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Will Verizon (VZ) Launch Online TV Streaming Service in 2017?

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The telecom industry circle is currently ripe with the rumor that Verizon Communications Inc. (VZ - Free Report) will unveil its much-hyped online TV streaming service by year-end, after the company inked a five-year digital streaming deal with the National Football League (NFL).

In March 2017, Bloomberg reported that this new service will be launched by September 2017. However, in October, AdAge reported that the telecom behemoth has deferred its OTT (over-the-top) TV service by the end of 2017.

Per the latest deal, Verizon will pay approximately $2.25 billion to stream NFL’s content on its digital and mobile media platforms. The company will also allow customers of other telecom operators to watch NFL games on smartphone, regardless of his/her carrier. (Read: Verizon Inks Multi-Year Digital Streaming Deal With NFL)

Initially, Verizon had decided to come up with dozens of channels nationwide for online TV streaming service. Management was negotiating with several TV network owners to secure online streaming rights. It also stated that the new service will include some innovative features to differentiate its offering from the existing products in the market.

Notably, Verizon offers fiber-optic based FiOS TV services to its residential customers. This service is similar to that of cable TV operator’s traditional video offerings. At present, the company is on the verge of carrying out test trial runs for its IPTV upgrade.

In 2015, the company launched go90 - a YouTube-like streaming-video service - for teenagers. Nevertheless, the new online streaming video service will be different from the previous two offerings as it will compete with established low-cost streaming video services like Netflix Inc. (NFLX - Free Report) and Amazon.com Inc.’s (AMZN - Free Report) Prime video.

Meanwhile, Internet TV streaming service seems to gain market traction gradually in the United States. Of late, the legacy pay-TV industry has been facing stiff competition from online video streaming service providers. In fact, the low-cost over-the-top video streaming service has resulted in massive cord cutting that is currently threatening the pay-TV business model.

As a result, Internet TV streaming has emerged as a strong alternative to counter this competitive threat.

Major pay-TV operators such as AT&T Inc. (T - Free Report) , DISH Network Corp. and Sony Corp. have already launched their Internet TV streaming services.

AT&T’s DirecTV Now include channels like E!, FX, TBS and TNT. DISH Network’s Sling TV offers channels like ESPN, AMC, Cartoon Network, HBO and Univision. Sony’s PlayStation Vue provides a portfolio of channels like Bravo, Fox News, Nickelodeon and USA.

Price Performance



Shares of Verizon have gained 14%, outperforming the industry’s growth of 2.9% over the last 90 days. Also, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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