Verizon Communications Inc. (NYSE: VZ) wants to turn the model for payment to creators of premium content on its head. Its proposal is to pay based on the audience that shows and movies produce.
According to The Wall Street Journal:
Verizon Communications Inc. 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.
Verizon, whose FiOS TV is the nation’s sixth-biggest pay-TV provider, with 4.7 million subscribers, has begun talks with several “midtier and smaller” media companies about paying for their channels based on audience size, according to Terry Denson, the phone company’s chief programming negotiator. He declined to identify any of the media companies.
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.
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