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Verizon CEO Says He’s Weighing A Wireless Internet Pay TV Service

By | Tuesday March 4, 2014 @ 9:50am PST

Verizon’s already talking to content creators about ways to enable subscribers to access video content nationally. VerizonLogo1“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 »

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Verizon Beats Q4 Earnings Expectations As FiOS Video Sub Growth Slows

By | Tuesday January 21, 2014 @ 5:41am PST

Shares are up a little less than 1% in pre-market trading following this morning’s report. verizon_logoThe company says that it generated $7.9B in net income in Q4, up from a $1.9B loss in the same period in 2012 (with pension and Superstorm Sandy costs), on revenues of $31.1B, +3.4%. The top-line number came in just slightly ahead of analyst expectations for $31.0B. Adjusted earnings at 66 cents a share beat the consensus estimate by a penny. Verizon says that all of its major businesses grew in Q4: It added 1.7M retail wireless connections for a total of 35.1M retail postpaid accounts. It also crowed that it has “substantially completed deployment of [the] 4G LTE smartphone lineup.” That growth outweighed the continuing decline in its wireline voice business where the number of connections fell 5.2% to 11.2M. The big declines are among customers served by its antiquated copper wires — it’s trying to move many over to Verizon FiOS services with fiber optic lines. The number of FiOS Internet customers rose 2.1% in the quarter to 6.1M. The FiOS video business also grew, but at a slowing pace: With 5.3M subs, it’s up 1.8% in the quarter. CEO Lowell McAdam says that the company is “attracting more customers than our competitors and improving our financial performance.”

Related: Verizon Agrees To Buy Intel’s OnCue Streaming Platform

Here’s how FiOS video subs look over the last two years: Read More »

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Verizon Agrees To Buy Intel’s OnCue Streaming Platform

By | Tuesday January 21, 2014 @ 4:42am PST

The deal positions Verizon to become a player in a new market for pay TV where channels are transmitted over the Internet. intelIntel had hoped to move in to that emerging platform — it has a lot invested in the set-top boxes its OnCue service would use — but was unable to secure licensing rights for popular services at competitive prices. Intel was believed to want $500M for its platform, but the companies didn’t offer financial terms for the widely anticipated deal, expected to close by the end of March. Verizon CEO Lowell McAdam says that it “provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation.” The company adds that it expects to “integrate [Internet protocol]-based TV services with FiOS video to further differentiate FiOS from traditional cable TV offerings and to reduce ongoing deployment costs.” In addition, the company will integrate the service with its wireless 4G LTE network. It will keep the current OnCue management team in place and offer jobs to “substantially all of the approximately 350-person Intel unit” which will stay in Santa Clara, CA. Intel CEO Brian Krzanich says that with the sale his company can further align our focus and resources around our broad computing product portfolio in segments ranging from the Internet-of-Things to data centers.”

Related: Verizon Beats Q4 Earnings Read More »

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Will Intel Sell Its Online Pay TV Service To Verizon By Year End?

By | Monday November 25, 2013 @ 3:47pm PST

The wheels are in motion for that to happen, Bloomberg reports. Intel wants about $500M for OnCue, its ambitious initiative to offer a cable-like service via the Web. Samsung and Liberty Global have kicked the tires. But Verizon‘s said to be already out talking to broadcast and cable channels about possible carriage terms, according to the news service’s unnamed sources. The big question: Would Verizon need new contracts for an online service, or could it just tweak the current programming agreements that apply to territories where it offers FiOS TV? If Verizon proceeds, then it theoretically could compete with cable and satellite companies across the country. Before Intel decided to unload OnCue, it hoped to create a subscription service that would work with its own interactive set top boxes. But it was unable to persuade network owners to let it provide individual channels — not just the bundles offered by cable and satellite — even though it offered a premium over the fees that conventional distributors pay. Some programmers privately doubted that Intel could guarantee them a quality signal over the Internet, and noted that Nielsen initially wouldn’t be able to measure viewership via its non-traditional set top boxes.

