Verizon redesigns its FiOS Custom TV offering

Reuters News
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Posted: Feb 19, 2016 8:03 AM

By Malathi Nayak

NEW YORK (Reuters) - Verizon Communications Inc, which launched its pay TV plan "FiOS Custom TV" last year to let viewers choose bundles of channels they want to watch, has redesigned the offering.

The revamped Custom TV now offers a choice of one of two packages with over 100 channels and three optional genre-specific packs, instead of a slim offering of 36 channels plus numerous genre-specific add-ons.

The move was not in response to objections from content partners but based on customer feedback, a Verizon spokesman said.

The first package, named "Essentials," has over 190 channels, including the big four U.S. networks - Disney's ABC, CBS, Fox and NBC with no sports offerings.

The second package, "Sports & more," has more than 160 channels, including ESPN and regional sports, plus non-sports channels such as the Cartoon Network.

In April last year, Verizon repackaged the traditional pay-TV bundle and created a stir with some programmers by moving some traditional pay TV base-tier channels into optional genre-specific add-on packs. The channels it moved included ESPN, a unit of Walt Disney Co and Comcast Corp division NBC Universal's USA.

ESPN has sued Verizon, alleging a breach of contract, while Twenty-First Century Fox and NBC Universal have said the Custom TV offering violates their contractual obligations.

ESPN is "encouraged by the changes that Verizon has made to Custom TV," spokeswoman Katina Arnold said. She declined to comment on ESPN's lawsuit against Verizon.

FOX and NBC could not be reached immediately for comment.

The offering now costs $69.99, along with FiOS Internet and digital voice services and three genre-specific add-on packages for $6 each. The first Custom TV iteration started at $65 a month for broadband, 36 fixed basic channels and two genre-based channel packs, from a choice of seven for $10 each.

The growing popularity of online video services such as Netflix Inc has put pressure on pay TV providers to innovate.

Last month, Verizon's Chief Financial Officer Fran Shammo declined to comment on the ESPN lawsuit on an earnings call with investors, but said customers "don't want to have to pay for bundles that they never use."

"We will refresh (Custom TV) here in the short term to be in compliance with the contractual arrangements," he added.

Compared to pay-TV giants AT&T Inc with its DirecTV acquisition last year and Comcast, FiOS has a small market in 12 states and Washington, D.C., with 5.8 million video customers as of the end of 2015.

(Editing by Lisa Shumaker, Bernadette Baum and David Gregorio)