Verizon has proposed that it only pay channel providers when viewers
actually watch a show. It’s not clear what effect this would have on
pricing for consumers, though TV industry skepticism means it may well
only be a hypothetical debate.At the moment, most US cable and satellite firms pay channel providers a fixed monthly fee for each subscriber who can receive a channel in their particular package. Verizon believes it’s getting stiffed on that system because it’s having to pay for channels even when few people are watching them.
Although Verizon hasn’t said this publicly, there’s an implication that some TV companies can benefit by forcing cable and satellite firms to pay for less popular channels in order to get access to the more popular channels without which they’d struggle to get subscribers.
Terry Denson, who is in charge of negotiating to bring channels to Verizon, says he’s already started talking with some TV firms about a tweak to the system. It would mean the fees wouldn’t be based on the number of subscribers with access to each channel, but rather than number who watched the channel for at least five minutes during the month. This would be worked out by the actual data recorded on Verizon set-top boxes, rather than the Nielsen ratings that extrapolate from a sample.
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