Verizon Says Disney Refusing To Run Ads For Its New TV Service

By Ryan Knutson 

Verizon Communications Inc. said Thursday that Walt Disney Co. is refusing to carry advertisements for its slim new cable packages, as the battle heats up over the traditional bundle of channels that has underpinned the profitability of pay TV.

Verizon's new service breaks apart the one-size-fits-all package of hundreds of channels and lets subscribers pay less for smaller slices that are organized around interests like sports or kids' shows.

The service and the ads launched Sunday. After Verizon unveiled its plan last week, Disney, NBCUniversal and 21st Century Fox said such packages were a violation of their existing contacts.

So far, Disney is the only company refusing to carry Verizon's ads. Neither Fox or NBC have pulled ads for Verizon's new offering as of yet. Disney didn't reply to a request for comment.

Verizon Chief Financial Officer Fran Shammo told The Wall Street Journal on Tuesday the carrier would forge ahead anyway.

"We have launched the product, we are not retracting it, and we believe we are in our legal rights to launch it," he said.

Verizon's new plans, available only to customers within its FiOS footprint, start at $55 a month for a small lineup of channels and two additional "packs" of specific channels such as sports, kids and entertainment. Verizon has 5.7 million pay TV subscribers on FiOS.

The plans come as the industry is slowly reshaping itself in the face of competition from services that deliver video direct to consumers over the Internet. Dish Network Corp. launched a service called SlingTV, and Apple Inc., Sony Corp. and HBO are working on services that target cord-cutters.

Verizon is also working on an online service, for its more than 100 million wireless subscribers. The slimmer bundles are unrelated to that service, the carrier has said.

Joe Flint contributed to this article.

Write to Ryan Knutson at [e-mail]

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