Verizon Communiations Inc. is said to be cooking up a plan to take on Netflix and traditional cable TV providers. Verizon currently offers FiOS, a bundled package of internet access, telephone and TV service and they are said to be in talks with prospective programming partners about the upcoming service which will be introduces in markets without the FiOS package. But their CEO refuses to claim any truth regarding the issue.
“We’ll continue to look at different alternatives, but I think there will be a place for over-the-top” video, Verizon Chief Executive Officer Lowell McAdam said today at a UBS AG conference in New York. The company may combine streaming video with other forms of distribution, with the model “yet to be determined,” he said.
But if there is any truth to this, it could cause friction between Verizon Comunications and its sister company, Verizon Wireless, which recently announced that it agreed to buy wireless spectrum from Comcast, Time Warner Cable, and Bright House Networks for $3.6 billion. The deal would allow Verizon Wireless to sell cable TV as well as get an edge in the 4G/LTE race, as the three MSOs will offer Verizon Wireless branded voice and data services as part of their bundled offerings, and Verizon Wireless retail outlets in the various MSO territories will promote cable bundles along with their LTE offerings. But of course, the FCC would still have to approve the deal in order for it to push through.
The joint venture was originally called SpectrumCo. with the following companies involved: Comcast, Time Warner Cable, Bright House, Cox Communications, and Sprint Nextel Corp but Sprint Nextel and Cox decided to abandon the venture with Cox going at it alone.
If Verizon succeeds in the venture, they would have to pay $2.3 billion to Comcast, $1.1 billion to Time Warner, and $189 million to Bright House.
And it’s not only pay TV or carrier networks that Verizon is out to bump, as they are ditching Google Wallet when they release the Samsung Galaxy Nexus. They’re opting to use Isis, the mobile payment system they’ve developed with fellow carriers AT&T and T-Mobile.
If Verizon goes through with their web TV offering, this could be detrimental to pay TV or cable TV providers as consumers would want bundles that would eliminate the need for another service. But as consumer activity changes, so too must consumer-reliant services. Cable TV is being forced to evolve in a wireless, on-demand world, and it’s quite evident Verizon’s hoping to dominate tomorrow’s market, whatever it may be.