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ESPN Pushes Back against Verizon’s Unbundling Plan

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ESPN Pushes Back against Verizon’s Unbundling Plan

The most expensive network on television insists on being in every cable lineup, not an optional add-on.

To the surprise and delight of consumers that have long been asking for à la carte TV, Verizon unveiled a plan last week that would allow consumers greater customization of their TV bundles, allowing them to opt for an affordable base packaged, supplemented by genre-specific add-on packages for an additional fee, very similar to how Sling TV works. However, Verizon has drawn the ire of Disney-owned ESPN for planning to put the popular sports network in an add-on package and not the base bundle.

ESPN argues that their contract stipulates that the network must be included in a TV provider’s most popular programming tier. Moving ESPN into an optional group of sports channels is forbidden, per their contract. Verizon on the other hand, contends that because all customers have the option to get ESPN at no additional cost, without having to pay an extra fee for it, or upgrading to a higher-priced programming tier, that the plan doesn’t run afoul of their agreement. The base price for Verizon’s FiOS service would include the basic channels as well as two of seven possible add-on packages, meaning that any customer, even at the lowest priced tier, would have access to ESPN, but only if they wanted it. It would seem that ESPN disagrees with Verizon’s interpretation of the contract, and intends to fight to keep their flagship channel, as well as ESPN 2, in the basic bundle, forcing them onto all subscribers.

As consumers seek relief from high cable bills, products like Sling TV has shown that there’s some potential for TV providers who can offer leaner offerings at more reasonable prices. At over $6 per subscriber, ESPN the most expensive network on television, composing more of your average cable bill than the next 5 most expensive channels combined. Sports programming in general is notoriously expensive, so trimming out ESPN and other sports networks are one way that TV providers can offer options at lower price points. However, this unbundling threatens the profits of the networks being unbundled, most of whom depend on reaping a per-subscriber fee from every single cable customer, regardless of whether they want a given channel or not. If customers are given the choice to opt in or out of certain channels, they could face much lower profits.

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Kevin Speedy

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