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Netflix And Verizon Quietly Reach Connection Deal

By | Tuesday April 29, 2014 @ 10:16am PDT

Netflix headquartersNetflix and Verizon confirm to those who call today that they have an agreement, but offer no details. Netflix says it hopes the terms “will improve performance for our joint customers over the coming months.” That suggests how much things have changed since February when Netflix cut a similar agreement with Comcast. They initially described the terms in a press release as “mutually beneficial,” but later Netflix decried it as an “arbitrary tax” — and a reason for it to oppose Comcast’s $45B acquisition of Time Warner Cable. Netflix CEO Reed Hastings told analysts last week that “we don’t think we should have to” pay for a superior connection to an Internet service provider. “It started off with a very small fee and then escalated into this blackout type model that has been a real problem for the industry and for consumers. So we are trying to avoid that by seeing if we can move everyone to no-fee interconnect.” Netflix says that in March Verizon FiOS speeds averaged 1.91 Mbps, down from 1.1 Mbps in November.

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Deadline Big Media 75 – The Dish And Disney Do A Deal Podcast

By and | Friday March 7, 2014 @ 1:19pm PST

Deadline BIG MEDIA ep 75In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom look at the big Dish-Disney deal and what it might mean for other media companies and even a possible sports-free online pay-TV service. They also discuss Disney’s continuing headaches with its Interactive unit, whether FCC Chairman Tom Wheeler’s new rules for local broadcast alliances go far enough and look at the speculation about Carmike, the big exhibitor whose strong quarter fueled speculation that it will be a fat takeover target.

Deadline Big Media podcast 75 (.MP3 version)
Deadline Big Media podcast 75 (.M4A version)
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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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Verizon Pays $1B To Expand Smartphone Deal With NFL

By | Tuesday June 4, 2013 @ 6:49pm PDT

This could come as a helmet to the ribs of the uber-lucrative NFL broadcasting-streaming game and the notion of sponsorship vs. rights deals. Not to mention possibly expanding the broader sports world’s ever-growing “TV everywhere” game plan. Verizon today finalized a $1B extension of its deal with America’s dominant sports league that – beginning with the 2014 season — will allow streaming of all CBS and Fox in-market Sunday afternoon games to mobile phones (regular blackout rules apply). Not only that, but the deal comprises all NFL playoff games, including the Super Bowl. The four-year agreement expands Verizon’s current NFL Mobile package, which gives access only to games on airing on NBC, ESPN and the NFL Network – read Monday, Sunday, and Thursday night football – along with the league-owned NFL Network and its NFL RedZone.

Related: David Berson Named CBS Sports President

Verizon’s billion (with-a-B)-dollar deal makes the wireless giant one of the NFL’s biggest business partners outside of its media-rights holders. It marks a significant increase over Verizon’s previous NFL pact: Sports Business Daily says the company had been ponying up about $50M a year to the NFL since 2010 — including rights fees, team spend commitments and media spending on NFL media partners – but will make a $210M payment in the just Year 1 of the new deal. A potential hitch is that the new agreement includes access to games only on mobile phones, which certainly should give rise to a kerfuffle about exactly what defines a “mobile phone” in the age of tablets and Galaxy IIIs and such. 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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Broadcasters, Wireless Providers Ask FCC For Spectrum Re-Allotment Rules

By | Friday January 25, 2013 @ 12:04am PST

A coalition of broadcasters, wireless providers, and chip makers Thursday urged the FCC to adopt guidelines to minimize potential conflict between broadcasters and wireless companies as the agency strives to cope with rising stress on bandwidth. Because of ever-increasing demand for mobile devices, the FCC proposed in September that broadcasters voluntarily give up some of their allotted bandwidth in exchange for a share of the proceeds when that bandwidth is auctioned to wireless broadband providers. The National Association of Broadcasters initially worried that broadcasters in smaller markets would be more likely to give up spectrum than those in urban markets. But it has turned out that a number of broadcasters in larger markets are willing to sell spectrum rights. Coalition goals cover a range of technical issues that are intended to protect TV and wireless signals against interference from each other and for minimum and maximum size specifications for individual segments of spectrum. The coalition also specifically calls for the FCC to expedite spectrum coordination with Canada and Mexico. In addition to NAB coalition members include Intel, AT&T, Verizon, T-Mobile and Qualcomm. You can read a copy of the coalition letter here

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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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Redbox Instant Subscriptions Will Cost $8 A Month And Include EPIX Content

