By Ryan Knutson
Verizon Communications Inc. said Thursday that Walt Disney Co.
is refusing to carry advertisements for its slim new cable
packages, as the battle heats up over the traditional bundle of
channels that has underpinned the profitability of pay TV.
Verizon's new service breaks apart the one-size-fits-all package
of hundreds of channels and lets subscribers pay less for smaller
slices that are organized around interests like sports or kids'
shows.
The service and the ads launched Sunday. After Verizon unveiled
its plan last week, Disney, NBCUniversal and 21st Century Fox said
such packages were a violation of their existing contacts.
So far, Disney is the only company refusing to carry Verizon's
ads. Neither Fox or NBC have pulled ads for Verizon's new offering
as of yet. Disney didn't reply to a request for comment.
Verizon Chief Financial Officer Fran Shammo told The Wall Street
Journal on Tuesday the carrier would forge ahead anyway.
"We have launched the product, we are not retracting it, and we
believe we are in our legal rights to launch it," he said.
Verizon's new plans, available only to customers within its FiOS
footprint, start at $55 a month for a small lineup of channels and
two additional "packs" of specific channels such as sports, kids
and entertainment. Verizon has 5.7 million pay TV subscribers on
FiOS.
The plans come as the industry is slowly reshaping itself in the
face of competition from services that deliver video direct to
consumers over the Internet. Dish Network Corp. launched a service
called SlingTV, and Apple Inc., Sony Corp. and HBO are working on
services that target cord-cutters.
Verizon is also working on an online service, for its more than
100 million wireless subscribers. The slimmer bundles are unrelated
to that service, the carrier has said.
Joe Flint contributed to this article.
Write to Ryan Knutson at ryan.knutson@wsj.com
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