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Will Cable Buy What Verizon DMS Is Selling?

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Can Verizon Communications Inc. (NYSE: VZ) and cable get along as swimmingly as The Captain and Tennille?

We may find out soon enough, because cable operators are one of the key customer targets identified by Verizon Digital Media Services for a new digital media content factory and management system that aims to connect consumers to content on any access network and any device. (See Verizon Fires Up Digital Media 'Factory' and What Verizon DMS Isn't.)

The Verizon Digital Media Services distribution utility is being crafted to manage, on behalf of the service provider, the delivery of video in a wide variety of formats to IP-connected devices including TVs, tablets and smartphones.

The Verizon Digital Media Services ecosystem and wholesale approach would supposedly reduce the cost and complexity of TV Everywhere services. But MSOs won't have to decide yet whether they want to team up with what amounts to a primary competitor. Verizon wants to get the system up and working before trying to tackle the traffic volumes that cable operators have, says Verizon Digital Media Services President David Rips.

He adds that Verizon Digital Media Services could offer an MSO such as Comcast Corp. (Nasdaq: CMCSA, CMCSK) some help with delivering unicast streams to its own networks, or possibly help it deliver content, including live and on-demand video, outside of its traditional footprint. It's the second scenario in which the ubiquity of the Verizon Digital Media Services platform really comes into play, Rips adds.

The unicast delivery mechanism isn't expected to roll out until the first quarter of 2012, says Verizon Digital Media Services CTO Stu Elby. The first element -- digital content distribution services -- will focus on content creators.

Regardless of the potential benefits, how would MSOs feel about having to trust a competitor?

Tier 2 and 3 operators might not mind. "Smaller cable MSOs might not have that capability, so Verizon could certainly offer them something," says Current Analysis Senior Analyst of Digital Media Infrastructure Yoav Schreiber.

He believes large operators could also find something to like, with respect to a large-scale approach to federated content delivery networks that can help MSOs squeeze out costs.

Comcast, for example, may be intrigued with the idea of not having to secure every content agreement on its own if it can lean on Verizon's partnerships and come to a revenue-sharing arrangement, Schreiber says.

In the meantime, U.S. cable already has several other options at its disposal, along with a number of homegrown content delivery network (CDN) efforts that could complement (or possibly compete with) Verizon's new initiative.

Comcast has deployed a video CDN to help boost capacity for video on demand. The current version of it, linked to Comcast's Project Infinity, is being used to offer more than 25,000 on-demand titles to traditional digital cable boxes. However, the company has discussed using it to deliver video to other types of devices. (See Comcast's 'Project Infinity' Takes Flight .)

Time Warner Cable Inc. (NYSE: TWC), meanwhile, has created a centralized facility, believed to be based in the Denver area, to deliver live, linear TV streams to iPads over the MSO's proprietary network, with the potential to serve other kinds of tablets and perhaps connected TVs, as well. (See TW Cable's iPad TV App Changes Channels, TWC's iPad App Launches With (Some) Live TV, CES 2011: Samsung Puts MSOs in the Picture and Time Warner Cable Hints at Video CDN Plan .)

Additionally, Synacor Inc. , which counts Charter Communications Inc. among its TV Everywhere customers, just signed with Akamai Technologies Inc. (Nasdaq: AKAM). (See 'Adobe Pass' Targets TV Everywhere, Akamai, Synacor Team on TV Everywhere and TV Everywhere Starts Getting Somewhere .)

— Jeff Baumgartner, Site Editor, Light Reading Cable

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User Rank: Light Beer
12/5/2012 | 5:07:47 PM
re: Will Cable Buy What Verizon DMS Is Selling?

Right now I am in my basement using my Sling Box to view my DVR on my laptop. I can be on Mars,and still view my DVR or set-top box using my Sling box. This same technology can be used to deliver TV everywhere so why would the cable companies need  Verizon's help?

Jeff Baumgartner
Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:07:39 PM
re: Will Cable Buy What Verizon DMS Is Selling?

I'm still wondering who will be the first US MSO to use a SlingLoaded box and/or the new  Sling Adapter.  Some tier 2s have been looking at them but haven't pulled the trigger yet. JB

User Rank: Light Beer
12/5/2012 | 5:07:36 PM
re: Will Cable Buy What Verizon DMS Is Selling?

Yeah that  Verizon proposal just sounds ridiculous to me.I guess it is the old adage, can't beat them, then join them,and right now, Verizon is getting their ass whipped on all fronts!

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