By | Wednesday December 12, 2012 @ 6:40am PST

We still don’t have a firm start date, although the joint venture between Redbox and Verizon says that consumers will be able to subscribe to a “beta product” sometime this month. Redbox Instant by Verizon‘s streaming service will cost a penny more than Netflix and will include four, one-night credits each month to rent DVDs at Redbox kiosks. For an additional dollar a month, customers can use the credits to rent Blu-ray discs. We still know little about the streaming content — Warner Bros is the only studio that has publicly said it will participate. But Redbox Instant says its new deal with EPIX will enable it to offer Paramount, Lionsgate, and MGM movies 90 days after they appear on EPIX’s pay TV channel. The venture also will sell and rent digital versions of new movies from Lionsgate, NBCUniversal, Paramount, Relativity and Sony Pictures Home Entertainment. The web-based service will work with mobile devices powered by iOS and Android operating systems as well as Samsung Blu-ray Players and TVs with SmartHub, LG Smart TV and Blu-ray Players, and Google TV. Here’s today’s release: Read More »

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Redbox Instant By Verizon May Offer Unlimited Streaming For $6 A Month: Report

By | Friday November 30, 2012 @ 10:06am PST

That’s one of the details disclosed by web site GigaOm, which found a help page for people beta testing the streaming service that’s due to launch next month — with hopes to challenge Netfllix and Amazon Prime. (The help page now requires a password to access.) To be sure, things could change by the time Redbox Instant By Verizon launches; possibly December 17 based on info on the page. Still, the disclosures are interesting because Redbox and Verizon have been unusually tight-lipped about their plans. The report says they tentatively expect to charge $6 a month for unlimited access to videos. The joint venture has only disclosed one supplier: Warner Bros. But screen grabs show that beta users can access films from Lionsgate (including Killers and Tyler Perry’s Madea’s Big Happy Family), Paramount (Rango, Iron Man 2, and Thor), Universal (Dr. Seuss’ The Lorax), and Roadside Attractions (The Conspirator and The Last Godfather). Last month Coinstar CEO Paul Davis, whose company owns Redbox, told analysts that they’re “getting the content secured” and “making great progress.” Users reportedly will be able to stream to devices powered by Google’s Android and Apple’s iOS as well as Microsoft’s Xbox. For an additional $2 a month, subscribers receive four credits, which expire at the end of each month, to rent DVDs at Redbox kiosks. There’ll also be opportunities to rent and download content via the web.

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AT&T,T-Mobile Partner To Help Wireless Customers Affected By Hurricane Sandy

By | Wednesday October 31, 2012 @ 1:30pm PDT

AT&T and T-Mobile USA have reached a temporary agreement to enable roaming on their networks to customers of both providers in areas most affected by Sandy. Customers will be able to place calls as they normally do, but the calls will be carried over whichever network is up and running in their area, CNET reports. The companies say there will be no roaming charges or fees associated with the calls and subscribers’ current service agreements will remain in place. The arrangement is possible because both carriers run on GSM and UMTS networks. Yesterday the FCC said that 25 percent of cell sites in Sandy’s path had been knocked offline. The FCC said today the number had improved by a few percentage points but couldn’t provide an exact number, according to PC Magazine.

Separately, Verizon worked to repair damage at its Lower Manhattan headquarters where 3 1/2 of 5 basement floors were still flooded. Switching equipment on upper floors wasn’t damaged but connections for incoming lines remain under water. Verizon was also working to restore telephone hubs in other locations downtown. The company announced this afternoon that workers had successfully erected a temporary wireless antenna in Jersey Ci]oty across the Hudson River from Lower Manhattan.

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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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TiVo Shares Continue To Rise As Investors Expect More Patent Suit Settlements

By | Tuesday September 25, 2012 @ 8:42am PDT

TiVo‘s stock led the media pack yesterday, up nearly 4% after it announced that it will collect $250M from Verizon to settle their patent infringement dispute. And today it’s still on top, up about 3% to $10.25 in early trading. Lazard Capital Markets’ Barton Crockett helped this morning by upgrading his recommendation on TiVo stock to “buy” from “neutral” with a target price of $14. That’s a bit of a surprise: Yesterday, Crockett said that the Verizon settlement was “close to our expectations” and “not a sea-change.” But this morning he says that “upon further analysis” he concluded that the terms with Verizon make him “more optimistic” that TiVo will negotiate another settlement in its patent infringement case against Google’s Motorola Mobility, scheduled to go to trial this spring. “Google is seen by many as potentially a seller of Motorola Mobility,” Crockett says. “Settling the TiVo suit could make a Motorola sale much easier.” Brean Murray Carrett & Co analyst Todd Mitchell also says that the Verizon deal bodes well for the DVR pioneer. There’s a “high likelihood” the Motorola suit will be settled before trial because the business “cannot be priced with the overhang,” he says this morning. Cisco also might be motivated to resolve its differences with TiVo: If it doesn’t, then it would be “at a disadvantage pitching its home gateway business” from its recent acquisition of software company Read More »

