2015 has been characterized by major lucrative pay-TV deals so far. Verizon Communications Inc. (NYSE:VZ) recently added to that list, probably topping the list through its new clever pay TV package. The new service is in a public relations headlock with ESPN.
Verizon made the announcement a week ago. The new package will include a standard channel package made up of 45 channels. The standard package is inclusive of four broadcast TV channels for a total of $54.99 payable as a monthly subscription. FiOS subscribers can also get an additional two sets of channels that are categorized according to the genre such as Sports, News, entertainment, lifestyle, among others. Subscribers can boost their subscription with each additional pack for an extra $10 for each package every month.
The controversy with ESPN is because of Verizon’s decision to exclude various sports channels from the base package. The exclude channels include Fox Sports, ESPN, ESPN2, Regional Sports Networks and NBC Sports Network. The affected Sports networks immediately responded to the decision following the announcement. The networks complained that the decision was against the initial contractual agreements for them to be included in the base package.
ESPN filed a lawsuit against Verizon on Monday on the grounds of breaching a contract. The lawsuit was forwarded to the New York Supreme Court. Analysts say that Verizon did not have any right to change the terms of the contractual agreements without the formal consent of the complaining party.
The decision by Verizon was probably fueled by the fact that making such alterations would give it a competitive edge with other existing major pay TV vendors. Ideally, placing the sports channels in the additional package would prompt more users to subscribe to subscribe to the extra packages. This would boost the level of profits for Verizon and thus giving the company more competitive advantages.
Verizon Communications Inc. (NYSE:VZ) might have chosen to remove the sports channels from the list so as to give the subscribers variety. Not every subscriber is a fan of sports. Thus, the diversity could be useful in giving subscribers more control over their selection.