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Turner Inks Long-Term Deal With Verizon FiOS

By | Wednesday October 2, 2013 @ 8:15am PDT

Turner Broadcasting System, Inc. and Verizon today announced a comprehensive long-term distribution agreement that will deliver content from Turner’s leading portfolio of networks to FiOS TV customers, across a variety of screens, including television, PC, tablet and handheld devices. Terms of the agreement were not disclosed. As part of the agreement, FiOS TV subscribers will receive a robust offering of on-demand programming, as well as live streaming of all major Turner networks that can be viewed in and out of the home across multiple devices, enabled by expansive TV Everywhere rights that provide subscribers more opportunities and easier access to authenticated content. FiOS TV and FiOS Internet customers will ultimately have easier, instant access to Turner brands through an automatic login, providing a seamless and consumer-friendly experience on both Turner’s and Verizon’s platforms. The new agreement provides the more than 5 million Verizon FiOS TV subscribers with a broad array of diverse, entertaining and informative content from Turner’s award-winning and popular entertainment, kids, news, sports and young adult programming.

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UPDATE: CBS CEO Leslie Moonves Takes Swipe At Time Warner Cable With Verizon Retrans Announcement

UPDATE, 7:50 AM: CBS CEO Leslie Moonves says the deal CBS just signed with Verizon‘s FiOS TV in New York, Los Angeles, and Dallas, among other markets, is virtually identical to the one offered to Time Warner Cable. “This important deal was reached swiftly and amicably in just a few days after our conversations began,” Moonves said pointedly in a memo to staff this morning. “You should know that Time Warner Cable has been offered almost exactly the same deal for CBS carriage to which Verizon has agreed.” TWC is entirely to blame for the “lack of urgency” on its retrans talks with the network, Moonves said.  The Verizon deal gives FiOS over-the-air retrans rights; it does not cover digital rights. (Moonves’ full memo after the original story.)

Related: Time Warner Cable Sued Over CBS Blackouts

PREVIOUS, AM: Three weeks into its battle with Time Warner Cable, CBS — blacked out on TWC in New York, Los Angeles and Dallas — has announced it had reached a new deal for continued retransmission of CBS-owned stations and wider distribution of CBS Sports Network on Verizon’s FiOS TV in multiple markets nationwide, including New York, Los Angeles, and Dallas. “This important deal was reached swiftly and amicably in just a few days after our conversations began,” CBS chairman Leslie Moonves said pointedly in a memo to staff. The Verizon deal includes all of the approximately 3.5 million subscribers served in markets where CBS owns TV stations. FiOS has about 5 million subs total. (CBS and Verizon already had an existing deal for FiOS to carry its Showtime and Smithsonian networks.) “We’ve reached this agreement in partnership with CBS for our customers, so that they may continue to enjoy CBS content on FiOS,” Verizon VP Video Content and Strategy added, pointedly. “Verizon continues to address areas of change where necessary in current policies to better reflect the interests of consumers.”

Related: TWC Offers Free Tennis Channel Preview In Blackout Areas

The announcement comes the morning after CBS and TWC had a mini-breakthrough in their retransmission head-butting. In New York City, both parties agreed to un-black-out Channel 2 for debates for mayor and comptroller. (The debates will also air on channel 75, a backup arrangement CBS made before the mini-truce was struck). Here’s this morning’s CBS/Verizon announcement: Read More »

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Verizon, Disney & ESPN Media Networks Group Reach Deal On FiOS

By | Thursday July 18, 2013 @ 1:19pm PDT

Verizon and the Disney and ESPN Media Networks Group today announced that an agreement has been reached to provide Verizon FiOS customers the new authenticated services WATCH ABC, WATCH Disney Channel, WATCH Disney XD and WATCH Disney Junior, as well as the yet-to-be-launched WATCH ABC Family service. Verizon will also add Fusion, the upcoming news, information and lifestyle multiplatform network for Hispanics, the youngest and fastest-growing demographic in the U.S. The English-language joint venture from ABC and Univision is set to launch later this year.

Read More »

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Can Verizon Tie Pay TV Channel Fees To The Number Of Viewers They Attract?