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TiVo To Collect $250M After Settling Patent Infringement Suit Against Verizon

By | Monday September 24, 2012 @ 5:07am PDT

TiVo shares were up about 10% in pre-market trading immediately following the announcement. The deal ends a bitter legal fight that began in 2009 and was scheduled to go to trial October 1. It ensures that Verizon FiOS customers can continue to use the company-supplied DVRs, which are manufactured by Cisco. In addition, the companies say that they’re looking at arrangements to collaborate — including by offering TiVo users content from the planned Redbox Instant By Verizon streaming video service. TiVo will collect about $100M “as consideration for past damages,” and recognize some of that in the current quarter, it says in an SEC filing. The settlement also resolves Verizon‘s countersuit against TiVo. The companies say they’ve “entered into a cross license of their respective patent portfolios in the advanced television field.” Read More »

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FCC OKs Verizon-Comcast Deal 5-0

By | Thursday August 23, 2012 @ 5:44pm PDT

The Federal Communications Commission unanimously cleared the way for Verizon Wireless’ $3.9 billion purchase of airwaves from a group of big cable providers led by Comcast Corp. According to the New York Times, the FCC voted 5 to 0 to allow Verizon’s acquisition of unused spectrum belonging to Comcast, Time Warner Cable, Bright House Networks and Cox Communications. Final approval was considered a fait accompli when the FCC and U.S. Department of Justice blessed the deal last week. The FCC agency also gave the green light to transfer spectrum licenses from Leap Wireless and the transfer of wireless spectrum between Verizon and competitor T-Mobile. Verizon plans to use the spectrum for its higher-speed 4G network. The deals also allow for the cable companies to market Verizon services and cross-market their own services in Verizon stores. Consumer groups have criticized the spectrum transfer and related marketing deals as anticompetitive, and the Writers Guild West also condemned the Verizon-cable deal.

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FCC And Justice Department Bless Verizon Deal With Comcast

By | Thursday August 16, 2012 @ 7:36am PDT

Consumer advocates say that this pretty much ends prospects that cable and phone companies will vigorously compete in wired and wireless broadband. But government officials believe they extracted enough compromises from the companies to resolve antitrust concerns and protect the public interest. The Justice Department filed a consent decree to let Verizon pay close to $4B to a consortium of cable companies led by Comcast for some airwave spectrum they control, as the erstwhile competitors also strike a series of agreements to develop products and cross-market each other’s services. The FCC also is teed up to endorse the deal; Chairman Julius Genachowski said he will circulate an order based on the consent decree to be approved by the full commission. Read More »

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Are Federal Officials About To Approve Verizon’s Alliance With Big Cable?

By | Tuesday August 14, 2012 @ 6:18am PDT

It sure looks that way for the controversial deal after the companies, the FCC, and Justice Department “reached broad agreement to settle antitrust concerns,” The Wall Street Journal says this morning. Verizon agreed in December to pay close to $4B to a consortium of cable companies led by Comcast for some airwave spectrum they control, as the erstwhile competitors also strike a series of agreements to develop products and cross-market each other’s services. The Journal says that Justice officials warmed to the deal after the companies agreed to apply for anti-trust clearance at least every five years. In addition, Verizon and Comcast reportedly assured officials that they wouldn’t cross-market services in communities where Verizon’s FiOS service competes with Comcast for video, broadband, and phone customers. Still to be resolved: whether the restriction applies to markets where Verizon provides phone and broadband service, but not FiOS which uses state-of-the-art fiber optic lines. Verizon has said that it only intends to finish building out its current markets, and won’t enter new ones. Verizon also recently said that it would auction off some of its airwave spectrum if the cable deal is approved. Critics say that consumer prices could rise if Verizon and cable become collaborators instead of competitors. It would “diminish incentives [for Verizon] to expand FiOS deployment,” 32 House Democrats wrote last month. “This would leave many of the communities that we represent on … Read More »

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