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Verizon Eyeing Cloud-Based Video Jukebox

20 May, 2014 By: Erik Gruenwedel

Verizon CEO Lowell McAdam

CEO Lowell McAdam envisions transitioning FiOS TV to broadband provider

Verizon is working on creating a virtual video “jukebox” that would allow consumers to access content from a cloud-based platform, CEO Lowell McAdam told an investor group.

Speaking May 20 at the J.P. Morgan Global Technology, Media and Telecom confab in Boston, McAdam said Verizon’s purchase of over-the-top video platform OnCue from Intel didn’t signal the telecom’s entry into a linear TV content rights battlefield for a streaming service.

“We don't think that model is particularly attractive because of the overall content cost,” he said.

Instead, McAdam envisions OnCue as a cloud-based option with consumers accessing varying types of unbundled content — including short-form video. The executive said the platform would not bundle third-party content channels, although Verizon is in talks with broadcasters about enabling a-la-carte access to select programming.

Indeed, McAdam said OnCue would act as a virtual video jukebox of sorts, melding aspects of Redbox Instant [Verizon is a co-owner], with transactional VOD and subscription streaming functionality that a consumer could “pull down from the cloud” when they want it, with a much broader array of content — including YouTube-type short-form content.

“I think that is a very attractive model for us. But it can't be the bundled 10 channels together and force users to take it over-the-top, the way they have done in their current linear model,” McAdam said.

He also envisions transitioning FiOS TV from video provider to broadband facilitator — the largest growing segment of the multichannel video program distribution market. Why? Verizon recently leveraged its ISP prowess by inking an interconnection deal with Netflix to enable the latter’s FiOS subscribers faster streaming speeds.

FiOS ended the most-recent fiscal period with 5.3 million video subscribers and 6.2 million Internet subs.

The telecom would like to broaden that Internet prowess through a wider FiOS broadband footprint much in the way AT&T is seeking to do acquiring DirecTV.

“We will have those broadband pipes, and if you think about it, the more traffic that goes into the home, the better for us, because we've got the technology that's future proof, that's easy for us,” McAdam said.

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