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Verizon announced a new deal with the Disney on Wednesday that will bring a number of the entertainment companys television properties into the carriers upcoming FiOS TV service.
Under the long term pact, the financial details of which were not released, Verizon Communications Inc. will carry 12 Walt Disney Co.-owned television services on FiOS TVs expanded basic package, including ABC Family, ABC News Now, Disney Channel, Toon Disney, SOAPnet and a range of ESPN sports channels.
The partnership also covers several Spanish-language channels to be made available through Verizons Hispanic expanded basic and Hispanic tier FiOS TV packages.
As part of the deal, Verizon, based in New York, will also be granted retransmission consent for all of ABCs owned and operated television stations, along with an array of video-on-demand content, and some pay-per-view ESPN properties.
FiOS TV is Verizons soon-to-be released video offering that will be delivered via the companys new all-fiber network.
Positioned as a competitor to existing cable and satellite TV services, the company is betting that it can lure customers by packaging the video with broadband Internet and voice offerings.
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The services will be transmitted on the companys fiber-to-the-premises (FTTP) broadband network, which is being launched in half the states where it currently offers landline communications services.
The carrier has already announced similar content deals with NBC Universal Cable, Starz Entertainment Group, Showtime Networks, A&E Television Networks, Discovery Networks and the Soundtrack Channel.
Verizon is one of only a handful of companies aggressively looking to offer a set of consumer services including voice, cable and broadband Internet, over its networks.
On a national level, its only clear rival in the space is Philadelphia-based Comcast Corp., while firms including Cablevision Systems Corp., Cox Communications Inc., RCN Corp. and Time Warner Inc. harbor similar plans on a regional basis.
It is also worth noting that Comcast attempted to buy out Disney in 2004.
In addition, Verizon maintains close ties with its former Verizon Wireless subsidiary, which claims over 47 million voice and data customers across the U.S., through which it could conceivably add mobile services to its array of packaged services offerings.
Industry watchers said that deals such as the Disney partnership will allow Verizon to offer a more compelling range of content offerings, but said that just how widely the packaged services will become available remains the biggest question in its plans.
Maribel Lopez, analyst with Forrester Research, Cambridge, Mass., said that despite those questions, there is a looming collision between Verizon and cable providers as they begin offering competing bundled services.
“From the consumers standpoint, this trend is a good thing because there are now more providers in the space, and that will create price competition, which is what people are looking for,” Lopez said. “Verizon is positioning itself as an alternative to Comcast, which is positive, as Comcast charges premium prices.”
Despite her belief that such packaged communications services will appeal to greater numbers of consumers as prices come down, Lopez said that the ability for Verizon to tap into Verizon Wireless customer base hasnt yet become a major advantage.
“That idea may be a bit overrated,” she said. “Telcos see it as a huge advantage, and to the extent that they can create a universal services control plane where people can integrate, home phone, mobile, broadband and TV technologies, theres value there. But, its a short term advantage that can be copied, as Comcast could strike a deal with T-Mobile or Sprint.”
Next Page: Verizon will also enforce copyright infringement of Disney content.
Verizon Will Also Enforce
Copyright Infringement of Disney Content”>
Verizon and Disney, which is headquartered in Burbank, Calif., also agreed to cooperate around enforcement of the U.S. Digital Millennium Copyright Act to help curb infringement of Disneys copyrighted works over the Internet.
Through that part of their agreement, Verizon said it will forward and track notices to any subscribers allegedly engaged in unauthorized distribution of Disney content.
The carrier said it would not turn over subscriber information to Disney, but said it would provide subscriber data pursuant to lawfully served subpoenas, or terminate Verizon Internet service, for people who have infringed Disney copyrights and received multiple notices.
“This is a significant step forward in the effort toward inter-industry cooperation in addressing the serious problem of copyright infringement over the Internet,” Ivan Seidenberg, chief executive of Verizon, said in a statement.
“At the same time, Verizon continues its commitment to protecting the privacy of its subscribers, and only providing information in response to subpoenas properly issued by the courts.”
Seidenberg also repeated his call for economic and broadcasting regulatory changes that would “encourage investment and innovation” in modern communications, on Wednesday.
Speaking at an event in New York, the executive reiterated his belief that there is a need for “an end to unnecessary barriers to capital investment, starting with video franchise reform” and for federal and local tax policies that promote investment in next-generation communications networks.
One of Seidenbergs primary contentions is that existing franchising laws are deterring its ability to build out the FiOS network.
In the case of New York, he said that laws dating back to the earliest days of cable TV require companies to obtain a franchise in each local community before offering television service.
That reality is hindering Verizons ability to create services offerings that bundle television, voice and Internet capabilities, according to Seidenberg.
“We already have the network to provide voice and data,” Seidenberg said. “Now we have to go through an additional process in each individual town just to provide video over the same pipe. It makes no sense.”
Verizon hopes to offer FiOS TV in New York early next year, and argued that it has already obtained less restrictive franchising permissions in Texas, California, Florida and Virginia, where it plans to launch the service this year.
“Were making progress in getting the franchises we need. But we think this could go faster—and the benefits of video competition could come quicker—if we could reform the whole franchise process,” Seidenberg said.
“Were not talking about doing away with local franchise fees or local content. But we do need a broader, more streamlined solution to this issue if were going to clear the path for technology investment and innovation in video.”
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