Friday, September 20, 2013

Will Telco Video Services Go Nationwide, as Mobile Services Have?

There is an important dimension of the Verizon Communications effort to provide, for the first time, out-of-home access to live TV feeds its FiOS customers have paid for as part of their TV services, that has nothing to do with streaming and linear video.

That new dimension is an ability by Verizon or other place-based service providers to escape the bounds of their local operating territories. In other words, Verizon might someday be able to sell Internet-based video entertainment of the sort it now sells to FiOS TV customers within the geographic footprint of its fixed network.

We aren’t there yet, but Verizon is making progress, launching an upgraded version of its FiOS Mobile App that, for the first time, provides out-of-home access to live TV feeds, starting with nine channels: BBC America, BBC World News, EPIX, NFL Network (tablet only), HGTV, DIY, Tennis Channel, Food Network and Travel Channel.

The FiOS Mobile App also delivers select local channels depending on where they currently are in New York, New Jersey, Philadelphia, and Washington, DC.

Verizon’s browser-based FiOS TV Online service now offers 69 live TV channels that are accessible by authenticated customers in the home or on the go.

Verizon FiOS customers have been able to watch live television on their iPads, while connected to their in-home broadband access networks.

So far, no video service provider has permission from all programing networks to stream all standard fixed network service everywhere.  Time Warner Cable, Comcast, DIsh, Cablevision, and DirectTV all offer some level of live content that can be watched outside of the home.

Beyond the implications for the way people consume TV services, the coming change will be that fixed network service providers will be able to sell that content to customers anywhere in the United States, so long as they have access to a suitable broadband connection.

That could have important implications for the addressable market available to Verizon, which has a relatively limited U.S. fixed network footprint. AT&T also would benefit, but AT&T has a bigger network footprint.

One reason video service market share for AT&T and Verizon has slowed, though the telcos continue to take market share from cable operators, is that they cannot offer service everywhere.

An out of market capability could accelerate market share gains by telcos.

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