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
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.
Flash Poll
From The Founder
Networks of the future will rely on "white box" switches and servers rather than proprietary hardware and that's going to alter the shape of the communications industry. Who says so? John Chambers.
LRTV Custom TV
The Benefits of HyperScale Clouds for NFV

3|27|15   |   01:50   |   (0) comments


Hyperscale cloud has been developed by the Internet giants to support the creation and delivery of software-based services at blistering speeds, and at the lowest possible cost. The original ETSI NFV vision was to adopt hyperscale cloud architecture and practices. This vision has become somewhat obscured along the way, due to misunderstandings about the hyperscale ...
LRTV Huawei Video Resource Center
eLTE Rapid Meets the Need for Speed

3|26|15   |   4:45   |   (0) comments


Designed especially for emergency and dedicated ad hoc local mobile communications coverage, Huawei's eLTE Rapid solution can deliver trunked voice, video and data coverage for multiple users over a 6km range and be set up in just 15 minutes, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
On Videos: Challenges & Opportunities

3|26|15   |   5:56   |   (0) comments


Most everything is now connected. And along with 4K and 4G technologies, everyone could be creating and broadcasting video contents. Users are expecting better video experience with any screen, anywhere and anytime. Operators will meet new challenges, but also see some big opportunities.
LRTV Custom TV
JDSU: Delivering Dynamic Networks for a Personalized Experience

3|26|15   |   5:59   |   (0) comments


Light Reading speaks to JDSU at Mobile World Congress 2015 about new solutions in the areas of HetNets, VoLTE, backhaul, virtualization, big data analytics, and real-time intelligence.
LRTV Custom TV
Smarter Service Chaining & New Ways to Benefit From Qosmos Technology

3|25|15   |   03:11   |   (0) comments


David Le Goff, director of strategic and product marketing at Qosmos, explains how the company has added application awareness to subscriber information to make service chaining more efficient and reduce costs for networking and infrastructure. In addition, Qosmos technology, which has been delivered as C libraries, is now also available as a virtual machine, ...
Between the CEOs
Qosmos CEO: The Changing Face of DPI

3|24|15   |   13:53   |   (0) comments


LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures. Also, how the comms market is becoming more like the automotive industry.
LRTV Huawei Video Resource Center
FC Schalke Scores With Its Agile Stadium

3|24|15   |   6:23   |   (0) comments


Top German soccer club FC Schalke 04 has deployed a new, agile WiFi network from Huawei in its Veltins-Arena stadium and is reaping the benefits in terms of customer satisfaction and business opportunities, explains marketing chief Alexander Jobst.
LRTV Huawei Video Resource Center
Huawei’s Insights on Mobile Video

3|24|15   |   7:51   |   (0) comments


More people than ever are now watching videos on smartphones. Seventy percent of mobile traffic will be video traffic until 2018. In this video, Huawei's exports give their insights on mobile video in terms of business model, network planning and 4G network construction.
LRTV Documentaries
The Rise of Industry 4.0

3|24|15   |   02:26   |   (9) comments


Are you ready for the fourth industrial revolution? It's a big deal for influential operators such as Deutsche Telekom.
LRTV Huawei Video Resource Center
Getting Connected With eLTE

3|23|15   |   06:04   |   (0) comments


Trunked radio communications have entered the 4G LTE world, and with Huawei's eLTE solution, can now deliver a full range of data and video services as well as push-to-talk voice, explains Huawei's Norman Frisch.
LRTV Huawei Video Resource Center
Funkwerk’s on Track With Huawei

3|19|15   |   3:23   |   (0) comments


GSM-R technology specialist Funkwerk and Huawei have forged a partnership that is benefiting both parties, notes Funkwerk's Gottfried Winter.
LRTV Documentaries
How EANTC Tested Cisco's Virtualization Solutions

3|18|15   |   5:49   |   (0) comments


Carsten Rossenhövel, managing director of independent test lab EANTC, tells Light Reading founder and CEO Steve Saunders about the innovative approach his team had to take when validating Cisco's service provider virtualization and cloud solutions.
Upcoming Live Events
April 14, 2015, The Westin Times Square, New York City, NY
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
All Upcoming Live Events
Infographics
Hot Topics
AT&T Woos SMBs With Small-Scale WiFi
Sarah Thomas, Editorial Operations Director, 3/26/2015
The Rise of Industry 4.0
Ray Le Maistre, Editor-in-chief, 3/24/2015
Google Hires Wall Street's Most Influential Woman as CFO
Dan Jones, Mobile Editor, 3/24/2015
Average US Broadband Speeds No Great Shakes
Mari Silbey, Independent Technology Editor, 3/25/2015
Net Neutrality Suits: Only The Beginning?
Alan Breznick, Cable/Video Practice Leader, 3/24/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Chattanooga’s EPB publicly owned utility comms company has become a poster child for how to enable a local economy using next-gen networking technology. Steve Saunders, Founder of Light Reading, sits down with Harold DePriest, president and CEO of EPB, to learn how EPB is bringing big time tech to small town America.
Cats with Phones
Interspecies Phone Love Click Here
"No, you hang up."
"No, YOU hang up."
Latest Comment