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Verizon Remains an OTT Video Spectator for Now

21 Oct, 2014 By: Erik Gruenwedel

Chief executive Lowell McAdam vague on telecom’s plans for OnCue, the Internet-based TV platform acquired earlier this year from Intel Corp.

With HBO and CBS throwing their hats into the burgeoning subscription streaming business, Verizon Communications, for the moment anyway, appears to be in no rush to deliver video content directly to consumers over the Internet.

The telecom earlier this year acquired the assets of Intel Media, whose IP property included OnCue, an Internet-based TV platform. Scuttlebutt suggested Verizon was planning to launch an over-the-top video service — speculation management neither denied or endorsed.

At the time of the acquisition, McAdam said Verizon’s extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile underscored the telecom’s ability to integrate delivery of video products and services to better serve audiences on a wide array of devices.

When asked nine months later during Verizon’s third-quarter fiscal call about the status of OnCue, McAdam spoke in generalities, lauding OTT as a great plus for the multichannel video program distribution business model.

“As we said before we’re having discussions with a lot of content providers around innovative models going forward and I think … it opens up a lot of doors and it’s something optimistic for the future of the video business,” McAdam said.

Yet with Amazon Prime Instant Video reportedly spending $2.5 billion on original and third-party content this year — a figure more than matched by Netflix’s $1.2 billion increase in content spending in Q3, Verizon may just remain on the sidelines.

Meanwhile, the telecom added 162,000 net new FiOS Internet connections and 114,000 net new FiOS Video connections in Q3 (ended Sept. 30). Verizon had totals of 6.5 million FiOS Internet and 5.5 million FiOS video connections at the end of the period, representing year-over-year increases of 8.8% and 7%, respectively.

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