Verizon, the No. 1 wireless provider, apparently thinks there’s room for another live streaming service for traditional TV: It’s negotiating with network owners for rights to offer their programming online as early as this summer, Bloomberg reports.
Verizon declined to comment.
The telco may have tipped its hand two weeks ago when it announced that its FiOS service agreed to a new retransmission deal with CBS. The companies said that the terms enabled them to “expand the partnership to future digital platforms, with specifics to be released at a later date.”
Also possibly related: this morning the company revamped its operating structure around Media and Telematics, Network and Technology, and Customer and Product Operations. It hired former Ericsson CEO Hans Vestberg to run the Network and Technology team.
Marni Walden will run Media and Telematics, reporting to CEO Lowell McAdam. She will be “responsible for quickly scaling these businesses into major contributors to Verizon’s future growth,” the announcement says.
McAdam adds that the arrangement should “accelerate our progress toward delivering the promise of the digital world to customers.”
A live streaming TV service would represent a shift in strategy for Verizon. It has focused on its Go90 platform that targets short form video to mobile users. In 2015 the telco bought AOL, and by the end of June it expects to close its $4.48 billion deal to buy Yahoo’s media assets.
But in February the company scrapped its plan to create a premium short-form video service with AwesomenessTV, in which it owns a 24.5% stake.
A month earlier, Verizon laid off 155 Go90 employees — mostly in San Jose. It said that it made the decision to reduce duplication and it was “not indicative to a change in our strategy and we remain committed to rapidly enhancing our existing online video products and delivering new products.”
Executives acknowledged in a February meeting with Cowen and Co’s Colby Synesael that Go90 is not going “as well as hoped,” the analyst reported. The company added, though, that the service’s woes had been “overly exaggerated by the media” as reports failed to appreciate its late 2016 acquisition of short form video creator Vessel, which was created by former Hulu chief Jason Kilar.
Even so, Verizon may feel some pressure to keep up with AT&T which bet heavily on traditional TV programming with its acquisition of DirecTV and agreement to buy Time Warner.
Last year AT&T introduced its live-streaming service, DirecTV Now. Similar offerings include Dish Network’s Sling TV, Google’s YouTubeTV, and Sony’s PlayStation Vue. Hulu plans to launch its own live service soon. Comcast also is lining up rights for a possible service in the areas where it has franchises.
Verizon’s share price has slipped about 9.5% over the last 12 months as investors wonder about its next move as the mobile market matures while the wireline phone business continues to decline.
There’s been some speculation that Verizon might roll the dice and try to buy a major cable operator such as Charter. That could help satisfy the telco’s mobile traffic backhaul needs as it prepares to use speedy new 5G wireless technologies for last-mile transmissions.
Although Donald Trump said during the campaign that he opposed AT&T’s plan to buy Time Warner, and Comcast’s acquisition of NBCUniversal, his FCC and the Justice Department appointees appear to have few problems with mega-mergers.