& cplSiteName &

Verizon Snatches Intel Media Assets

Alan Breznick
1/21/2014
50%
50%

In another move to boost its cloud-based multiscreen video capabilities, Verizon plans to buy the assets of Intel Media and integrate them into its FiOS TV and mobile media operations.

Verizon Communications Inc. (NYSE: VZ) announced early Tuesday morning that it will buy the intellectual property rights and other assets behind Intel Media's OnCue Cloud TV platform, including the 350-employee unit of Intel Corp. (Nasdaq: INTC) working on the platform. Terms of the deal were not disclosed.

Intel, which has been shopping around OnCue since the early fall, had reportedly been seeking $500 million for the servers, set-tops, and software that would have been the foundation of a new over-the-top (OTT) pay-TV service. But, with such other potential suitors as AT&T Inc. (NYSE: T), Samsung Corp. , and Liberty Global Inc. (Nasdaq: LBTY) reportedly dropping out of the bidding, industry observers believe that Verizon may have snapped up Intel Media from the chipmaker for considerably less. (See Intel Kissing OTT Goodbye?.)

With the purchase, expected to close by April, Verizon intends to move even more quickly into cloud-based delivery of video services, both over its FiOS fiber-to-the-premises (FTTP) architecture and its wireless network. In the press release announcing the buyout, the company said the deal "will accelerate the availability of next-generation video services, both integrated with Verizon FiOS fiber-optic networks and delivered 'over the top' to any device."

Further, Verizon said it expects to use OnCue to "integrate IP-based TV services with FiOS video to further differentiate FiOS video from traditional cable TV offerings and reduce ongoing deployment costs." With OnCue on board, the telco also said it expects FiOS video customers to "benefit from elegant search and discovery, interactivity, and cross-screen ease of use, integrated with the Verizon Wireless 4G LTE network."

On the company's year-end earnings call Tuesday morning, Verizon CFO Fran Shammo elaborated a bit further on the deal in response to analyst questions. Shammo said Verizon executives looked at either buying a property like OnCue or building their own cloud-based TV platform. In the end, they decided that buying OnCue was the better way to go.

"This really accelerates us," Shammo said. "We are positioning ourselves strategically."

But, as in the past, Shammo indicated that Verizon still has no plans to go beyond its wired footprint and launch its own national OTT video service. Verizon now covers nearly 19 million homes with its FiOS network, with no plans to expand it further.

Notwithstanding the company's rhetoric, some industry observers are not sure exactly what OnCue gives Verizon that it didn't already have. With its previous FTTP, wireless, and content assets, plus its recent pickups of cloud-based video specialists EdgeCast Networks Inc. and upLynk, Verizon had already been thought to possess the capability to deliver cloud-based video and OTT services. (See Verizon Beefs Up TVE Unit and Verizon To Buy EdgeCast.)

The key to the deal may be the software and user interface that Verizon will gain from Intel. While FiOS TV continues to gain new customers, its user interface has not been upgraded much in a while. Meanwhile, such key cable rivals as Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) are now deploying cloud-based guides to their video subscribers. (See TW Cable Beams UI to Cloud.)

Verizon said it aims to retain "substantially all" of the 350 Intel Media employees in Santa Clara, Calif. Most notably, that group includes Intel Media's current management team, which is headed by Erik Huggers, corporate vice president and general manager.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(13)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
KBode
50%
50%
KBode,
User Rank: Light Sabre
1/22/2014 | 1:33:37 PM
Re: It was a huge mistake for Intel from the start
There's a general animosity between cable, broadcast and Netflix, and I'm not sure either Verizon or AT&T feel differently. A lot came from the network neutrality fight, and more recently Netflix's naming and shaming of under-performing ISPs (or ISPs that refuse to partner with their CDN). AT&T wants nothing to do with the OTT market, and Verizon seems like it would be a point of pride to dethrone Netflix, not acquire them (and a lot of duplicate CDN assets).

