CFO: Verizon OTT Video Service to Focus on Live Content19 May, 2015 By: Erik Gruenwedel
Verizon’s summer launch of an over-the-top video service will focus on live programming, including news, sports and related entertainment programming, CFO Fran Shammo told an investor group.
Speaking May 19 at JPMorgan Global Technology, Media and Telecom Conference in Boston, Shammo said the unnamed service would be a departure from TV Everywhere platforms that require an authenticated pay-TV subscription.
“We are going for rights of content outside the home that has nothing to do with inside the home. If you want to take it to your home you can, but you don’t have to and you don’t need to own anything in your home to enjoy this content externally,” Shammo said.
Unique to the service is that Verizon isn’t following paths taken by Netflix, Amazon Prime Instant Video and Hulu Plus licensing programming such as TV shows and movies — original and third-party.
Instead, Verizon will incorporate technologies — such as EdgeCast, UpLynk, OnCue and Verizon Digital Media Services — acquired over time to deliver video content via mobile devices through both ad-supported and data-driven platforms.
Earlier this year, Verizon held exclusive rights to stream the Super Bowl to mobile devices via multicast technology that didn’t tax end-user data caps or network bandwidth. The telecom plans to stream content targeting the most-efficient distribution channel to consumers, i.e. multicast, pay-per-view and subscription.
Indeed, Verizon’s decision to acquire AOL revolved a lot around the latter’s ad-tech platform enabling insertion of advertising, in addition to unique content from The Huffington Post and TechCrunch, among other sources, according to Shammo.
“It’s not [about TV] episodes, you’re not going to sit down and watch an episode of ‘CSI’ with this [OTT service]. This is unique live real-time type content,” he said.
Separately, Shammo reiterated Verizon’s belief it has the legal authority to slice and dice bundled channel packages to pay-TV subscribers. The company recently bowed Verizon FiOS Custom TV, which offers a reduced channel bundle with separate sports and entertainment packages.
Disney-owned ESPN sued Verizon in response, claiming the sports network could not be offered independently from a bundled channel offering. Verizon is testing the marketplace in order to re-bundle channels, get a better price for the consumer, a better price from a content perspective and create stimulation in the marketplace, according to Shammo.
“If you're paying for content of 300 channels and the customer is paying you for 300 channels and you're only watching 17, that's probably not a good model,” he said.