We’ve talked a lot about the changing cable industry, particularly about the promises and pitfalls of the à la carte pricing model. Verizon, it seems, has taken a version of this model to heart for its FiOS service, but not in such a way that it actually benefits consumers. According to the Wall Street Journal, the company is currently negotiating with all but the top-tier channels to pay them fractions of a cent for every five-minute block of time their customers actually watch, rather than a pre-determined, monthly, per-subscriber fee.
The company’s chief programming negotiator Terry Denson tells The Journal that Verizon (America’s sixth-largest pay TV provider) is in talks with “midtier and smaller” media companies, and that although negotiations are “inching forward,” the disruptive model it’s proposing is facing some opposition. If providers tried to adopt a similar model on a larger scale, sports channels would likely be among the hardest hit, since their fees are so high relative to other kinds of programming when counting for the number of viewers. In any case, it’s great to know that Verizon sees the benefit of paying for TV à la carte — now we just have to wait for it to let viewers do the same thing.
Of course, what a lot of sites are doing with this news is assuming this is the beginning of what we’ve always dreamed.
This is Verizon’s version of the Cablevision lawsuit we covered last month. Instead of suing, they want to avoid paying upfront for channels few people watch. Multiply the three bucks they might save on channels nobody watches by about ten million customers, and Verizon could end up saving a lot of money this way, none of which they’d probably give back to customers in the form of lower bills. If anything, it would merely keep rates from rising as much every year.
As for other downsides: Do you think canceling shows after two airings is bad? In the five-minute-metering world shows could potentially be cancelled before the pilot even finishes airing. Seriously.
In an age of $150 cable and Internet bills, granted, something has to give, and soon, but this plan sounds like a way to jack the networks, stifle creativity, and overall make the TV landscape worse than it already is.
Via: [Wall Street Journal]