Ever so slightly pulling up the veil on the pay-TV industry's shrouded program licensing deals, top pay-TV executives have agreed with Verizon's assertion that operators have the contractual leeway to at least conduct limited experiments with "skinny" bundles.
Speaking to Reuters, Cox Communications CFO Mark Bowser said existing contracts with major programming conglomerates call for top channels to be distributed across at least 85 percent of the operator's video subscriber base.
That gives you "15 percent that you can work with," Bowser told the news service. "What we are all trying to do is figure out how we do that in the confines of the current agreements."
"We can do packages within the current rights we have," concurred Neil Smit, CEO of Comcast Cable (NASDAQ: CMCSA).
The disaggregation of major channels from their smaller siblings into programming packages that are more economical for pay-TV consumers has been a hot topic of late in the pay-TV industry.
While products like Dish Network's (NASDAQ: DISH) new OTT service, Sling TV, offer inexpensive, narrow selections of channels, it was Verizon that really kicked off the debate last month, introducing a new skinny bundling strategy for its linear FiOS service.
Disney and its ESPN unit have sued Verizon (NYSE: VZ) over its Custom TV product. Verizon CFO Fran Shammo notably asserted that existing program licensing contracts enable Verizon to pursue it.
Speaking to investors Monday during Dish's Q1 earnings call, the satellite operator's chairman and CEO, Charlie Ergen, said Verizon's bold move "may have been the way I handled it five years ago. I wouldn't do that today."
He added that pay-TV operators and content providers need to cooperatively work to develop program packaging that appeals to consumers in a more a la carte-oriented era.
For more:
- read this Reuters story
Related links:
Shrinking cable bundles may entice users, but operators and programmers remain concerned
Ergen: Sling TV 'not as good as it needs to be technically'
CBS Sports (voluntarily) joins Verizon Custom TV lineup
ESPN sues Verizon over 'Custom HD' bundle