Monday, April 20, 2015

ESPN Objects To FIOS New Packaging Options

According to reports, Verizon's new packaging plan for their FIOS cable business violates the ESPN contract.  These contracts between cable network and cable operator are filled with a number of business and legal obligations including, how the network(s) are transmitted, packaged, ad inserted, data collected, on demand accessibility, confidentiality, and so much more.  In the case of ESPN, it is quite likely that the contract would stipulate that ESPN be carried on the most widely subscribed level of service and that the penetration of that level exceed 85-90% of all cable subscribers.  The FIOS plan specifically excludes ESPN in its planned new basic package and offers it separately in a sports tier.  For ESPN, that means the contract would not be in compliance.

Of course, it is not known the full extent of the contract, when it expires, and if FIOS expected to pay a penalty should early results of the new packaging program become too successful.  It will be interesting to see how FIOS responds and whether it continues to move ahead with its new packaging plans.  They certainly received positive reviews for upending the status quo model and responding to the competitive threats of OTT offerings like Sling TV and Playstation Vue.  But ESPN and parent company Disney may pose a big enough hurdle to force a delay.  With control of other nets like ABC, ABC Family, Disney, and more, it may turn into a very big and stretched out battle.