Verizon (Fios TV) wants to change TV fee rules based on audience size

[jefferiestubes8]

Verizon who owns FiOS TV is

proposing to shake up the pay-television business based on a simple premise: it wants to tie the fees it pays to carry TV channels to how many people actually watch them.

Under existing arrangements, distributors like cable and satellite operators pay a monthly, per-subscriber fee to carry channels based on the number of homes in which they agree to make the channels available, regardless of how many people watch those channels. "We are paying for a customer who never goes to the channel," Mr. Denson said.

Mr. Denson said that for the companies with which he has negotiated so far, his plan has been a "head-scratching thing" because "it's such a disruptive model." Discussions are "inching forward," he said.

The executive said he hasn't yet raised the idea with big media companies, which own most TV channels, but he planned to bring it up with them as contract renewals roll around. He acknowledged that it would be difficult to persuade the big companies to get on board and "just go cold turkey."

Verizon Seeks to Shake Up Fees for TV Channels
FiOS Operator Presses Smaller Media Firms for Deals Based on Audience Size

via

The company wants to pay providers not by the subscribers they can reach, but by the number of people who actually watch a show.

Going away from the Nielsen model will take time. Years.
Advertisers already pay for C3 (Live+3 days) of DVR time-shifting viewings.

Walt Disney, News Corp., NBC Universal and CBS Corp. for a new system that would expand the currency of the business. Instead of counting the audience for commercials over the first three days from a program's original showing, the standard known as C3, networks are increasingly agitating to include audiences for commercials over seven days, a standard called C7.

source

The broadcast networks have seen seven-day DVR viewership shoot up this season. Last year 77 percent of broadcast viewing was live; this year it’s down to 71 percent. More people have DVRs now than last year at this time, 47 percent versus 43 percent, which explains some of the gains. People are also getting more comfortable with time-shifting. But another factor to keep an eye on is the rise of video on demand viewing, a function provided by most satellite and cable providers. If a VOD show contains the same commercials as the original broadcast, it can count toward the Nielsen rating. Most notably for advertisers, the fast-forward function can be disabled on these broadcasts so that viewers are forced to sit through the commercials. Networks may start pushing harder on VOD because it is measurable, unlike tablet and mobile viewing.

What we know from early data Nielsen is collecting is between 3 and 5 percent of time shifting is coming from VOD in the first three days, and about 10 to 15 percent in the first seven days. So that means more is coming from that four to seven days, which is not what we see in the regular time-shifting trends.

sourceJust going to C7 will take time. Small media companies will be doing that and we'll see what happens when their new contracts run out with Verizon. You can bet these new small media company contracts will include VOD.

While this is mainly a cable provide fee thread it is not quite related older thread that is an overall long term plan:
a la carte programming - TV

[Spot's Meow]

There are still 71% of viewers watching a show live? Who are these people?? I don't think I know anyone who doesn't DVR shows and watch them later to avoid commercials.

[Temis the Vorta]

Since the point of broadcast TV is to show ads, that 71% is the whole audience to broadcast (minus anyone outside the 18-49 age group of course).

Whoever they are, they're not the same people as those who are likely to hang around TrekBBS. Broadcast TV is being made for Not Us. Which I guess explains why I've given up on it entirely.

Anyway, Verizon isn't going to pass the savings on to their customers, they're in it for themselves. Anyone who wants to reduce their bill via a la carte pricing already has the Netflix option. Works great (assuming your country has Netflix by now.)

[Guy Gardener]

Spot's Meow wrote:

---

There are still 71% of viewers watching a show live? Who are these people?? I don't think I know anyone who doesn't DVR shows and watch them later to avoid commercials.

More proof that all your friends are a better class of people, which means by association, that you are a better class of people too.

Even if your post 20th century errant eccentricities are contributing the to ruin of the financial mechanisms that support the classic American Industrial Military Supercomplex.

[M'rk, son of Mogh]

If I'm around, I watch a show live, if I miss it, I don't. I don't find commercials a big deal, I use them to multitask.

But I'd much rather watch a show as it airs, otherwise it seems like it takes me forever to catch up the busier I get. The whole "I have it recorded, I can just watch it later" mentality that keeps pushing things away.

[Caretaker]

Weekdays I work a schedule where I don't get out of work until 8-9 (eastern) and by the time I get home it is 8:45-9:45. Recording shows to watch later is really my only option. But I'm also not a Nielsen family member. So my single white makle between the ages of 18 and 39 opinion doesn't count.

M'rk - I agree. That is a problem for me, too ("I'll watch it later", but sometimes I don't have the time to do so).

[Snaploud]

DVR is one of my favorite modern inventions. It's really quite liberating to be able to watch a show when I want and not have to worry about missing episodes (due to other priorities, tv schedule changes, hiatuses, etc.). I just set a show as a priority and let the DVR due the work.

[Guy Gardener]

Hands up if you didn't know how to set your vcr timer in the 80s?

BY the 90s I had two vcrs simultaneously programmed and recording with 6 hour video tapes each while I was at work or at university or some woman was making my life difficult by forcing me to enjoy myself by "doing things" or "going places".