Chuck Bednar for redOrbit.com – Your Universe Online
Verizon has announced plans to unveil a new Internet-based television service that will allow users to subscribe to and pay for only the channels they want to watch, various media outlets are reporting.
Speaking at the Goldman Sachs investor conference on Thursday, Chief Executive Lowell McAdam said the new service is expected to premiere sometime next year and would eliminate the need for customers to pay for channels they never watch, the UPI news agency reported over the weekend.
According to Timothy Stenovec of The Huffington Post, details about the service are currently scarce, but McAdam said that it would offer “a la carte” options instead of channels being bundled as many cable and satellite providers do currently.
He added that the system would be similar to Netflix, but would include live streaming and content from the four largest broadcast networks – CBS, ABC, NBC and Fox. The announcement comes at a time when Experian Marketing Services has pointed out that Netflix and Hulu subscribers are three times less likely to subscribe to cable television.
“No one wants to have 300 channels on your wireless device. I think everyone understands that it will go to a la carte. The question is what does that transition look like,” McAdam said at the conference, which was held in New York, according to Wall Street Journal reporter Ryan Knutson. “I think over-the-top video is right around the corner.”
In addition to content from the so-called “big four” networks, McAdam said he has also been holding regular discussions with executives from companies such as DreamWorks and digital startups like Awesomeness TV. He said that conversations with those content providers had drastically changed in tone recently, moving “from almost a stiff arm to much more of an embrace,” and that Verizon already had “the assets in place.”
“Verizon’s move comes as the TV industry is set to undergo a massive shift,” said Stenovec. “The rise of streaming services like Netflix, Amazon Prime Instant Video and Hulu, which for a flat fee offer on-demand viewing of movies, TV shows and original programming, pose a threat to traditional ‘linear’ cable and satellite.”
The number of people, especially those in the highly-coveted younger viewer demographic, is increasingly selecting streaming video services over more expensive cable and satellite bundles, he added. Experian statistics reveal that the number of households moving away from traditional television providers has increased from 5.1 million homes in 2010 to 7.6 million homes in 2013, while Netflix subscriptions now top 36 million in the US alone.
Verizon’s service would deliver television content and live sporting events to smartphones (and, presumably, tablets) through a technology known as multicasting, Stenovec explained. Multicasting allows carriers to broadcast their content using a single stream of airwaves that is always accessible to customers and avoids network congestion.
“Separately, Mr. McAdam indicated he is more open now than before to expanding the company’s FiOS broadband Internet service in new markets,” Knutson added. “Verizon also is open to selling some of its rural wired network assets and some of its towers,” he added, though the CEO “ruled out converting the company’s fiber assets into a REIT, a tax-free investment structure, which regional carrier Windstream Holdings Inc. did this summer.”
Internet-Based "A La Carte" TV Service Coming Next Year From Verizon
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