Verizon’s Never-Say-Die TV Aspirations
Those who follow the overlapping worlds of online video, streaming services, live online TV, and all of its permutations have short (or perhaps selective) memories. The excitement over Verizon closing the mega-deal to purchase AOL is, to say the least, misplaced. Many believe VZ’s assets in the area of a live-TV platform (the one it bought from Intel), snazzy ad-tech platform (from AOL), and infrastructure pieces (which it calls Acquire) make it a sure-fire bet to launch a successful service to compete with Sling, Sony Vue, and others who want to place a bet on the video services roulette wheel.
The facts tell us that Verizon will face more than a few challenges in its attempt to innovate in the TV service space. Wait, Verizon already is in the TV services space with an IPTV product called FIOS. What’s this we hear, customers, partners, and municipalities are PO-ed at Verizon for not living up to its promises when given permission to operate in their jurisdiction? When the biggest city in the US calls your service “an egregious failure,” what are you chances for goodwill in any future similar endeavors? Seven years ago, Verizon promised everyone in New York who wanted the service they would be granted their wish. As many reports point out, that was an empty promise.
Even with its announcement of Scripps being added to its programming lineup, Verizon has been quiet in speaking to its proposed channel roster. Will the carrier be able to leverage retrans deals it made with networks via FIOS, or will it have to start from scratch? It makes you wonder.
While many not as headline grabbing, it also seems somewhat scary that Verizon plays big brother when it comes to your TV viewing habits. FIOS customer service reps are keenly aware of your viewing habits when you call for questions or to cancel your service. That lack of privacy may not bother some, but knowing that a marketer is aware that I watch old “Mr. Ed” reruns in the middle of the night seems a bit over the top.
Will VZ employ the same micro customer analytics for a new service? Early reports tells us that even before a launch date VZ is sidling up to advertisers giving them the opportunity to sponsor binge watching; I would imagine deep insight into viewers has to be part of that package.
Lastly, and this is a big one. Going back to the days when Verizon’s piece parts — Bell Atlantic, Nynex, and GTE — were independent companies, efforts to provide information/content services were generally dismal failures. Each of these former RBOCs has the chance to own what was called the “interactive services” market, but decided against or completely fumbled such plans. While it’s shortsighted to dwell on the past, I would challenge Verizon to explain what wins it’s had in anything other than basic telecom/wireless services.
Sorry to rain on Verizon’s plans to take over the streaming TV business, but even though I was born on the East Coast, in spirit I am from Missouri. (The Show Me State).
While many viewed the news that Hulu would be adding Showtime to its service at a discounted rate as somewhat fair-to-middlin’ news, I went into overthink mode and determined it’s a major sign of things to come.
At the end of the day (as one of my former bosses would say), it shows two media companies in search of just the right content model to go beyond the sustainability mode and move up the over-the-top TV ladder. Stripped down to its basics, we find a partnership of mutual convenience where future competitors might wind up as more than streaming pals. Will Hulu buy Showtime at some point? Don’t rule it out. What could be more valuable to an eight-year-old streaming service than a deep content library and a slate of top-quality original programming?
At the moment, for Hulu, offering Showtime at a discount could bring new subs into the pack, perhaps reduce churn, and become slightly more competitive with Netflix. In reality, though, if you put aside its so-so sports programming for a moment, the CBS-owned pay network looks slightly more like Amazon Originals than it does a premium network that once was a must-have for cable and satellite viewers. From that point of view, if the navigation between services for those who buy the value-added bundle is seamless, Hulu can keep an eye on how such notable original series such as “Californication,” “Dexter,” “Nurse Jackie,” and some of the earliest episodes of “Homeland” add to overall viewing time.
The more difficult part of the equation is how to decipher CBS Corp.’s streaming plans. In 2014, CBS launched an “All
Access” streaming service for $5.99, which covers its network programming. A few months ago CBS President/CEO Les Moonves said the new streaming net had more than 100,000 subs and announced it would add the service to the Roku platform. There was no mention as to if there was a plan to combine All-Access and Showtime to create a super-service. At the same time, CBS has said it was considering selling off some of its assets — namely owned-and-operated TV stations and some of its radio network. Is Showtime on the block?
Which puts forth the question as to whether selling Showtime make sense for CBS. After reading a confusing piece in Motley Fool, I understand Showtime is a top asset for its cable network business, but that business is a small part of the group’s overall revenue. The part I find confusing is that many believe by offering a standalone app, it will allow CBS to ask for higher retrans rates from cable and satellite providers for its services. I fail to see the logic in that.
On the other hand, with more than 70 million subs worldwide, Showtime could fetch a pretty penny as well as allow Hulu to broaden its geographic footprint. But dollars and sense could price Showtime out of Hulu’s range unless it were to either go public or offer CBS a share of the company. At $100 per global sub, the price tag would be $7 billion. But then again, with a market cap of $40 billion, Netflix could be a likely suitor. Or Amazon, or….