Verizon’s already talking to content creators about ways to enable subscribers to access video content nationally. “You could do a wireless over-the-top” — the jargon term for an Internet pay TV service — CEO Lowell McAdam told attendees at the Morgan Stanley Technology, Media & Telecom Conference. “We’re going to work with them and find a model.” That’s been difficult until recently, he says, because many programmers feared that a new service could upset a TV distribution system that’s been lucrative for them. But many now realize that with Internet pay TV “you can get a virtuous cycle” where everybody grows. Verizon took a step toward developing its own wireless over-the-top service in January when it bought Intel’s OnCue platform. “The set top box in an OnCue environment is a little bigger than the tip of my thumb,” McAdam says. Wireless offers Verizon a relatively inexpensive way around its aging copper wire network at a time when he sees signs of video cord cutting. A few years ago his FiOS fiber optic service signed up an equal number of broadband and video customers. “Now we’re seeing significant divergence. People are buying a lot more broadband.”
Netflix has complained that its transmissions to Verizon broadband customers have been slowing — but McAdam says that should be resolved soon with a Netflix payment arrangement similar to the one it just cut with Comcast. “I’ve spoken live and via email with [Netflix CEO] Reed Hastings and … Read More »
For some strange reason, I thought at least one Big Media mogul would use this week’s UBS Annual Media and Communications Conference to reset investor expectations about the Industry. I waited for someone to say that it’s time for execs to stop licking their wounds from the last decade’s disastrous mergers and recessions and to start launching dynamic job-creating initiatives. I even expected someone might hint at a transformative deal that would expand the digital world’s supply of quality news and entertainment. The timing seemed right for all of the above since most of the CEOs noted that their companies are flush with cash and expect much more to flow their way in 2012, especially from the quadrennial advertising jolt provided by political campaigns and the Olympics. (Forecasters said that total domestic ad sales will be up anywhere from 3.2% to 4% in 2012.) Instead, the moguls mostly ladled out the same thin gruel they delivered throughout this year including their last round of earnings calls. They’ll collect additional revenues by syndicating content to digital streaming services. Or by demanding retransmission consent fees from pay TV providers. And returning cash to investors through dividends or share repurchases. hard to work up enthusiasm about such unimaginative strategies.
While the overarching themes of this year’s conference sounded a lot like last year’s, there was one important difference: Big Media isn’t afraid of Netflix anymore. At last year’s confab, moguls wondered publicly whether they should license TV shows and movies to the fast-growing company that seemed … Read More »
Web site TechCrunch appears to have filled in a key missing piece to the reports this week about Verizon’s plan to launch a digital service for movies and TV shows: The site says that much of the content would come from a partnership with Redbox. Beginning on May 28 the companies will offer consumers opportunities to buy credits that they could use to buy or rent videos online — or rent DVDs from Redbox’s popular $1.20 a night kiosks, the site says. It adds that the companies are “still in talks with content providers” and won’t seek to beat rivals in offering the newest releases. The video service would offer standard definition and HD streams and would work on the most popular digital platforms including Apple’s iOS, Google’s Android, Xbox, and Roku boxes. Investors are impressed by the information about the planning being done under the code name Project Zoetrope: Shares of Redbox’s parent, Coinstar, are up 7.9% on a lousy day in the market. The information jibes with Coinstar CEO Paul Davis’ statement to analysts in October that his company would unveil a digital streaming plan by year’s end, which he called “a top priority for the company.” This week Verizon CEO Lowell McAdam declined to discuss his company’s streaming plans.
It’s hard to figure out Verizon’s place in the infotainment world — and CEO Lowell McAdam kept things murky in his appearance today at the UBS Annual Global Media and Communications Conference. He wouldn’t address this week’s surprising report that the phone giant might launch its own national movie and TV streaming service, potentially pitting it against Netflix. But he’s clearly interested in the business: McAdam said that Verizon seriously considered bidding for Hulu. “The jury’s out, but I do believe there’s a place for over-the-top” — jargon for a digital alternative to traditional pay TV — he said. “That model has yet to be determined and I hope we’ll be a player in that.” Wouldn’t that hurt Verizon’s FiOS, which provides a cable-like TV service to 4M subscribers? “Over-the-top can be complementary,” McAdam says. ”I don’t think it’s one thing or the other.” He was equally certain that FiOS “will not be disadvantaged” by Verizon’s new agreement with Comcast and other cable operators: The phone company will pay them $3.6B for their wireless spectrum — but also give them opportunities to sell Verizon Wireless phone service, even in markets where they compete with FiOS. McAdam says that he expects FiOS to eventually capture as much as 50% of the video and broadband customers in the markets it serves. Read More »