The move to a la carte television—where customers choose what networks to have in their subscription packages—has been a hot topic for a couple of years as everyone from advocacy groups to John McCain have called for it. Consumers are simply tired of paying for channels that are never watched or unwanted to begin with.
But now, amid the launch of more flexible over-the-top (OTT) packages, Verizon FiOS has become the first major pay-TV provider in the United States to take steps in that direction.
The telco IPTV (News - Alert) provider has launched the “Custom TV" offering, which offers a skinny TV package with 35 networks, including CNN, AMC, HGTV and the Food Network—plus a series of optional add-ons. While it’s not true a la carte TV, it still provides for much greater flexibility than what’s typically found in a basic cable offering.
Consumers can choose from seven different topical bundles. Subscribers can choose any two packages of networks as part of the basic fee, and can get additional bundles for $10 a month each.
Among the bundles are two different sports packages. One offers ESPN (News - Alert) and Fox Sports 1, while the other includes the NFL Network, the MLB Network and 18 regional sports networks.
An entertainment package will carry popular cable networks such as TBS, TNT and USA; a news package will carry Fox News, MSNBC and CNBC; a kids' package will include the Disney (News - Alert) Network, Nick and the Cartoon Network; and a pop culture package includes Comedy Central, E! and MTV, and a "lifestyle" package that includes Animal Planet, Bravo and Lifetime.
The structure is not unlike DISH Network’s over-the-top (OTT) Sling TV, which is marketing itself as a skinny TV package for cord-cutters and Millennials for $20. The Best of Live TV core package service is one of the first OTT offerings to deliver live sports, with ESPN and ESPN2. Its bouquet also includes lifestyle, family, news and information channels, from TNT, TBS, Food Network, HGTV, Travel Channel, Adult Swim, Cartoon Network, ABC Family, Disney Channel, CNN, El Rey and Galavision. Plus, it has the AMC flagship network, BBC AMERICA, BBC World News, IFC, Sundance TV and WE tv. In addition, thematic add-on packages are available for $5 more per month to allow subscribers to customize their content choices. These include sports, lifestyle, kids and news—though the latter only includes HN, Bloomberg (News - Alert) and international choices.
However, it’s much easier to do this on an OTT level, which is what makes Verizon’s move notable. In traditional multichannel content negotiations, pay-TV distributors are often forced to add unpopular and niche channels if they want to gain access to top offerings like AMC or ESPN. For instance, in order to add MTV from Viacom (News - Alert), it’s typically necessary to also take—and pay for—Palladia, which typically shows older concert footage. So distributors simply pass that on to end users.