Disney pulls FiOS ads from its channels as ESPN sues Verizon for breach of contract.
Many consumers see unbundling of pay-TV as inevitable, but one company has made it clear that they’re not going to be unbundled quietly. Disney-owned channels, which include ABC stations, A&E Networks, and the company’s flagship ESPN, have all pulled advertising for Verizon’s FiOS TV service in retaliation for the telecom’s new pricing scheme. ESPN has also formalized its complaint that the plan is a breach of contract by filing a lawsuit against Verizon. ESPN insists that their contract prohibits ESPN from being sold in a separate sports package, which is precisely what they allege that Verizon’s Custom TV plan does. Custom TV customers receive a basic package of 35 channels, as well as two additional channel bundles from a choice of seven genre-specific packages. One of these packages is indeed a sports package containing ESPN, but Verizon seems to think that it’s found a loophole. Because two bundles are included in the base price, every FiOS subscriber has the option to receive ESPN at no extra charge. Doing so would simply mean foregoing other channels. Though those same subscribers would also have the option to forego the sports bundle and ESPN in favor of other channels, and Disney is not happy about it.
Verizon now finds itself in an interesting position, playing the consumer hero against the nation’s most popular and most expensive TV channel, ESPN. While Verizon’s loophole may be on shaky legal ground, the telco seems to think that it can win in the court of public opinion, often simply citing customer demand for lower prices and more choices when it comes to pay-TV. ESPN, on the other hand, despite the country’s addiction to sports, is cast as the villain this time around, forcing everyone to pony up for a channel that many may not even want or ever watch. As unusual as it is for Verizon to be the one sticking up for consumers, when it comes to pay-TV, it would appear that the telecom giant sees the writing on the wall. For the entire industry to continue to prosper, from TV providers to networks and studios, something’s got to give. The skyrocketing prices and bloated bundles that have defined the pay-TV business for so long are no longer sustainable. Verizon knows this, but Disney may prefer to find out the hard way.