Verizon’s Custom TV package is getting some pushback from content providers – in particular ESPN – that are claiming that the so-called “skinny TV” package from the telcos’ FiOS TV offering is in violation of their existing carriage agreements.
Verizon announced Custom TV on April 17 with much fanfare in advance of its Sunday (April 19) launch. Custom TV was touted as the next step toward unbundling video, offering 35 base channels like the four broadcast networks, CNN, HGTV, Food Network, AMC and WeTV and the option to select two “Channel Packs” in the Lifestyle, Entertainment, News & Info, Pop Culture, Kids, Sports and Sports Plus genres for as little as $54.99 per month for the first year. According to the deal, customers could choose additional Channel Packs for $10 more per month.
But shortly after the announcement, website Re/Code reported that ESPN, which along with ESPN2 is part of the Custom TV Sports Pack, had taken offense to the inclusion.
“Media reports about Verizon’s new contemplated bundles describe packages that would not be authorized by our existing agreements,” ESPN said in a statement. “Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package.”
ESPN is not alone in its consternation. At Fox Sports, whose Fox Sports 1 and Fox Sports 2 channels are also relegated to the Custom TV Sports Pack, executives did not share the same interpretation of their carriage agreement as Verizon. And late Tuesday, NBC Universal added its name to the growing list of peeved programmers, stating that "Verizon's announced 'Custom TV' package does not comply with our existing agreement."
"We reject Verizon’s view that it can pursue the new packaging scheme it announced yet still comply with our agreements," Fox Sports said in a statement. "That said, we prefer to keep our commercial discussions confidential, and we will continue to address our concerns directly and privately with Verizon."
On the surface Custom TV appears to be yet another attempt by distributors to offer skinny bundles, or fewer channels for lower prices. The Custom TV offering appears to be close to Dish Network’s over the top offering, Sling TV, which offers a package of 21 base channels (including ESPN and ESPN2) for $20 per month and additional channels grouped by genre – like sports, kids and family, entertainment and news & info – for an additional $5 per month.
Whether Verizon just badly misinterpreted its carriage agreements or not is still a mystery -- according to reportsthe company said it designed the packages in compliance with its programming agreements. Whether the telco will be forced to make ESPN and ESPN2 part of the base Custom TV package – and whether that will affect the price – remains to be seen. ESPN said it would not comment beyond its statement.
Verizon did not return requests for comment.