By | Monday March 18, 2013 @ 3:28pm PDT

Funny how the prices that Big Media companies charge for their pay TV channels rarely have much to do with the consideration that really matters: How many people actually watch? That’s what makes Verizon‘s new effort to link payments with audience levels, which The Wall Street Journal disclosed this morning, so intriguing — but also such a long-shot. The company’s FiOS TV unit wants to base the fees it pays channels on the number of households where someone tunes in for at least five minutes a month. That wouldn’t necessarily reduce subscribers’ bills, Verizon’s top programming negotiator Terry Denson tells the paper. It would simply help to “stabilize retail prices” by rewarding channels when they attract additional viewers. But Denson acknowledges that it will be hard to persuade programmers to abandon their business models which are built on the presumption that they should extract fees from all subscribers including those who never watch their channels. He says that his talks with owners of small and midsized networks are just “inching forward” and he hasn’t broached the idea with Big Media companies that dominate TV programming. Read More »

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Verizon Hopes To Link Network Carriage Fees To Actual Viewership Figures: WSJ

By | Sunday March 17, 2013 @ 5:32pm PDT

It isn’t a la carte but Verizon’s proposal to tie what it pays to carry TV channels to the number of viewers who actually watch is what big media companies might consider “disruptive”, according to the Wall Street Journal. Verizon’s FiOS TV is the nation’s sixth-largest pay-TV provider and has begun negotiations with some smaller companies about basing what Verizon pays on audience size. Under the established industry model, cable and satellite operators pay a monthly per-subscriber fee to carry channels based on the number of homes the channels are available. Verizon’s chief programming negotiator Terry Denson suggests that in many cases “We are paying for a customer who never goes to the channel”.  Read More »

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Verizon Shares Down Pre-Market On Weaker Than Expected Q4 Earnings

By | Tuesday January 22, 2013 @ 4:43am PST

The stock is off about 2% after this morning’s report, which says Verizon took a big hit at the end of last year from Superstorm Sandy and charges for severance and pension expenses, and early debt retirement. The communications company recorded a Q4 net loss of $1.93B, down from a $212M loss a year ago, on revenues of $30.05B, +5.7%. Revenues were slightly ahead of the $29.83B that analysts expected. But earnings fell far short of forecasts. Not including one-time charges, Verizon earned 38 cents a share — well below the 50 cents that analysts envisioned. The company continues to struggle with lost wireline phone customers: Its total voice connections fell 6.8% to 22.5M, including 11.8M residential connections, -6.2%. The more technologically advanced businesses did much better: FiOS video subscriptions were +13.3% to 4.7M, and FiOS Internet subscriptions were +12.6% to 5.4M. Verizon Wireless also saw improvements, with subscriptions +6.6% to 98.2M. “We delivered a total return of 13.2% to shareholders in 2012, and we enter 2013 ready to accelerate the momentum we’ve achieved and create significant shareholder value in the years to come,” CEO Lowell McAdam says.

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AMC Networks Reaches Carriage Deal With Verizon FiOS

By | Tuesday December 11, 2012 @ 12:10pm PST

Looks like AMC Networks’ warning to Verizon FiOS‘ 4.6M subscribers that they were “about to lose” channels including AMC, IFC, and WE tv was all for naught. The companies announced they have a pact to keep the channels on the phone giant’s video system past the end of December, when the current contract expires. While the companies didn’t disclose specific terms, AMC says that it’s a “long-term agreement” that “recognizes the value of our networks.” Susquehanna Financial Group’s Vasily Karasyov predicts the programmer will see a 6% increase in the fees it collects from Verizon, but says we should know the answer next year when AMC reports its Q1 earnings. A few weeks ago, Verizon chastized AMC for trying to “scare” FiOS customers adding that it has “a history of using their viewers as pawns in their negotiations with distributors.” Dish Network recently resumed carriage of AMC’s networks after dropping them in June while the companies were engaged in a legal battle.

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AMC Networks Warns Verizon FiOS Customers That Channels Could Go Dark

By | Monday November 26, 2012 @ 3:52pm PST

The programming company already has a website warning Verizon FiOS‘ 4.6M subscrubers that they are “about to lose” channels including AMC, IFC, and WEtv when the current contract expires at year end. Now AMC Networks is reaching out directly to Verizon customers: AMC says in a message that negotiations to renew the programming deal, which goes back to 2006, “are ongoing and we are hopeful to reach an agreement with Verizon that recognizes the fair value of our networks.” That sounds like code for: we’re far apart on the terms. Verizon says AMC is simply trying to “scare” FiOS customers. The phone company adds that it’s “unfortunate that [AMC] has decided to unnecessarily publicize these discussions, but not surprising as they have a history of using their viewers as pawns in their negotiations with distributors.” Dish Network recently resumed carriage of AMC’s networks after dropping them in June while the companies were engaged in a legal battle.

