Verizon Skinnies Down With FiOS
Skinny TV has hit the mainstream. Following on the heels of Dish Network's introduction of Sling TV, Verizon has revealed that it will start offering new slimmed-down pay-TV bundles later this week. The skinny-TV packages will start with a basic channel line-up and give subscribers the option to bundle in additional channel packs according to personal taste. The news was first reported by Reuters.
According to Recode, Verizon Communications Inc. (NYSE: VZ)'s cheapest skinny-TV package -- with the basic line-up plus two custom channel packs -- will sell for $55 per month. For $65 per month, customers can add in basic Internet service with symmetrical speeds of 25 Mbit/s. Higher Internet speeds and/or the addition of phone service will add to the cost of the bundle. Subscribers can also stack up on additional channel packs, each available for $10 per month. Channel packs include: kids, pop culture, lifestyle, entertainment, news, sports and sports plus.
A wave of new online video services has opened programmers up to the idea of new distribution models, and specifically to skinnier TV packages. For instance, both ESPN and HBO were available for years only to consumers who had already purchased a significant pay-TV bundle. Now, however, viewers can get ESPN as part of Dish Network LLC (Nasdaq: DISH)'s $20-per-month Sling TV offering. And HBO is available online in the form of HBO Now for only $15 per month when purchased through Apple Inc. (Nasdaq: AAPL)'s iTunes, or as an add-on to Sling TV or Cablevision Systems Corp. (NYSE: CVC)'s Optimum Internet service. (See Dish to Sling HBO by Saturday .)
In the case of Verizon, it will even be possible to get some Walt Disney Co. (NYSE: DIS)-owned content like the Disney Channel without other networks such as ESPN.
Programmer flexibility comes in response to new online competition, but it doesn't mean content owners are willing to forgo profits if they can avoid it. The latest FiOS news comes only hours after Verizon also announced that it has signed content deals for a new mobile-first video service. Among those deals is one that includes ESPN in a package of online sports content that is expected to be bundled up and sold starting this summer. (See Verizon Scores New OTT Content Deals.)
In other words, Verizon at least is likely using the leverage of having multiple distribution channels as a way to negotiate for skinnier TV.
— Mari Silbey, special to Light Reading