Light Reading

At Age 2, Verizon FiOS Evolves

Raymond McConville
TelcoTV News Analysis
Raymond McConville
9/24/2007
50%
50%

Now two years old, Verizon Communications Inc. (NYSE: VZ)'s FiOS TV still looks an awful lot like cable. Run up and down the FiOS TV channel guide, and the programming isn't stunningly different. But Terry Denson, Verizon's vice president of FiOS TV content strategy and acquisition, says the carrier's mission isn't to have exclusive content, but a better network.

Table 1: Verizon FiOS at a Glance

Product Verizon FiOS Internet Verizon FiOS TV
Public Debut August 2004 September 2005
Subscribers 1,100,000 515,000
What's the Big Deal? Provides downstream speeds of up to 30 Mbit/s, with 50 Mbit/s available in some areas. Verizon is currently testing 100-Mbit/s speeds, too. As "the only carrier to offer uncompressed HD," Verizon says its FTTH network allows for a simply better picture. Interactive features will only enhance the quality, but the company doesn't plan to compete by securing exclusive content.
Source: Verizon, Light Reading




"From a marketing perspective, the company will continue to place the emphasis on the network," says Denson, formerly a VP of programming for Insight Communications Co. Inc. , the nation's ninth-largest cable company. That approach will be interesting to watch as Verizon moves toward providing a more interactive TV experience.

The company has announced that it will move FiOS to an all-IPTV platform within three years. (See Verizon: HD VOD Is Coming.) That will open the door to a lot more possibilities, but they just won't be as obvious on the surface to the consumer.

The move to IPTV
"The difference between cable-like TV and IPTV is not a consumer difference," says Heavy Reading senior analyst Adi Kishore. While Kishore points out that IPTV has the potential to bring more interactive features and more on-demand content to customers, a carrier, he feels, is more likely to go with IPTV because of the "economies of bandwidth."

Cable companies and services like Verizon's FiOS send broadcast video to customers, but IPTV, in contrast, runs on a request-and-send architecture. The provider does not have to send 50 Mbit/s of bandwidth to a customer's home if his computer and TVs are off. The old cable architecture, however, is constantly feeding the home whether the consumer is there to use it or not.

So IPTV makes carriers more nimble to offer a greater variety of on-demand content and more high-definition (HD) content. In traditional cable, to add on-demand services, incremental bandwidth must be added to the network. That's not the case with IPTV.

Mad for ads
So what will really change when Verizon moves FiOS to IPTV?

One thing will be the way Verizon delivers advertising. [Ed. note: Oh. Well. Yay.] (See Targeted Ads, 2; Speeds & Feeds, 0.) IPTV allows Verizon to know what its customers are watching. That's scary, to be sure. But it does mean that there will be no excuse for not having the most compelling content on offer -- since, after all, they "know" you.

"IPTV identifies what is that one piece of content that would compel someone to switch or stay," says Denson, optimistically. "If both cable and us have the World Cup, well then that's not going to be it. It could be Indian cricket or education. The scarcity of some content is an opportunity for us. Take the Food Network for example. [Ed. note: Please!] Everyone knows it, but not many people watch it. But for some, it’s a key selling point.

"It's going to be about cobbling customers together, one at a time, and finding their key points of acquisition, whether it be content, HD, or VOD," he adds. "If they don't care about interactive applications, then you're not going to get them with interactive applications."

IPTV technology will allow Verizon to watch its customers' viewing habits and react. But it doesn't necessarily mean that Verizon will become a purveyor of exclusive content or a content owner itself. "We've found that having the exclusive right to specific content is very costly and very rarely worth it," Denson says.

So while others cite exclusive content as a key competitive advantage, Verizon says that, while FiOS TV is changing, the service won't be drastically different from cable. Verizon's stance is that the change will be gradual, with a greater emphasis on interactive features as time goes on.

Table 2: Why IPTV? Some Possible Features You Might Find on FiOS (Someday)
Feature Benefit
Targeted advertising with hyperlinks direct to the advertiser's Website Consumers can buy on impulse. Retailers can know what consumers their ads are reaching.
Hosted interactive games No need to buy a console. Also, integrated billing means you don't need to fish for your credit card when buying new games.
Since bandwidth is less of an issue, more streams could change how sporting events are broadcast Consumers can see multiple camera angles during a game and get instant statistics on players and teams.
Your content is accessible from any IP network Watch DVR programs from your home recorder while you're on a business trip.
Your set-top has its own IP address Program your DVR from any computer or Web-enabled cellphone.
Source: Speculation


So when it becomes a fully IP-based service, don't expect that FiOS TV will boast exclusive shows on its network, or a blockbuster movie before its theatrical release.

Verizon is betting, instead, on its ability to offer a better picture by not compressing its high-def video feeds. It will use interactive features to provide more relevant content choices and advertising to consumers. That, the carrier says, is enough to give it a fighting chance against cable.

The challenge for cable is to decide what weapon it will use (pricing? content? quality?) to fend off FiOS as it eats into its territories. "Cable can do all the things that IPTV can, it's just much harder and more complicated," says Heavy Reading's Kishore.

— Raymond McConville, Reporter, Light Reading


Interested in learning more on this topic? Then come to The Future of Broadband 2007, a conference devoted to broadband's evolution as an enabler of next-generation consumer services and applications. To be staged in Atlanta, October 23, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.


(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
bollocks187
50%
50%
bollocks187,
User Rank: Light Beer
12/5/2012 | 3:02:07 PM
re: At Age 2, Verizon FiOS Evolves
The technocrats at Verizon have NO IDEA how to build future networks.

They pushed for a VoATM and analogue overlay Triple play solution and stung a number of vendors on cost with an overdesigned ONU and OLT model.

They now want to move to an IP Triple Play model after spending years in denial about this trend.

Please someone get in there and fix theese laggard morons. What a bunch of @#$%^&* losers.


Raymond McConville
50%
50%
Raymond McConville,
User Rank: Light Beer
12/5/2012 | 3:02:02 PM
re: At Age 2, Verizon FiOS Evolves
at least they've acknowledge it and are doing it. Better late than never. Sometimes in telecom it's better to be late then early. AT&T was early with the IP model, and it hasn't gone smoothly
Mark Sebastyn
50%
50%
Mark Sebastyn,
User Rank: Light Beer
12/5/2012 | 3:01:43 PM
re: At Age 2, Verizon FiOS Evolves
Raymond:

Such a move by Verizon would have a collateral impact on the hardware they buy and deploy. I've spoken with several folks who indicate that Fios is not moving to all IP- and that this is yet another example of the IPTV moniker being slapped onto something that is more broadcast in nature.

Will Verizon still broadcast channel content? What happens to the upstream encoders? What happens at the CPE?

A move to all IP makes a lot of sense now that FiOS is off the ground but information from other sources is conflicting.
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (0) comments


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.