Verizon seeks to change cable TV game rules big time
Company wants to pay providers for the amount of people who watch their shows
It's a simple plan, one that surprisingly was not thought of before previously. Verizon says they want to pay providers not by the subscribers they can reach, but by the number of people who actually watch their shows.
According to a new report, Verizon, which operates Fios TV, is currently in talks with several "mid-tier and smaller" television companies to pay them -- not for the number of subscribers their channels can reach, but by the number of people who actually watch their shows.
"We are paying for a customer who never goes to the channel," Verizon Fios TV chief programming negotiator Terry Denson said in a Wall Street Journal interview with Verizon executives.
The payment structure would be passed on a "unique view" model. One person who spends at least five minutes on the channel would count towards a fee, according to the Journal. In turn, Verizon would not need to pay for anyone who didn't actually spend that time on the channel.
A drastic departure from the current state of programming, Verizon's model is an important one to consider. Television lineups are becoming increasingly overrun with channels that now cater to just about every niche audience. For the majority of cable subscribers, however, they're merely "speed bumps" on their way to the channels they actually care about.
A dramatic shift will actually occur seems unlikely in the near term. As Denson told the Journal, his plan is a "head-scratching thing" among channels, and something that likely won't be endorsed quickly. The fees providers would actually pay to channels would also need to be evaluated.
There's also the issue of how demographics would be valued. Currently, channels with viewers that fit within more highly sought-after demographics, like ESPN, earn far more in fees from providers than others.
Denson also pointed out that his company pays $5.04 a month per household to ESPN. USA Network, which has about 300,000 more unique viewers, only receives 68 cents per month. Fees in the new model would likely be modified based on the value of the audience.
© 2014 - Distributed by THE NEWS CONSORTIUM
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