Verizon To Offer "Slim" TV Packages Through FiOS That Includes ESPN, FS1
Verizon on Thursday announced that its FiOS service beginning Sunday will offer "slim" new TV packages that include "broadcasters such as ABC and Fox, as well as CNN, AMC, Food Network and others," according to Ramachandran & Knutson of the WALL STREET JOURNAL. Consumers "can then add on 'channel packs' covering various genres, such as sports, kids, pop culture and lifestyle." FiOS’ cheapest plan will cost $55 a month and "include two channel packs." Each additional package, which can consist of about 10 to 17 channels, "will cost $10 a month." Customers "will be able to switch to a different channel pack after having one for 30 days." The plan "will relegate some of the most well-known cable TV channels to add-on tiers." For example, ESPN and FS1 are "part of the sports pack." Big channels like ESPN in their contracts with distributors tend to stipulate that they "need to be in the most widely distributed tiers or reach a high percentage of the customer base." FiOS President Tami Erwin said that the service "designed the add-on packages in such a way that it 'expects to be in a position of compliance' with its content contracts" (WALL STREET JOURNAL, 4/17). Erwin added, "We’re doing this in direct response to what our customers have told us. Customers want choice and increasingly customers have choice on video. We’ve said very clearly, ‘We expect to be the preeminent broadband provider in the market, but we want to give customers choice on they acquire and how they buy video.” She added this offering is a "step in the right direction" toward an a la carte cable offering ("Squawk on the Street," CNBC, 4/17).
FEELING FLEXIBLE: RE/CODE's Peter Kafka wrote while other TV providers have announced plans for their own skinny bundles, Verizon's "mix-and-match offer is the first to offer this kind of flexibility." It theoretically could appeal to someone who "wanted to watch football in the fall, then swap out a sports package for something else in the spring." An interesting development is that Verizon "has been able to convince some programmers to let them carve up their bundles." Disney typically "insists that pay TV providers that sell ESPN also sell channels like the Disney Channel" (RECODE.net, 4/16). CNBC’s David Faber said it is "yet another signal perhaps of the very rapidly now-changing face of the way content is distributed to those who use it in their homes." Faber: "The impact here (is) probably larger on the content companies, particularly those that may be in jeopardy of being marginalized, some would argue" ("Squawk on the Street," CNBC, 4/17).
PRICE NOT AS IMPORTANT AS CONTROL: CBS' Mellody Hobson notes some people claim that if ESPN was unbundled "on its own, it could be as much as $30 a month because of its popularity and how much they charge there." Hobson: "So this is not necessarily about cost savings, and even Verizon is not suggesting that it's cheaper. ... The winner will be the consumer because they will get it the way they want it, but they'll pay for it” (“CBS This Morning,” CBS, 4/17). BTIG analyst Rich Greenfield said, "I don’t think this is about price. I think just like on your phone you’re able to download the apps that you want. You can choose which you want to pay for, but you the consumer, you’re in control" ("Squawk Box," CNBC, 4/17).
I LOVE COLLEGE: VARIETY's Todd Spangler reported Verizon has signed a "series of deals for college-sports programming" for its upcoming wireless Internet TV service in an indication that the company could consider "full sports networks too pricey for the millennial-targeted offering." ESPN, CBS Sports, ACC Digital Network, Campus Insiders and 120 Sports are included in the offering. Verizon is "focusing on college sports, in the belief that it's especially appealing to younger consumers." Verizon VP/Content Strategy & Acquisition Terry Denson: "College sports with all of its live programming and networks targeted to millennials are a natural fit for any mobile-first video platform." The OTT service is likely to roll out later this year (VARIETY.com, 4/16).