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Verizon Seeks to Shake Up Fees for TV Channels

20 Mar, 2013 By: Doug McPherson

NEW YORK – Verizon Communications wants to tie the fees it pays to carry TV channels to how many people actually watch them, the Wall Street Journal reports.

Verizon, the nation’s sixth-biggest pay-TV provider with 4.7 million subscribers, is talking with several unnamed “midtier and smaller” media companies about paying for their channels based on audience size, according to Terry Denson, the phone company’s chief programming negotiator.

“We are paying for a customer who never goes to the channel,” Denson said.

Currently, distributors like cable and satellite operators pay a monthly, per-subscriber fee to carry channels based on the number of homes in which they agree to make the channels available, regardless of how many people watch those channels.

Verizon wants to offer broad distribution of a “significant number of channels,” including independent networks and smaller outlets. But each channel would be paid solely according to how many subscribers tuned in each month for a “unique view,” or a minimum of five minutes. Viewership would be measured by Verizon’s set-top box data, not Nielsen ratings.

“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. For smaller and independent channels that often aren’t widely distributed, he said, this model would provide much broader exposure.

The proposal, if implemented, wouldn’t reduce FiOS subscribers’ cable bills, Denson said. But over time, he said, he hoped the shift would “stabilize retail prices for consumers,” unless more people started watching smaller and midsize channels. If retail prices increase, “it would be due to consumer consumption,” he said.

Denson said for companies he’s negotiated with so far that discussions are “inching forward.”

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