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NBCUniversal Retransmission Deal Grants TV Everywhere Rights To Verizon FiOS

By | Monday November 26, 2012 @ 12:27pm PST

This agreement shouldn’t come as a surprise after NBCUniversal struck a similar deal early this month with Cablevision. The cable and phone companies are engaged in the business equivalent of hand-to-hand combat in the tri-state area around New York City. Early next year Verizon FiOS subscribers will be able to watch programming from all of NBCU’s broadcast stations and cable networks both live and on-demand, and both in and out of the home. NBCU EVP Matt Bond says that the mobile streaming will work “on any device.” In addition to the traditional programming, the deal includes “expansive rights to carry the Olympic Games as well as carriage of Comcast SportsNet Philadelphia, Comcast SportsNet Mid Atlantic, The Comcast Network-Philadelphia and Comcast SportsNet New England.” The companies didn’t say how long the agreement runs and disclosed no financial terms.

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Verizon Q3 Earnings Hit Estimates On The Nose As FiOS Growth Slows

By | Thursday October 18, 2012 @ 7:03am PDT

CFO Fran Shammo had little to say to analysts this morning about Verizon‘s planned video streaming service with Redbox, aside from the fact that it’s “very close to launching” this quarter and should improve his company’s profits next year. Still, Verizon investors seem content with the company’s direction after it delivered solid Q3 results. The share price is up 1.4% in early trading after Verizon reported net income of $4.3B, +21.2% vs the same period last year, on revenues of $29B, +3.9%. The revenue figure exactly matched Wall Street’s consensus forecast. So did earnings per share, which came in at 64 cents not including charges tied to its payments to TiVo to settle its patent infringement case against the communications giant. The FiOS video business continued to slow: Subscriptions rose just 2.7% vs Q2 to 4.6M. The increase of 119,000 customers fell short of Wall Street’s expectation for 142,000. The company’s FiOS broadband unit also missed analyst targets. It ended up with nearly 5.3M customers, +136,000 vs the consensus forecast of +165,000. “The read-across for cable and satellite incumbents is self-evidently positive; lower growth for FiOS means smaller losses for their competitors,” Bernstein Research’s Craig Moffett says. Read More »

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Global Biz Briefs: Aussie Downloads, Univision-FiOS, George Soros, Greece Fest

By | Sunday June 3, 2012 @ 6:43pm PDT

27% Of Australians Admit To Illegal Downloads
Some 27% of Australians persistently or casually download screen content illegally and at a growing rate over the past 12 months, according to new research from the Intellectual Property Awareness Foundation, a coalition of film and TV organizations. The report showed 86% of people who download or stream illegally at least once a week admit they do so because it’s free. Incongruously, 71% of the 1,654 adults surveyed acknowledge that piracy is stealing but 76% don’t think they contribute to the problem. Some 50% of respondents agree that Internet Service Providers should take more responsibility to prevent the illegal distribution of movies and TV shows online. — Don Groves

Univision Signs New Deal With FiOS
Univision Communications has reached a comprehensive multiyear agrement with Verizon FiOS to continue carrying the U.S. Spanish-language media leader’s Univision and TeleFutura network feeds and owned-and-operated broadcast stations, the cable network Galavisión. Multichannel News reports the deal also includes Univision’s new cable services sports network Univision Deportes, telenovelas network Univision tlnovelas and FOROtv, a Spanish-language news network. The FiOS agreement also includes plans for multiplatform authentication rights for Univision’s upcoming interactive digital video platform for existing and new networks. The FiOS pact is Univision’s third far-reaching affiliate agreement in 2012. Dish Network and AT&T U-verse reached deals in January and May.
Read More »

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Nielsen: Cable Loses 2.9M Subscribers As 1.5M U.S. Households Cut Cord In 2011

