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Cable Technology Feature Article

March 18, 2013

Verizon Proposes New A-La-Carte Programming Option

By Brooke Neuman, TMCnet Copy Editor

New innovative technology has changed the way consumers watch TV and movies. Subscription-based and a-la-carte options, like Netflix and Roku, have taken over, leaving traditional TV providers struggling to keep loyal viewers.

In fact, the online streaming of television shows has greatly affected TV ratings. Fewer people are turning on the tube, opting for their smartphone or tablet instead to view their favorite programs.

In an effort to save money and boost ratings, Verizon (News - Alert) is taking its own stab at TV a-la-crate. Verizon is looking to carry more channels on its FIOS TV service, but with one catch: The firm only wants to pay for the channels customers are watching. Typically, companies like Verizon pay monthly per-subscriber fees for additional channels. Now, Verizon wants to pay particular channels according to how many “unique views” each channel gets per month.

Also, Verizon wants to ditch the Nielsen ratings system for its own set-top-box to calculate views.

Not surprisingly, the company is facing some backlash with its new proposal. Although negations are in motion, companies are hesitant to accept the proposal because "it's such a disruptive model" says Terry Denson, Verizon’s chief programming negotiator.

With cheap online streaming, higher pay-TV costs could deter consumers.

Verizon is first in talks with smaller to mid-sized media companies, hoping to include independent networks and smaller outlets into its current lineup. "If you are willing to give a channel five minutes of your time, the cash register would ring in favor of the programmer," Denson said. This could be beneficial to smaller, independent channels that don’t get as much attention compared to big-time sports programming.

"It feels like certain content players who have a suite of channels attempt to lever the strong ones to prop up the weak ones…without any empirical data to show that these channels are actually viewed or wanted," said Verizon's Denson.

Edited by Braden Becker

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