It's Official: Verizon Fios Becomes First Pay-TV Provider to Offer Customized Program Packages

Verizon Studio - H 2015
Associated Press

The company is offering customers the ability to select channel packs from different genres.

Telecom Verizon's FiOS service made official Tuesday its plan to let customers put together a personalized package of TV programming, which is seen as a move in the direction of a la carte offers.

The Custom TV service, widely reported late last week, lets customers choose channel packs from seven different genres: kids, pop culture, lifestyle, entertainment, news and info, sports, and sports plus.

A Washington Post report late Friday cited a representative of Walt Disney's ESPN as saying the telecom giant doesn't have the right to use ESPN networks in a separate sports package as part of the new service. "Media reports about Verizon's new contemplated bundles describe packages that would not be authorized by our existing agreements," the Post quoted the rep as saying. "Among other issues, our contracts clearly provide that neither ESPN nor ESPN2 may be distributed in a separate sports package."

Asked about the Custom TV offer on Verizon’s earnings conference call on Tuesday, CFO Fran Shammo said: "This is a product that the consumer wants…. It’s all about consumer choice.” He highlighted that the average pay TV consumer watches only 17 channels.

Asked about the ESPN issue, he added: “We believe we are allowed to offer these packages under our existing [programming] contracts.” Shammo said it was "way, way too early" to discuss take rates and profitability of the new offer.

"No other subscription TV service offers this level of personal control and value to consumers today," Verizon said. "Although the number of TV channels the average American receives has increased by 46 percent over five years, Americans continue to view an average of 17 channels, according to Nielsen’s Advertising & Audience Report."

Every FiOS Custom TV package includes a base set of 35 channels, including select national networks plus all local broadcast stations and CNN, HGTV, HGTV and Food Network. Subscribers then choose two genre packs as part of the $54.99 per month base offer. Customers who want more than two packs can pay $10 more per month for each additional pack. Each pack features 10-17 channels.

The sports pack is understood to include ESPN and Fox Sports, among others. Sports plus includes regional and specialty sports networks.

The genre groups are not available on a stand-alone basis or in combination with any existing FiOS TV package, the company emphasized.

Subscribers have the option of getting Custom TV as a stand-alone service or as part of a double- or triple-play bundle. A triple-play bundle consisting of Custom TV, telephony and broadband services starts at $74.99 per month.

"This is an entirely new way to personalize TV," said Tami Erwin, president of Verizon’s consumer and mass business group. “FiOS Custom TV delivers consumers more choice and control over their TV. This package gives customers the flexibility to choose what they want and pay for just that. It’s simple and personalized."