That said, Verizon isn't very good when they try to create "me too" services. It's simply outside their comfort zone and they're not very good at innovation in content (with a few exceptions, like the FiOS set top). So even if they did try to create a Netflix killer I'm not sure they'd pull it off.
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
1/22/2014 | 10:50:54 AM
Re: It was a huge mistake for Intel from the start
 

Kb and others,

I agree with you about Netflix and as I have posted in other places, I view VoD as competing with Netflix.

But here is my question.  If I was say AT&T or Verizon and really wanted to get into OTT in a big way, wouldn't just be simpler to buy Netflix?  More expensive than trying to rebuild Intel assets, but you would be big right now.

seven

 
KBode
50%
50%
KBode,
User Rank: Light Sabre
1/22/2014 | 9:42:34 AM
Re: It was a huge mistake for Intel from the start
"Can Verizon make a go of it?  Possibly, but given legacy services with high margins, there are disincentives to aggressively market OTT services.  In general, I have observed that most telcos and MSOs do not compete effectively against subscription style services like Netflix - not sure if it is the pricing, UI or library, but most seem to be inferior offerings."

It's kind of unfortunate because they're perfectly situated to be the ones that finally are able to be disruptive with an OTT play, and I've read numerous reports over the years indicating they've at least considered it. A national core network, wireless assets, their RedBox venture, an existing relationship with broadcasters....

It's a shame that despite all this the end result will be more of the same simply because they're afraid of upsetting the legacy apple cart. I think such a service would be immensely profitable in time, but investors and these execs lack patience (see the endless hemming and hawing on FiOS rate of return speed for only one example).
David Dines
50%
50%
David Dines,
User Rank: Blogger
1/21/2014 | 7:26:02 PM
Re: It was a huge mistake for Intel from the start
Alan, I am not sure, but I would venture to say that since they own the infrastructure and have the customer relation, they could have a cost advantage and the abilty to offer new or enhanced services. It will be interesting to see how they package / price it and their business model.  
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/21/2014 | 6:08:41 PM
Re: It was a huge mistake for Intel from the start
Yep, David. i agree about Intel. Always wondered what they were doing in that spaceto begin with. Now Verizon seems to think it knows something the other players don't. Any idea what that would be?    
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/21/2014 | 6:07:06 PM
Re: What will the mobile applications be?
Eventually, not sure exactly what it would look like yet.
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/21/2014 | 6:06:21 PM
Re: What will the mobile applications be?
So when do you think Verizon might actually do something with broadcast LTE, Dan? And what would it look like?
David Dines
50%
50%
David Dines,
User Rank: Blogger
1/21/2014 | 5:13:54 PM
It was a huge mistake for Intel from the start
It was clear from the beginning that the chances of success for Intel were between slim and none.  Beyond the practical and obvious obstacles to making a service successful, this service is so far beyond their core competency that it makes one wonder how decisions are vetted.

Can Verizon make a go of it?  Possibly, but given legacy services with high margins, there are disincentives to aggressively market OTT services.  In general, I have observed that most telcos and MSOs do not compete effectively against subscription style services like Netflix - not sure if it is the pricing, UI or library, but most seem to be inferior offerings.

It will be interestimg to see how Verizon does with it.
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/21/2014 | 2:20:30 PM
Re: What will the mobile applications be?
Well, Verizon *is* starting to get it together for broadcast LTE...
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
1/21/2014 | 1:30:45 PM
Re: What will the mobile applications be?
Totally agree with you KBode.  I don't think they (content providers) even know what a new model would look like, ala carte channel selection let alone OTT.

So we need someone to do what Steve Jobs did with the music industry?  Well Sorta but not really, we do someone to push a new model and change the way content was distributed to the customers, but the music execs were also in a panic.  Today, content providers seem to be in control of the distribution still.

