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Verizon gathers the pieces for its own answer to Netflix

Mark Sullivan | Nov. 5, 2013
Verizon might be assembling a way to deliver broadband TV service wirelessly to homes all across America using its 4G LTE network. Let's connect some dots.

We'd all be happier if we could get our home broadband and TV service over a simple wireless connection, with no cables, cable boxes, wires, big dusty set-top boxes, and guys who show up late to install it all. It's a wonder that these artifacts still exist.

The news Wednesday that Verizon is in "advanced" talks to buy the broadband video service that Intel has been working on may be pointing in the direction of a radically simplified living-room TV setup. Verizon might be assembling a way to deliver broadband TV service wirelessly to homes all across America using its 4G LTE network. Let's connect some dots.

Verizon is poised to buy Intel's video entertainment division, Intel Media, or at least the division's main product, OnCue Internet video service. OnCue is an "over-the-top" video service, meaning it runs over the public Internet and is agnostic to the ISP. Netflix and Amazon Instant Video are also "OTT" services.

Most people in the video industry believe that in the next decade or so old-school pay TV services like cable and satellite will give way to a new wave OTT services that look more like Netflix. And Verizon's movements in the last couple years strongly suggest that it would like to take its place in that next generation of pay-TV providers.

If it wasn't already obvious that Verizon wants to be like Netflix, the company partnered with the movies-by-kiosk service Redbox in July 2012 to provide video streaming via a new service called RedBox Instant. Some observers think that Verizon may have plans to use Intel's OnCue stuff to make that service work better.

Intel's Internet TV ambitions were thwarted by troubles licensing video content, but Verizon is far less of a babe in the woods than Intel is when it comes to the intricacies of the TV business. It has already been selling cable-like video service to more than five million FiOS subscribers on the East Coast, and has the relationships with video content owners to support it.

Some believe that Verizon could use Intel OnCue as an online video add-on to its FiOS TV service (which hasn't been selling too well lately). "The most obvious synergy would be enhancing the existing Verizon FiOS television (and internet) services," says Albert Lai, COO at the online video platform company Brightcove. "With recent announcements of subscriber losses, customer attrition is a major concern."

But the thing that makes Verizon's potential buy of Intel Media and OnCue is the Verizon 4G LTE network. Verizon has already demonstrated an interest in selling premium TV content over that network: It paid the NFL $100 million for the right to stream all NFL games to Verizon wireless devices starting next year.

 

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