Verizon  will be increasing the price of its FiOS video service to new subscribers beginning next year.
Starting Jan. 20, Verizon’s FiOS Premier TV subscription rate is slated to increase by $5, to $47.99 per month for new subscribers. Last year, Verizon raised the price by almost $3, to $42.99.
According to a Verizon spokesperson, subscribers who signed up in the last two years will see their rates increased to this year’s price level of $42.99, but customers who subscribed in 2007 will not see their rates change. Customers who do not have a bundle contract can lock in the 2007 FiOS TV price of $42.99 by signing up for a 12-month or 24-month bundle.
An e-mail from Verizon said the price increase was “not a cable TV-like annual rate hike,” but some media outlets reported that the new price was the result of higher programming costs, and the result of having to pay for the build-out of the fiber-to-the-home (FTTH) network.
One of the reasons put forth for the granting of statewide franchises by Verizon and AT&T  was that the competition between the telcos and cable operators would drive prices down for consumers, but Verizon’s price hike seems to indicate that it does not want to get into a price war with MSOs.
Verizon currently sells its video service in 12 states, and the telco had 717,000 subscribers as of the end of September.
Verizon has expanded its promotions recently, including one that offers a free Sharp  Aquos HDTV set for triple-play subscribers in some areas of its footprint. The company recently announced that it anticipates having 150 HD channels by the end of this year, with 60 new HD channels within the next few months.
Verizon is looking to sweeten its triple-play bundle in order to win over customers from cable operators.
At last month’s TelcoTV conference, Tricia Lynch, Verizon’s VP of programming acquisitions, said Verizon has 10,000 VOD titles, compared with Comcast’s  9,000.
Verizon is targeting 1,000 HD VOD titles across all categories (movies, subscription and free content) by next year, and dynamic ad-insertion trials are slated for the first half of 2008, as well, with rollouts scheduled for the latter half of the year.
Lynch said Verizon’s goal is to not only take the best of what cable has to offer in the VOD space, but to also exceed it. On that note, Verizon plans to launch free movies within the next few months once it completes pending deals with several major studios.
VOD is also an important component of the bundle, Lynch said, and Verizon is working on similar platforms across its linear and VOD video services, as well as its high-speed data and mobile offerings.
In other Verizon-related news, the company was granted a video franchise on Monday from the Pelham Manor, N.Y., board of trustees. Pelham Manor is located in Westchester County, and the approval by the board brings the total number of New York City-area communities that have approved video franchises for Verizon to 73.