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Verizon: Mobile OTT Video Service Will Have Limited Launch

21 Jul, 2015 By: Erik Gruenwedel

Subscribers selecting fewer genres than expected in new skinny channel bundle offering Custom TV

Verizon’s much-anticipated mobile over-the-top video service will be launched (as expected) this summer — but on a smaller scale, CFO Fran Shammo told analysts.

Speaking July 21 on the telecom’s fiscal call, Shammo reiterated that the mobile OTT video service will focus on live news clips, sports and special events.

The unnamed service is aiming for market differentiation by excluding broadcast TV, movies and episodic TV shows — content found on Sling TV, PlayStation Vue, HBO Now and Showtime.

In addition to sports channels, the service will offer DreamWorks Animation’s Awesomeness TV, recently acquired AOL, Vice Media, Scripps Media, Huffington Post, and Tech Crunch, among others.

“We will absolutely be ready to go by late summer. It won’t be the full entire of everything that we contemplate within the product set. It will be an initial launch. And as the year goes on, it will progress,” Shammo said.

“This is a line-up that is around live-play news clips, sports and events. So very different what anyone else is bringing to the market.”

The CFO said Verizon continues to be impressed with its new skinny channel bundle, dubbed Custom TV. In fact, a third of all new FiOS video subs are opting for the package, which offers smaller channel selections priced from $49.99 a month.

“We know we were paving the path to a new path to customers to give them what they want,” Shammo said. He declined comment on the ongoing litigation with ESPN over its inclusion in the skinnier channel bundle.

“We continue to have a great partnership with Disney and ESPN and we will continue to work through that disagreement in our business relationships. The lawsuit will take its own course of action. Again, we believe we are in our contractual rights to offer what we’re offering,” he said.

Shammo said Custom TV has thrived despite being blacked out (by affiliates) advertising the service for 45 days in New York and Philadelphia. Notably, he admitted the number of genres selected is less than “what we expected.” He declined to discuss what channels Custom TV subs are choosing.

“[It] will obviously improve our profitability from a programming standpoint,” Shammo said.

Indeed, skinny channel bundles could be affecting FiOS TV.

Verizon announced it added 26,000 FiOS video subscribers in the second quarter (ended June 30), which was down from 100,000 net additions during the previous-year period. Through the first-half of the year, Verizon has added 116,000 subscribers, down from 157,000 additions last year. Verizon ended the quarter with 5.6 million video subs.


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