Light Reading
In another video deal, Verizon buys Intel's OnCue cloud TV platform for an undisclosed sum, with plans to integrate it into both FiOS TV and mobile operations.

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
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   >   >>
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed