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Where are the Verizon video freebies?

Moves by rivals AT&T and T-Mobile raise the question of whether Verizon needs to offer a video perk, even as customers flock back to its unlimited plan.

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Verizon remains surprisingly resilient, adding 603,000 retail postpaid customers in the third quarter.

Roger Cheng/CNET

AT&T dangles HBO and the promise of "Game of Thrones" when you sign up. T-Mobile throws in Netflix for its family plan customers. 

Where's the Verizon entertainment bundle?

The New York telecommunications company has waded into the media world with its acquisitions of AOL and Yahoo, but those deals are more about delivering advertisements, not video. It also has an investment in digital media company AwesomenessTV, which has a following among younger viewers. Then there's Go90, a free mobile video service -- that hardly anyone watches. 

That puts Verizon at a disadvantage if you happen to be looking for some sort of media throw-in with your plan. And let's face it, you're spending more of your time on your phone watching video. Consumers on average spend nearly half an hour each day watching videos on their phones, according to media agency Zenith.

Just wait until the second season of "Stranger Things" comes out. 

Video has become the latest weapon in the carriers' battle for your business. Yet even as things stand, Verizon remains surprisingly resilient, adding 603,000 retail postpaid customers -- or people who pay at the end of the month and generally have higher bills and stick around longer -- in the third quarter. That follows a rebound in the second quarter that was helped by the reintroduction of an unlimited-data plan. 

As such, Verizon CFO Matt Ellis doesn't believe the company needs to throw in any video perks. He noted the still low customer turnover rate (known in the industry as churn). 

"We can have good churn without bundling any offering," he said on a conference call with investors on Thursday. 

Verizon's postpaid growth got some help from the addition of 91,000 new tablets and 238,000 new wearables and other connected devices. The company added a net 274,000 new phone customers in the period. 

Beyond video, the extras have flown fast and furious. Sprint offers a year of service for free (excluding taxes and fees), and its prepaid arm Virgin Mobile boasts an all-iPhone lineup with a rate of $1 for the first year of service. In addition to the bundling of free HBO, AT&T offers its DirecTV Now streaming video service at a discount when bundled with a phone plan. 

The lack of an online video service is hitting Verizon's home entertainment business. The company lost 18,000 Fios video connections, although it added 66,000 Fios internet connections. Many traditional pay TV providers are starting to feel the sting of competitive online video offers and the rise of "cord-cutters" who ignore traditional cable in favor of streaming video. 

Verizon is considering its own full-blown video-streaming service, comparable to DirecTV Now or Sling TV, CEO Lowell McAdam told Bloomberg last month. 

Ellis, speaking on the call, said that Verizon doesn't want to launch a me-too product and that it would continue to look for ways to offer a different product built around live programming. "How and when is still TBD," he said.

For now, the unlimited data offer seems to be keeping things stable. 

Verizon reported a third-quarter net profit of $3.7 billion, or 89 cents a share. Excluding one-time items, it earned 98 cents a share. Revenue rose 2.5 percent to $31.7 billion. 

Analysts, on average, had forecast earnings of 98 cents a share and revenue of $31.45 billion, according to Yahoo Finance

Verizon shares rose 2.4 percent to $49.80 in premarket trading.

Originally published Oct. 19 at 4:39 a.m. PT.
Updated at 6:09 a.m. PT:  Added information from Verizon's conference call.

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