Verizon isn’t a company that we normally think of as a champion for consumers. However, it deserves a good deal of credit recently for its bold decision to start offering its FiOS customers slimmer bundles of channels that may or may not include ESPN on them. As Re/code reports, ESPN has now sued Verizon for allegedly violating its agreements to not break up its channels into smaller bundles. While ESPN may very well be in the right legally, I still can’t help but root for Verizon here.
The reason for this is because ESPN has been one of the biggest reasons why our cable TV bills have gone up so quickly. In case you didn’t know, ESPN last year charged cable companies an astronomical $6.04 per subscriber for the rights to broadcast its content. For some perspective consider that TNT charges cable companies the second-highest amount of money and it was only an estimated $1.48 per subscriber.
People who don’t watch a lot of sports are getting tired of having their cable prices go up every year because ESPN demands ever-higher royalties. This is the main reason why Verizon decided to break up its bundles and offer viewers smaller packages that don’t include ESPN. ESPN obviously doesn’t like this because it means fewer viewers will have it in their bundles, which means it will make less in subscriber fees.
As I mentioned earlier, ESPN may have a good case against Verizon here — I have no clue how the language in its contract with FiOS is worded, but it wouldn’t shock me if ESPN covered its bases by insisting Verizon swear off breaking up its established bundles.
That said, as someone who has wanted to see more consumer choice in terms of which programs we pay for, I hope Verizon prevails. And if ESPN thinks the old bundled cable channel business model can be sustained, it’s in for a rude awakening.