for just $10/ month.

Last night I was watching TV and kept seeing ads for the new LG Revolution smartphone on the Verizon network. It's a nice phone and to help move them out the door Verizon partnered with Netflix to help sell the phone. Buyers of the Revolution get three months of Netflix service free. On the surface it seems that Verizon is using video to help push its service, but I have a feeling it's a little more than that.

The fine print on the Verizon site tells the tale about video and its smartphones:

The download and use of Verizon Video will incur data charges according to your data plan. A data plan is required for use of this service.

Streaming video on your smartphone can increase your data use substantially.

That's right, Verizon is double dipping by charging you $10/month for the service, and then counting the bandwidth used watching the "unlimited, on-demand" content towards your capped data plan. The same applies to the Netflix service, during the free period and after. Most customers have either a 2GB or 5GB plan that is already costing a pretty penny, but when you exceed the plan you end up paying Big Red a cool $10 for every GB you go over.

A little research online yielded varying results but roughly that streaming a two hour Netflix movie uses 300MB of data. That means you can watch six Netflix movies in a month on your phone before exceeding your 2GB data plan. Of course, that's only if you do nothing else online than watch those movies. And don't even think about streaming HD to output to your TV as that can be 1.5GB per hour!

Doing this research demonstrates clearly why Verizon is getting into the video business on its smartphones. Nothing helps customers tap that cap like some streaming video.


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