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Economy & Business

Verizon Announces Changes To Its Cable TV Service

AUDIE CORNISH, HOST:

Today, Verizon became the latest company to respond to the changing ways we're watching television. Verizon announced its customers will soon be able to buy pared-down versions of its FiOS TV offerings for less money. NPR's Yuki Noguchi reports this is part of the evolution towards more consumer choice in video.

YUKI NOGUCHI, BYLINE: The top-end plan offered by FiOS today includes over 420 channels. But according to a Nielsen survey last year, the average TV consumer generally watches only 17 channels. So, Verizon is revamping its offering into what it calls Custom TV. This service is not an a la carte offering where consumers can pick individual channels. Instead, there's a basic package which includes about three dozen channels, including CNN, AMC and the Food Network for $55 a month. For an additional $10 a month on top of that, different packages of channels may be added, such as sports, lifestyle and kids. Verizon's top brass has been hinting the company would make such a move for some time. Last year, the company's CEO acknowledged the television market was moving toward a model that gave consumers more choices. Bill Menezes is principal researcher at Gartner. He says Verizon had little choice but to make this kind of change.

BILL MENEZES: There needs to be more choice than there was in the old days because there are a lot of other options out there.

NOGUCHI: That is, options outside of the usual cable and telecom offerings. In addition to Netflix, Hulu and Amazon Prime, networks like CBS and HBO now offer stand-alone online streaming subscriptions for their content. Showtime is also launching a subscription service. And that, Menezes says, is a sea change in a business where HBO and Showtime were cornerstones of the premium cable package for many years. He himself is a good example of how consumer behavior is adapting.

MENEZES: Last year, we scaled back to a basic cable package because we determined that a lot of our viewing was going to be covered by a combination of Netflix and Amazon Prime instant video. And, so far, so good.

NOGUCHI: He says this trend will become more pronounced in coming years. Most younger consumers in their teens and 20s might have grown up with Netflix. They have no experience buying large packages of bundled TV channels. Verizon says the plan will be offered to new and existing customers starting Sunday. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.