Verizon has inked a long-term deal with Disney to provide programming for FiOS TV, the telephone carrier's newborn video subscription service; Fox might be next.
Telephone carrier Verizon announced today it has signed a long-term agreement with the Walt Disney Company to provide programming for Verizon’s nascent video and television service FiOS TV, which it plans to start offering in Keller, Texas this week and to as many as three million customers by the end of 2005. FiOS TV’s expanded basic programming will include Disney services ABC Family, ABC News Now, Disney Channel, Toon Disney and SOAPnet, as well as seven ESPN channels. Verizon will also be able to retransmit content of ABC’s owned and operated stations under the agreement.
Next on tap for FiOS TV? Rupert Murdoch’s News Corp: while a deal hasn’t yet been formalized, Verizon expects FiOS to carry leading Fox channels such as FX, Fox News, and the Fox Network when the network officially launches.
FiOS TV will be an adjunct offering to Verizon’s high-speed Internet service, and will represent Verizon’s bid to compete in the television market against cable and satellite television providers by moving television content over the telephone company’s high-speed fiber optic network directly to customers’ homes. Regional telephone carriers have been attempted to gain footholds in the high-margin video business for some time, but have largely been stymied by licensing and regulatory restrictions which require would-be operators to acquire permits and licenses in thousands of cities and municipalities. While the regulatory environment is not improving from Verizon’s point of view, the company intends to roll out FiOS TV as quickly as possible, hoping to gain momentum in locales where Verizon offers phone service and broadband Internet access through service and subscription packages.
Given that FiOS TV’s content is delivered digitally, it’s not surprising that the primary concern expressed in today’s Verizon/Disney announcement is that Verizon and Disney will cooperate to prevent copyright infringement of Disney’s material over the Internet, while simultaneously protecting the privacy of FiOS TV subscribers. Verizon will play the heavy, tracking alleged piracy of Disney material without disclosing customer information unless required to do so by subpoena. We’ll see how that works out.
