Seems like ever since Cablevision sued Viacom over its process of bundling less popular channels in with the ones people actually want, things have heating up in the pay-TV world. But instead of suing anyone, Verizon says it’s working on an entirely new model of TV programming: It wants to pay fees to media companies for their TV channels depending on how many people actually watch them.
Sounds like a simple idea, and one that’s pretty anti-bundling. But just like Cablevision, this doesn’t necessarily mean Verizon wants to pass savings on to customers or offer a la carte programming.
The Wall Street Journal spoke to Verizon’s chief programming negotiator, Terry Denson, who said the company has started talks with some “midtier and smaller” media companies about paying for channels based on audience size.
As the industry stands right now, cable and satellite providers pay monthly fees to carry channels depending on the number of homes in which those channels are made available. Doesn’t matter if no one ever clicks over to that channel, it’s still included as part of the bundle.
“We are paying for a customer who never goes to the channel,” he explained, adding that instead, Verizon would pay fees for each channel based on how many of its subscribers actually tuned in each month for a minimum of five minutes.
“If you are willing to give a channel five minutes of your time, the cash register would ring in favor of the programmer,” he said.
But here’s the rub — if the proposal ends up being a real working model, it wouldn’t reduce FiOs subscriber’s cable bills, Denson admits. It would only have the potential to “stabilize retail prices for consumers.” If more people started watching those smaller and midsize channels, prices would actually increase “due to consumer consumption.”
He says the companies he’s spoken with have met his plan with “head-scratching” because it’s so different from how things work now. We must admit a bit of head-scratching on our end, as well. If the savings garnered by not having to pay for unwatched channels isn’t then passed on to customers, this whole plan is basically a Goliath vs. Goliath story.
Good luck with your plan, Verizon, and let us know when it’ll actually decrease monthly bills for customers or give us more control of which channels we end up paying for, instead of just “stabilizing” retail prices.
Verizon Seeks to Shake Up Fees for TV Channels [Wall Street Journal]