FiOS TV Director Cuts the Cord

Maitreyi Krishnaswamy, director of FiOS TV, has a confession, and it doesn't bode well for the future of Verizon's fixed-line video business.

"I've pretty much cut the cord," Krishnaswamy admitted on a panel at the TV of Tomorrow event in New York City.

Krishnaswamy is bullish on Verizon Communications Inc. (NYSE: VZ)'s new Go90 mobile video service, but she readily acknowledges there are major challenges in the traditional pay-TV business. (See Verizon's Go90 Is Live – Will Anyone Watch?)

Young audiences like TV shows, but they don't want to pay a lot to get them. And apparently, neither does Krishnaswamy.

Participants in the TV of Tomorrow NYC event include, from left to right, Luc Perreault, VP at The Weather Network; Sherry Brennan, SVP at Fox Networks; Tony Goncalves, SVP at DirecTV; and Maitreyi Krishnaswamy, director of FiOS TV, Verizon
Participants in the TV of Tomorrow NYC event include, from left to right, Luc Perreault, VP at The Weather Network; Sherry Brennan, SVP at Fox Networks; Tony Goncalves, SVP at DirecTV; and Maitreyi Krishnaswamy, director of FiOS TV, Verizon

The future of all of Verizon's fixed-line businesses has come into question recently with the sale of the company's FiOS footprint in California, Florida and Texas to Frontier, and rumors that Verizon is looking to sell off its enterprise business. (See Verizon Enterprise Sale Would Signal Big Shift.)

Verizon has vehemently denied that it's abandoning both FiOS and enterprise services, but it's also made very clear through its investments that wireless and OTT video are the company's priorities. Krishnaswamy reiterated that notion at the TVOT conference saying, "We are definitely positioning ourselves very clearly for the over-the-top future."

Unfortunately for Verizon, it's not clear that Go90 will gain the traction with millennials that it needs. The two young speakers on the TVOT panel said they had heard of Go90, but hadn't tried it out.

"I'm not too sure why I haven't, I guess I just kind of sometimes get lost in all the new platforms that are launching," said Nina Pablo, Strategy and Business Development Associate at BRaVe Ventures and recent MBA graduate. But she added, "It's definitely on my radar."

For Krishnaswamy, Go90 is not only on the radar, it's getting promotional priority over her own FiOS TV.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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mendyk 12/7/2015 | 11:51:06 AM
Yeah, well... Video service providers would be much less ambivalent toward conventional video bundles if the margins were better. Still, the statement is more than a little jarring. Almost like having a CXO from Shake Shack declaring she's a vegan.
msilbey 12/7/2015 | 11:58:26 AM
Re: Yeah, well... Very true, although Comcast still seems to be making margins on the video side. Not as much as they once did, but they are still very committed to the video business. Looks like we'll end up with a handful of companies that are. 
Mitch Wagner 12/7/2015 | 12:37:40 PM
Re: Yeah, well... Agreed. Really a bad sign when the head of a service doesn't use their own service. 
KBode 12/7/2015 | 1:08:21 PM
Re: Yeah, well... Though on the plus side Verizon execs historically have had their heads less in the sand than other industry executives. They've admitted cord cutting is real and is something they need to adapt to for years, compared to countless execs who think that if you just pretend something isn't reall, you won't have to change the way you do business.


Still, the exec in charge of Verizon's TV business admitting she no longer thinks the TV business is relevant (more or less) is pretty damn funny.
wanlord 12/7/2015 | 1:44:03 PM
ha If she has actually used Go90 I bet she wouldn't have cut the cord and wouldn't be bullish on it. 
mendyk 12/7/2015 | 1:56:13 PM
Re: ha Exactly -- which is why her statement about video service doesn't quite ring true. It sounds more like a pre-approved talking point to reinforce the idea that Verizon wants cost relief for video content.
cnwedit 12/7/2015 | 2:05:57 PM
Re: ha For a lot of telecom companies, the issue is that there are no real profits delivering video - it's eaten up by content costs. I  remember at least 10 years ago hearing warnings from some of the small telcos that were early to the IPTV game that the recurring cost of video content made that business very different from anything that telecom was used to selling. 

Comcast owns enough content that it benefits on the one hand from increases in content costs, even as its margins are squeezed on the other side. 

The bottom line of Mari's story is that cord-cutting is a very real phenomenon especially among younger viewers. Let's face it, Millenials are being priced out of the housing market, so they are creating the kind of households that will sustain high-cost video content packages.
mendyk 12/7/2015 | 2:12:23 PM
Re: ha Yes -- binge-watching Game of Thrones on a smartphone in the comfort of your tent (located near a free wi-fi source) may be the wave of the future.
msilbey 12/7/2015 | 2:26:08 PM
Re: ha I tried Go90. it wasn't pretty.
mendyk 12/7/2015 | 4:46:24 PM
Re: ha When most video is "over the top," what exactly would the differentiation be for a company like Verizon? It's not clear that VZ has figured this out yet. Mostly, VZ seems to be figuring out the things it DOESN'T want to do.
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