UPDATED with Fuse’s loss of carriage on Verizon Fios.
Comcast and Verizon Fios are dropping Fuse, the music cabler owned in part by Jennifer Lopez, raising questions about the independent channel’s future as a linear cable offering.
Fuse blasted Comcast on Sunday for the decision, asserting that it “met Comcast’s financial demands and no other requirements were ever communicated to us.” Comcast said its subscribers were notified of the change some weeks ago. It’s unclear how many subscribers Fuse, which targets young, urban viewers with music and lifestyle programming, will lose from Comcast, the nation’s largest MVPD.
On Monday, Fuse disclosed that it would also lose carriage as of Jan. 1 on Verizon Fios.
Fuse reached about 74 million cable households a few years ago but was down to about 60 million as of February of this year, according to Nielsen. Comcast has a total of 22 million video subscribers. The loss of Verizon Fios coverage will cost Fuse distribution in the low single digits from its 60 million base, Fuse said.
Fuse president-CEO Michael Schwimmer on Sunday signaled the start of an effort to put PR pressure on Comcast for dropping one of the few sizable independently owned channels in the U.S. cable landscape. Comcast’s status as the No. 1 cable operator and broadband provider makes it vulnerable to attacks from watchdog groups. Schwimmer was quick to mention the Justice Department’s history of anti-trust oversight of the conglom stemming from its 2011 acquisition of NBCUniversal.
“By removing our network from its consumer offering, Comcast is silencing yet another independent media company, in this case one that is devoted to providing a platform for inclusive voices and authentic representation at a uniquely important time in our society,” Schwimmer said. “A commitment to diversity is an enduring value, not a politically expedient card for Comcast to play until such time as consent decrees or business objectives no longer require it. Comcast’s behavior leading to its decision to drop Fuse reveals an agenda inconsistent with their public statements, giving further credence to the merit of ongoing DOJ oversight.”
On Monday, Fuse Media faulted Verizon for offering terms in a new contract that were “unacceptable” to Fuse Media.
“This is another instance of one of our nation’s largest telecommunications companies taking action inconsistent with its public posture regarding diversity,” Fuse said in a statement. “While claiming to be committed to supporting customers from underserved communities, Verizon Fios is removing unique content programmed to the passions and values of the large and growingmulticultural millennial audience.”
For the past seven years, Comcast has had to operate its cable systems under behavioral restrictions established in exchange for federal approval of its NBCUniversal purchase. But the company’s consent decree with the Justice Department expired in the fall. Despite lobbying by Comcast rivals, the Justice Department is not believed to have taken any steps to extend that oversight.
Comcast’s axing of Fuse comes as all of the major traditional MVPDs are taking a hard line with programmers to prune their lineups of underperforming niche channels. The traditional cable and satellite TV business is under extreme pressure from Netflix, Amazon and the new breed of low-cost streaming channel bundles offered by YouTube TV, Hulu and others.
“Comcast carries over 160 independent networks and more than 100 networks geared toward diverse audiences, including multiple networks owned or operated by minorities,” Comcast said in a statement. “In this case, much of the content carried by Fuse is similar to content that also is available on other networks, such as BET, BET Her, TV One, Bounce TV and Pop. We also are launching two new African American majority owned networks, Afro and Cleo TV. We understand that some customers may find Fuse’s programming of interest, and we will work with them to find options that will help them continue to watch other content like this programming.”
Verizon echoed Comcast’s sentiment in a statement issued Monday. Verizon Fios serves about 4.5 million video subscribers in the U.S.
“At Verizon, we put our customers first in all of our content decisions. Our priority is always to provide the content our customers want at a fair price,” the company said. “Because the cost of programming is the single biggest factor in higher TV bills, we carefully review proposals from content providers to ensure that the rates they propose are in line with their viewership.”
Fuse launched in 1994 as a music cabler owned by Cablevision, the former New York cable giant. Lopez came into the picture in 2014 when her NuvoTV channel bought Fuse for $226 million and merged operations under the Fuse banner.
The company is known to have been on the block for some time. But a single niche-targeted ad-supported channel dependent largely on cable carriage for revenue is a hard sell at a moment of major transition for the pay TV eco-system.
Lopez bought into NuvoTV in 2012. That company was formed on the back of Si TV, the groundbreaking Latino-focused cable channel launched by producer-entrepreneur Jeff Valdez in 2004.
(Pictured: Wilmer Valderrama on Fuse’s telecast of the 2018 ALMA Awards)