Verizon to offer slimmer TV channel packages
Verizon Communications is introducing a television through FiOS that gives customers more options to pay for the channels they watch, not for those they don’t.
The move is the latest attempt by the television establishment to introduce more flexibility amid a flurry of new competition from streaming rivals. A growing number of people are forgoing traditional television service in favor of streaming options that can be cheaper and provide more choice.
Verizon’s new service, called FiOS Custom TV, starts at $55 a month and offers a base channel package with more than 35 channels, including local broadcasters and networks like CNN, HGTV, AMC and the Food Network. In addition, customers can select two of seven genre-specific packages — like sports, children or entertainment — that include 10 to 17 additional channels and are part of the $55 monthly charge. Customers also can add channel packages for $10 a month and change their selections after 30 days.
With the new TV service, available Sunday, Verizon will also sell Internet and phone service in a bundle for additional fees.
Verizon’s new offering is a discount on the typical monthly cable bill, which comes to an average of $90 a household, according to the data firm SNL Kagan.
It follows a series of TV services introduced in recent months from media, tech and telecom companies: PlayStation Vue streaming TV service from Sony starts at $50 a month and includes more than 50 channels, and Dish Network has a $20-a-month service that includes about 20 channels in its core package.
At the same time, television networks like CBS and HBO have started standalone streaming services that do not require a subscription to a traditional TV service.
The companies are trying to appeal to a growing number of cord cutters, who have abandoned their traditional TV subscriptions, and even those who have never subscribed.
Established cable and satellite companies also are exploring new options. Michael J. Angelakis, chief financial officer at Comcast, the largest U.S. cable operator, said during a recent conference that the company also has thought about “more flexible packaging, more streaming, lighter packages in order to provide those alternatives and those choice to our customers.”
Verizon’s new offering could usher in a series of similar offerings from other traditional providers, analysts said. The cable and satellite industry negotiates deals based on “most favored nation” status, meaning that if some companies land distribution deals with TV groups their rivals are often entitled to reach similar terms.
“If Verizon has this ability, it implies that you will shortly see others do it, too,” said Rich Greenfield, a media analyst with BTIG Research.
New choices could pose a threat to the established economics of the television industry. The business is built on big TV groups’ selling bundles of television networks to cable and satellite companies, which in turn package those networks for subscribers. The fraying of that bundle could disrupt that model.