By | Saturday May 5, 2012 @ 2:36pm PDT

For all the talk about cord-cutting in the digital era, movement in that direction is relatively slow, as many viewers switch from cable to satellite or telepone providers rather than drop multichannel service altogether. Nielsen reports that 98% of viewing remained on traditional TV in Q4 2011. Cable lost more than 2.9 million subscribers as viewers switched to telephone or satellite providers. U.S. homes subscribing to cable, satellite or telephone providers for their TV service declined 1.5% or about 1.5 million last year, according to figures Nielsen released this week. Subscribers adding telco (about 1.9 million) or satellite service (roughly 280K) weren’t enough to make up the difference.
Read More »

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UPDATE: Verizon Denies It Was Forced To Sell Spectrum To Close Comcast Deal

By | Thursday April 19, 2012 @ 4:45am PDT

UPDATE, 6:45 AM: CFO Fran Shammo, the only Verizon exec on today’s call with analysts, blasted commentators who said yesterday that the telecom giant was forced announce that it will auction off some of its airwave spectrum — if the government approves its deal to buy licenses held by Comcast and other cable companies. “This is nothing near a fire sale,” he says. If Verizon doesn’t like the offers it receives “then we won’t go through with the sale.” He also denied charges that the company was forced to sell the spectrum “because we ran into a roadblock at the FCC,” which — along with the Justice Department — must approve the cable deal in order for it to close. “We’re being good stewards” of the publicly owned airwaves, he said. Most of the questions dealt with Verizon’s growing smartphone and wireless data business. The company says it now offers its speedy 4G LTE service in 230 markets, about two-thirds of the country. About 9.1% of its wireless customers have 4G devices, up from 0.6% a year ago. While Shammo steered clear of specifics about the earnings hit Verizon takes for subsidizing iPhones, he says that the company is supporting Microsoft’s effort to build what he called “a third ecosystem” for Windows-powered mobile devices in addition to Apple’s iPhones and Google’s Android systems. He’s bullish about tablet sales: Verizon sold 390,000 in Q1, up 60% vs the same period last year, but probably can improve on that. There was a slowdown in anticipation of the roll out of the new iPad, which was only available for two weeks in the period. Read More »

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Verizon Says Redbox Deal Makes It More Powerful In Talks With Hollywood

By | Monday February 27, 2012 @ 1:55pm PST

Verizon is starting to hold “major discussions with content providers on cross-synergies” for the phone giant’s still mysterious streaming video venture with Redbox — which is due to go live in August — CFO Francis Shammo told investors today at the Deutsche Bank Media & Telecom Conference. Verizon’s hoping that the new offering, seen as a potential rival to Netflix, will give it more leverage when it negotiates programming deals for its FiOS video service which competes with cable and satellite.  “We were last to market and, obviously, the content providers made us pay a premium price for that,” Shammo says. But in its new negotiations with studios, Verizon’s seeking “a content play for all of our platforms, not just for one.” He notes that FiOS is now the fifth largest video provider, Verizon Wireless has about 100M subscribers, and Redbox attracts about 30M customers to its 35,000 kiosks. There’s still no word on what the venture with Redbox will offer and how much it will cost. The companies have said that it will be a national service, involve electronic sales and rentals, and include a tie-in with Redbox’s DVD rental kiosks. Verizon’s wireline unit will own 65% of the joint venture. ”Wireless is not involved,” Shammo says. Read More »

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Verizon Earnings Hit By Unusual Expenses Including Storm And Strike

By | Tuesday January 24, 2012 @ 5:18am PST

The company’s shares are down slightly in pre-market trading after it reported 4Q earnings that were somewhat lighter than analysts expected. The phone giant said that it ended the quarter with a $212M loss, down from a $4.6B profit in the period last year, on revenues of $28.4B, up 7.7%. The revenue increase was a company record, which Verizon attributes in part to the growing sales of smartphones and wireless data plans, and gains in FiOS subscriptions. Verizon had 4.2M video customers, up 194,000 in the quarter. But profits were hit by its subsidies for Apple iPhones, and several one-time expenses including a pension charge, and losses tied to the freak snowstorm that hit the Northeast in October and a strike by wireline workers. After adjusting for the unusual expenses, earnings came in at 52 cents a share, a penny light of expectations. With its recent investments in FiOS and 4G wireless transmissions, and a recent strategic alliance with cable operators including Comcast, CEO Lowell McAdam says that ”Verizon has set the stage for accelerated growth across our business units, and we look to continue to build significant value for shareholders in 2012.”

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