Providing further evidence that the traditional pay TV bundle is fraying at the edges and the model is shifting to smaller, more flexible programming packages, Verizon Communications has unveiled FiOS Custom TV, a new batch of bundles that will become available to new and existing customers starting Sunday (April 19).
Customers who sign up for Custom TV will get a “Base” (and ESPN-free) package with more than 35 channels – including the broadcast channels, CNN, HGTV, AMC, Food Network – plus two of seven available thematic “Channel Packs” that each offer ten or more additional channels.
Steering clear of a full-on ala carte approach, Verizon FiOS Custom TV is starting off with Channel Packs in the categories of Kids; Lifestyle; News & Info; Sports; Pop Culture; Entertainment; and Sports Plus. Customers can change their Channel Packs after 30 days.
Customers also have the option to add Channel Packs at any time for $10 each, presenting a model that is similar to the one Dish Network has in place for Sling TV, the new OTT pay TV service that’s selling a core service that runs $20 per month but does not currently include any broadcast channels (Sling TV’s sells add-on packs run $5 per month each, and HBO for an additional $15 per month).
The triple-play version of Verizon FiOS Custom TV starts at $74.99. The cheapest Custom TV plan will fetch $55 per month,The Wall Street Journal reported, noting that the sports pack will feature ESPN and Fox Sports 1.
Re/code has more detail on pricing tiers posted here, showing that a standalone (no Internet) version of Custom TV starts at $54.00 per month, a double-play (TV and Internet) starts at $64.99 per month (with 25 Mbps symmetrical broadband); and a triple-play version that starts at $74.99 per month (with 25/25 Internet).
Verizon is launching Custom TV amid a small but growing cord-cutting trend and as it and other pay TV service providers face additional competition from virtual MVPDs such as Sling TV and Sony PlayStation Vue, which recently launched in three markets (New York, Philadelphia and Chicago). Apple is reportedly working on a skinny TV service of its own that could launch as soon as this fall.
The top 13 pay-TV providers in the U.S., representing 95% of the market, lost about 125,000 net video subs in 2014, according to Leichtman Research Group (LRG). Craig Moffett issued a research note recently detailing how cord-cutting appears to be accelerating as pay-TV subscriber growth trails the rate of new household formation.
Verizon, which ended 2014 with 5.64 million FiOS video subs, said many of its customers want more choice and flexibility in their TV service.
FiOS Custom TV “is a simple way for customers to choose the types of channels they want without paying for those they don’t,” Verizon said in the announcement. “We listened to what our customers want – millennials, cord shavers, cord cutters-- and delivered Custom TV--an industry first.”