21st Century Fox Inc., one of three TV programmers objecting to Verizon Communications Inc.’s new Custom TV service, said it is willing to discuss new ways to package pay-television networks.
“We’ll work with Verizon, we’ll look at what they’re doing,” Peter Rice, chief executive officer of the Fox Networks Group, said at the Milken Institute Global Conference Wednesday. “We’ve been trying to offer our distributors some flexibility. On the margins we think some of the skinny bundles don’t necessarily offer a good value.”
In response to Web-based services like Netflix Inc., cable and satellite providers have begun offering so-called skinny bundles, lower-priced TV packages designed to appeal to younger viewers and cord-cutters. That’s led to conflicts with programmers like Fox and Comcast Corp.’s NBCUniversal that don’t want their channels left out. Walt Disney Co.’s ESPN is suing Verizon, saying Custom TV violates their contract.
Rice said the transition to more Web-based programming will be “bumpy” for media companies, especially for those with less-watched channels.
“Long term, we’re very excited about the future,” Rice said. “There’s a transition going on. For the people who make and own really fantastic content that’s a tremendous world we’re going to move into.”
CBS Corp. is taking a different approach than its competitors with Verizon, CEO Les Moonves said at the panel. CBS Sports is part of the optional sports package in Custom TV.
“It’s the wave of the future,” Moonves said. “The 150-channel universe is changing. You’re going to be able to get different packages and once again we’re going to be in all of them.”
Verizon’s Custom TV offer started earlier this month. For $55, viewers get a base package of channels, including local broadcasts and two optional groups. Those who want more can add other categories for $10 apiece. ESPN and ESPN2 are part of a sports bundle.
CBS is also marketing its flagship CBS network directly to consumers with a service called CBS All Access for $5.99 a month. The new offering, which includes live TV and library access, is doing better than expected, Moonves said, with demand especially strong for past seasons of current shows.
“Eighty percent of the people are doing it for catch-up,” Moonves said. “That’s why they’re signing up. This couldn’t have existed three years ago, five years ago.”
The company plans to announce a similar service for Showtime, its premium cable network, he said.