Verizon Considers Separating Streaming Video from Mobile Data Service

by Matt Klassen on July 22, 2015

In an effort to differentiate itself in an increasingly competitive market, Verizon is looking to expand its core business model to not only include wireless and wired services, but a separate streaming video service as well. According to company CFO Fran Shammo, the mobile and online video service will be unlike anything the market has seen so far, and should be ready for market sometime later this summer.

The move comes as part of a larger effort in the telecom industry to transform network operators into service providers, and Verizon is hoping this OTT (over-the-top) service, so called because it will be available to anyone with an Internet connection as opposed to Verizon subscribers, will become a significant growth engine going forward.

What’s more, although the company is still working out pricing and its overall business model, one framework Verizon is considering is separating the video service from the rest of one’s data allotment, meaning using streaming video wouldn’t eat into one’s data bucket, and would instead be subsidized by advertising, a boon to anyone who has watched their monthly data disappear after viewing one or two videos online.

“There is no one else out there who will deliver an OTT solution like the one we will launch,” Shammo said in an interview on Tuesday. That said, Shammo did acknowledge that his company still has a lot of details to work out, most notably whether to offer a subscription model, pay-per-view model, or something else entirely.

The notion of separating the streaming video service from one’s data cap is certainly the most intriguing option, as it would offer Big Red the most significant differentiation in this growing combined market of telecom and entertainment solutions. For many of us the most annoying part about mobile entertainment is that we can never access as much as we want, as it always amazes me just how little one can watch even with a 2GB data cap.

By addressing this key consumer headache, Verizon has the potential to offer the streaming video consuming masses something they can’t find anywhere else, quality video options that don’t consume massive amounts of data. Of course after separating video Verizon may have to look to restructure its data packages, as the company will soon find consumers won’t need as much data to surf the Internet and send text messages.

With scant information and the company still considering a variety of options, though, it is difficult to truly gauge the value of what Verizon is attempting to put together here. What we do know is that with partners like the National Football League and a variety of news agencies, what Verizon is attempting to do is to bring a sense of “timeliness” to video viewing, where people need watch something now because it’s live and relevant. “Nobody is going to sit there and watch ‘CSI,'” Shammo said.

In the end I’ll admit I have little first hand knowledge of whether these sorts of streaming video services are widely available yet across the United States, but this is something we’ve already seen explode to the forefront here in Canada over this last year, as all major wireless service providers now offer some sort of streaming video service. The problem with those Canadian services, however, is that they’re all inexorably tied to one’s subscription, so if Verizon could transcend that limitation it may actually be able to create something we’ve never seen before.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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