By Ryan Knutson
Verizon Communications Inc. said Thursday that Walt Disney Co.
and 21st Century Fox are refusing to carry some 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, Comcast Corp.'s NBCUniversal and 21st
Century Fox said such packages were a violation of their existing
contacts.
Disney and Fox refused to carry Verizon's ads in the New York
market, Verizon said. NBC hadn't pulled its ads for Verizon's new
offering as of yet. Disney didn't reply to a request for comment.
Fox declined to 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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