Frontier Communications has become the latest telecom to retrench from the traditional pay TV business and simply offer a third-party virtual MVPD service to its subscribers to what is now its core service offering, broadband.
Philo, which offers a bundle of 59 entertainment-themed channels—no broadcast networks, or sports or news—for an industry-low $20 a month—announced this week that both Frontier and cable company WideOpenWest will offer its service to its broadband-only customers.
Frontier paid Verizon $10.54 billion in 2016 for Fios assets in California, Texas and Florida. But less than four years after that deal closed, Frontier seems to be content with rendering its Fios service a single-play offering.
Frontier’s pay TV subscriber base shrunk to below 700,000 at the end of the third quarter. And like virtually all other North American pay TV operators, the company faces a virtuous cycle—the more its customer base for TV shrinks, the less bargaining power it has to push back against programmers in licensing negotiations.
This downward trajectory has most small and mid-sized telecoms looking to third-party OTT services. Providing a video solution is crucial to packaging what is now their core business, broadband. And bundling ready-made live-streaming services like Philo has become a hot trend.
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