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
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
Verizon Hums a Driving Tune
Sarah Thomas, Editorial Operations Director, 8/26/2015
Gogo Approved to Speed Up In-Flight WiFi
Sarah Thomas, Editorial Operations Director, 8/24/2015
Could Market Volatility Hurt Tech IPOs?
Dan Jones, Mobile Editor, 8/24/2015
Sprint's Claure: '3 to 5 Years' to Turnaround
Dan Jones, Mobile Editor, 8/25/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about data center, cloud and the impact of virtualization in the coming years.
Cats with Phones
Cats Are a Smartphone's Best Friend Click Here
Whoever said cats didn't live to please their humans?