This week the folks at Verizon have had a bit of a revelation: instead of paying media companies a flat fee for their television channels, make the payment based on real viewership. In this way, companies that deliver a channel that has no popularity at all will not have to be payed as much while the top-tier companies will get payed monster amounts of cash. This model is rather similar to how Spotify works, having you the user pay a flat fee and listen to whatever you like on their service, the artists whose tracks you listen to getting cash per listen accordingly from the company.
It was Verizon chief programming negotiator Terry Denson who spoke up this week with the Wall Street Journal. There he noted that at this very moment, Verizon was in talks with “midtier and smaller” media companies to see if a payment based on audience size model would work for them. Speaking on the model in play today, Denson said: “we are paying for a customer who never goes to the channel.”
The model in play today has Verizon (and other cable and satellite television operators) paying media companies an amount based on the number of homes their service goes to. If the channel is available through their service, Verizon will have to pay based on the amount of homes they push their service to – regardless of how many people actually watch the channel. With new person-tracking technologies in play, Verizon is thinking about using the number of people actually tuning in to create a whole new model.
As Denson notes, the current talk puts viewing time at five minutes minimum to register as having actually visited a television channel. This unique viewing setup would have odd channels that’d otherwise not get a massive amount of cash in a lump-sum deal to really ramp up their earning potential with ad campaigns and must-see-tv pushes across the web.
The same as Spotify artists tell their fans to head to Spotify and give them a listen, so too will media companies tell users to head to Verizon to watch their shows. It won’t be quite so simple as all that until installing a television system is as easy as installing an app – but we can dream!
Meanwhile we’ll keep an eye out for this new television payment model and will let you know if the costs and benefits will ever be passed on to you, the consumer. At the moment it appears that they’ll be keeping your bills the same – the future could very well be knocking some real bills off the top rack.