Thoughts on what the catalyst will be?
Page 1 / 2   >   >>
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
4.5G Evolution: Peter Zhou on Advanced MIMO Technologies & 5G Business Prep

2|25|17   |     |   (0) comments


In the process of service transformation, operators need to catch three major opportunities and start deploying in 4.5G networks, such as video, household broadband access and digital transformation of vertical industries. 5G is coming. Operators don't need to wait for it to happen but should progressively deploy 4.5G networks by introducing 5G-oriented ...
LRTV Custom TV
What WTTX Can Deliver

2|23|17   |     |   (0) comments


Mohamed Madkour explains the benefits of WTTX while Dimitris Mavrakis discusses the challenges of delivering home broadband access.
LRTV Custom TV
Huawei on Mobile Broadband

2|23|17   |     |   (0) comments


Mohamed Madkour shares his vision on MBB for the next three years.
LRTV Custom TV
Analysys Mason Talks About the Future of Digital Operations

2|23|17   |     |   (0) comments


The future of digital operations has three key aspects: 1. Highly automated operations for both service and network; 2. Highly converged BSS/OSS for business and resources; 3. Highly merged management and control for real-time cloud native operations.
LRTV Interviews
Software Trends in the Telecom Sector

2|23|17   |   03:40   |   (0) comments


Heavy Reading senior analyst James Crawshaw talks with Telecoms.com Editorial Director Scott Bicheno about trends and developments in the telecoms software sector and what to expect at MWC 2017.
LRTV Custom TV
Huawei's Pre-MWC Analyst Briefing 2017 Highlights

2|22|17   |     |   (0) comments


Huawei shares its vision for this year's MWC.
LRTV Interviews
MWC17: 5G, Cloud RAN & More

2|21|17   |   04:35   |   (0) comments


Ovum Senior Analyst Julian Bright talks to Scott Bicheno from Telecoms.com about all things MWC, including Cloud RAN, Huawei's pitch to the industry and the road to 5G.
LRTV Interviews
MWC 2017's Key 2-Letter Terms

2|20|17   |   08:29   |   (1) comment


5G, AI, VR... these are just some of the two-letter terms that will dominate show-floor chat at MWC 2017 in Barcelona, according to these two blow-hards (a.k.a. Scott Bicheno of Telecoms.com and Light Reading's Ray Le Maistre). And then there's PB...
LRTV Interviews
Key Trends for Mobile Operators in Developing Markets

2|20|17   |   06:37   |   (0) comments


Ovum's Matthew Reed talks to Scott Bicheno from Telecoms.com about the challenges and opportunities facing mobile operators in the developing markets of Africa and the Middle East.
LRTV Documentaries
YouTube Takes on Facebook Live-Streaming

2|17|17   |     |   (0) comments


Popular 'YouTubers' will be the first to get the new service on their smartphones. You have been warned.
LRTV Custom TV
Open Source NFV/SDN Automation

2|17|17   |   05:54   |   (0) comments


AT&T ECOMP (Enhanced Control, Orchestration, Management and Policy) code is transitioning into the Linux Foundation for placement into open source. In this video, Carol Wilson provides an update on the maturation of open source ECOMP and meets with industry leaders from AT&T, Bell Canada, Orange, Linux Foundation and Amdocs to discuss what this means for the ...
LRTV Documentaries
Uber & NASA Collaborate on Flying Car Project

2|16|17   |     |   (0) comments


Is Uber for real? Well, it's hired NASA engineer Mark Moore to lead the project, and he wouldn't come cheap.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
March 22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Uber's HR Nightmare: Company Investigates Sexual Harassment Claims
Sarah Thomas, Director, Women in Comms, 2/21/2017
Broadband Has a Problem on the Pole
Mari Silbey, Senior Editor, Cable/Video, 2/21/2017
Verizon to Start Fixed 5G Customer Trials in April
Dan Jones, Mobile Editor, 2/22/2017
Sprint to Go Gigabit Crazy at MWC!
Dan Jones, Mobile Editor, 2/22/2017
MANO Marriage: ECOMP, Open-O Converge as ONAP
Carol Wilson, Editor-at-large, 2/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
No One Likes This Click Here
Take a hint!
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.