Verizon Aims to Allow Customers to Pay for Just the Cable Channels They Want
March 18, 2013 4:20 PM
comment(s) - last by
Move could hurt sports broadcast industry, weaker channels
It's not just you that's irritated that you're paying for television channels you don't want due to bundling. Cable service providers are also paying a similar price. And while some -- like Time Warner Cable Inc. (
) -- are affiliated with those who profit off bundling themselves, many of the cable market's new players are purely on the losing end of the equation.
Verizon Communications Inc. (
co-owner of America's largest wireless mobile device service network
FiOS fiber-optic cable service
, is looking to put its foot down and reshape a consumer's cable-shopping experience to a "buffet" of sorts. Chief programming negotiator at Verizon Terry Denson comments, "We are paying for a customer who never goes to the channel."
The Wall Street Journal
he explains that Verizon is in negotiations to give customers access to the entire spectrum of cable channels (besides a handful of premium channels).
Verizon is upset about paying bundlers for content its customers don't necessarily want.
[Image Source: Android Community]
Whenever Verizon's set-top box documents a customer watching a particular channel for more than 5 minutes, Verizon would pay the bundler for that channel, and charge the customer for that channel. Mr. Denson says the deal would cover a "significant number of channels". He comments, "If you are willing to give a channel five minutes of your time, the cash register would ring in favor of the programmer"
While the idea of paying based on viewership is relatively old, the mechanism for doing so -- the internet connected set-top box -- is relatively new. In the past there was no way to collect this kind of real-time viewership information, making viewership based pricing more problematic.
Verizon's initial talks have focused on
"midtier and smaller" companies
. The executive said the negotiated deals/service pricing scheme could extend to on-demand viewing and mobile device viewing, as well.
II. Pushback From Broadcast Sports, Big Content Providers
Larger firms like Viacom, Inc. (
) and Walt Disney, Comp. (
) may be reticent to sign up for the bundling scheme, though. They often use bundling to prop up content that has low viewership, but which they deem is important. As Mr. Denson complains, "It feels like certain content players who have a suite of channels attempt to lever the strong ones to prop up the weak ones…without any empirical data to show that these channels are actually viewed or wanted,"
The industry shift may also upset the big-money professional sports industry. Much of the money of professional sports comes from broadcast deals, and much of that revenue in turn comes from fees associated with bundled channels. If fees were solely viewership based, fees could dramatically drop.
Bundling boosts sporting revenue; eliminating it could hurt professional sports.
[Image Source: U.S. Presswire]
For example market researchers Nielsen Holdings NV (
) report that ESPN (owned by Disney only averaged 1 million viewers for content within the first week of its airing. By contrast Comcast Corp.'s (
) USA Network (bundled by subsidiary NBCUniversal) averaged 1.3 million viewers within the first week, on average. But ESPN cost $5.04 per subscriber, while USA Network only cost $0.68 USD, on average.
Bundling fees don't always line up with viewership. [Image Source: WSJ]
Bringing fees in line with viewship could dramatically cut broadcast sports revenues, and in turn sports owners' profits and athlete salaries.
For those reasons some don't believe the effort will catch on. One unnamed executive is quoted as saying that the move would be "resisted fiercely", while another unnamed expert suggest this kind of effort had been around for years and never gone anywhere. The second source suggested that "unless there is a giant seismic shift", the bundling would continue much as it is today.
This article is over a month old, voting and posting comments is disabled
RE: Its the only way for cable to survive
3/19/2013 3:31:11 PM
Yeah because even $5/subscriber comes anywhere close to paying the fees associated with running a TV channel and producing content.
No. Everyone complains about the crap that is on TV. Why do you think reality and music shows are so big? Because they're insanely cheap to produce. No extremely expensive cast. No expensive writers. Just some slubs looking for their 5 minutes of fame, some prizes, and one or a few hosts/judges.
I have no issue with commercials. I just ask for a solid 22-25 minute episode with a good story. I have a DVR but I still rarely fast forward through commercials.
RE: Its the only way for cable to survive
3/19/2013 3:35:25 PM
Oh and I plan to dump satellite again. I did for a few months, but then I needed my football. Now it seems that ESPN3 has improved to where if it ain't on network, its on ESPN3. And I also didn't hear until too late that Sunday Ticket was being renewed through the PS3. They won't fool me again.
"If you mod me down, I will become more insightful than you can possibly imagine." -- Slashdot
Verizon Earnings Sag, but Posts Record Subscriber Increase Driven by iPhone
January 22, 2013, 3:19 PM
FCC, DOJ Worried About Verizon's "Noncompete" Deal With Cable Firms
July 13, 2012, 3:02 PM
Report: DOJ Opens Probe Into Cable Companies' Discrimination of Net Video
June 13, 2012, 5:05 PM
Twitter Senior VP: "Diversity is Important, But We Can’t Lower the Bar"
November 9, 2015, 9:59 AM
CNN Resorts to Internet Censorship to Promote Clinton Over Senator Sanders
October 15, 2015, 2:47 PM
Breaking Bad: How to Crash Google's Chrome Browser With Just 8 Characters
September 23, 2015, 11:08 AM
Quick Note: Amazon UK Offers £10 Back on Any Order £50 or Over
August 3, 2015, 12:05 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Mozilla and Facebook to Adobe: It's Time to Kill Flash
July 20, 2015, 6:30 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information