NBC and Fox join pushback parade on Verizon's 'Custom HD' bundling

NBCUniversal and 21st Century Fox became the latest programmers to push back on Verizon FiOS' bold new skinny program bundling strategy.

"We reject Verizon's (NYSE: VZ) view that it can pursue the new packaging scheme it announced yet still comply with our agreements," Fox said in a statement, referring to the inclusion of Fox Sports 1 in the Custom HD "Sports" package.

Added NBCU: "Verizon's announced 'Custom TV' package does not comply with our existing agreement."

The two programming conglomerates join Disney/ESPN in dissent. Earlier this week, ESPN issued its own statement, saying it didn't consent to the new Verizon strategy, either.

Meanwhile, the New York Post quoted an unnamed media executive, who called the strategy "a bit of a sham, a way to get the phones ringing. They won't let everybody take it. There is no way the programmers are going to let Verizon punch through."

On Sunday, Verizon rolled out a new offering for customers, letting them more precisely pick and choose the networks they want on their FiOS service. For $54.99, FiOS subscribers signing onto Custom HD get 35 basic channels, which includes broadcast networks. They also get to choose two from a gaggle of seven add-on packages themed around sports, kids, lifestyle, news, entertainment and more sports.  

"We believe we're able to offer these packages under our existing contracts," said Fran Shammo, executive VP and CFO of Verizon, when asked during Tuesday's first-quarter earnings call whether his company had discussed the strategy with programmers prior to deploying it.

Programmers are understandably not thrilled with the arrangement, given that smaller channels are separated from bigger siblings under the arrangement, suffering a hit in audience reach. For example, a FiOS subscriber can now get ESPN without also paying for Disney XD.

For more:
- read this Los Angeles Times story
- read this New York Post story
- read this Washington Post story

Related articles:
Verizon's Shammo: We believe our 'existing contracts' allow skinny bundles
Disney/ESPN says it didn't consent to Verizon plan to break up bundles
Verizon FiOS will debut skinny bundle that rivals Sling TV