& 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 Interviews
Heavy Reading: The Web-Scale View

1|18|17   |     |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's former chief analyst Patrick Donegan shared insight from the recent web-scale operators report, which featured research on how web-scale operators view the market, the best web-scale companies to ...
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (0) comments


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


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. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Next Plugfest Gets G.fast Closer to Market
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 1/13/2017
TV's Paradox: No HDR Without 4K
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
Nokia CTO: 2017 Is the Year 5G Gets in the Field
Dan Jones, Mobile Editor, 1/19/2017
Cable Has One Thing Verizon Needs
Mari Silbey, Senior Editor, Cable/Video, 1/17/2017
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
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.