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Will Verizon (VZ) Gain From Theme-Based TV Streaming Service?
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Verizon Communications Inc (VZ - Free Report) is reportedly planning to launch a theme-based online streaming TV service in 2018.
The telecom service provider will offer channels based on themes like news, sports and entertainment. All these channels will be offered as a standalone application. The content is likely to come from Oath properties like TechCrunch, Engadget, Huffington Post and premium content from third-party sources.
The news follows the company’s latest initiatives to boost digital media portfolio. Verizon has inked a five-year digital streaming deal with National Football League (NFL). The telco paid approximately $2.25 billion to stream NFL’s content on its digital and mobile media platforms.Additionally, Verizon signed an extended carriage deal with A+E Networks, to broadcast the latter’s programming in its digital media suite. Other than A+E cable networks, games like National Women’s Soccer League will also be streamed on Yahoo Sports and Go90 platforms. The respective contents will be broadcast under Verizon’s Oath brand.
Oath, is a digital content and online advertising suite, formed with the combined business of Yahoo and AOL Inc. It is Verizon’s newly-formed company under Media and Telematics organization.
With A+E Networks and NFL streaming under Oath, Verizon projects more than $20-billion revenues by 2020. Such important deals are likely to drive Verizon’s advertising revenues. With Oath, the telco has managed to reach more than 200 million mobile and digital viewership in the United States. The company is primarily targeting young viewers and consumers who do not subscribe to traditional pay-TV packages.
Meanwhile, Verizon’s plans to launch 5G wireless residential broadband services (in three to five U.S. markets) in 2018 will boost streaming services launch. The first commercial launch is scheduled in Sacramento, CA, in the second half of 2018.
However, Verizon’s streaming TV services’ launch has been delayed due to several factors including technological hurdles, problematic negotiations with broadcasters and programmers and media chief Marni Walden’s imminent exit from the company.
Similar OTT Launces
Internet-TV streaming service is gaining market traction gradually in the United States. Recently, the legacy pay-TV industry has been facing stiff competition from online video streaming service providers such as Netflix, Hulu.com, YouTube etc. because of their cheap source of TV programming. The low-cost over-the-top (OTT) video streaming service has led to massive cord cutting, which is currently threatening the pay-TV business model. Video offering, which represents the core business function of pay-TV operators, is losing popularity.
Consequently, Internet-TV streaming has emerged as a strong alternative to counter this competitive threat.
Recently, T-Mobile US Inc (TMUS - Free Report) announced plans to launch its own TV streaming service in 2018, after the company inked a deal to acquire Layer3 TV, Inc. Based in Denver, CO, Layer3 TV is a cable company operating in Chicago, Washington DC and Los Angeles.
Major pay-TV operators such as AT&T Inc. (T - Free Report) , DISH Network Corp. and Sony Corp. have already launched Internet-TV streaming services. AT&T’s DirecTV Now includes 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.
Is Cannibalization a Concern?
A major concern for Verizon is that its Internet TV streaming services do not cannibalize other services. The concern is the same for all the pay-TV operators, who have entered into Internet TV streaming. Notably, most of these companies are offering legacy pay-TV services and Internet TV streaming service, with selected channels at lower costs.
The operators are yet to find out an appropriate trade-off between these two types of services. Making attractive online ventures are drawing subscribers to the new service at the cost of traditional pay-TV business model. Ultimately, the Internet TV service is yet to stop cord cutting, the biggest threat for pay-TV operators.
Verizon portrays an impressive price performance. In the past six months, shares of Verizon rallied 18.8% compared with the industry’s gain of 2.7%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Will Verizon (VZ) Gain From Theme-Based TV Streaming Service?
Verizon Communications Inc (VZ - Free Report) is reportedly planning to launch a theme-based online streaming TV service in 2018.
The telecom service provider will offer channels based on themes like news, sports and entertainment. All these channels will be offered as a standalone application. The content is likely to come from Oath properties like TechCrunch, Engadget, Huffington Post and premium content from third-party sources.
The news follows the company’s latest initiatives to boost digital media portfolio. Verizon has inked a five-year digital streaming deal with National Football League (NFL). The telco paid approximately $2.25 billion to stream NFL’s content on its digital and mobile media platforms.Additionally, Verizon signed an extended carriage deal with A+E Networks, to broadcast the latter’s programming in its digital media suite. Other than A+E cable networks, games like National Women’s Soccer League will also be streamed on Yahoo Sports and Go90 platforms. The respective contents will be broadcast under Verizon’s Oath brand.
Oath, is a digital content and online advertising suite, formed with the combined business of Yahoo and AOL Inc. It is Verizon’s newly-formed company under Media and Telematics organization.
With A+E Networks and NFL streaming under Oath, Verizon projects more than $20-billion revenues by 2020. Such important deals are likely to drive Verizon’s advertising revenues. With Oath, the telco has managed to reach more than 200 million mobile and digital viewership in the United States. The company is primarily targeting young viewers and consumers who do not subscribe to traditional pay-TV packages.
Meanwhile, Verizon’s plans to launch 5G wireless residential broadband services (in three to five U.S. markets) in 2018 will boost streaming services launch. The first commercial launch is scheduled in Sacramento, CA, in the second half of 2018.
However, Verizon’s streaming TV services’ launch has been delayed due to several factors including technological hurdles, problematic negotiations with broadcasters and programmers and media chief Marni Walden’s imminent exit from the company.
Similar OTT Launces
Internet-TV streaming service is gaining market traction gradually in the United States. Recently, the legacy pay-TV industry has been facing stiff competition from online video streaming service providers such as Netflix, Hulu.com, YouTube etc. because of their cheap source of TV programming. The low-cost over-the-top (OTT) video streaming service has led to massive cord cutting, which is currently threatening the pay-TV business model. Video offering, which represents the core business function of pay-TV operators, is losing popularity.
Consequently, Internet-TV streaming has emerged as a strong alternative to counter this competitive threat.
Recently, T-Mobile US Inc (TMUS - Free Report) announced plans to launch its own TV streaming service in 2018, after the company inked a deal to acquire Layer3 TV, Inc. Based in Denver, CO, Layer3 TV is a cable company operating in Chicago, Washington DC and Los Angeles.
Major pay-TV operators such as AT&T Inc. (T - Free Report) , DISH Network Corp. and Sony Corp. have already launched Internet-TV streaming services. AT&T’s DirecTV Now includes 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.
Is Cannibalization a Concern?
A major concern for Verizon is that its Internet TV streaming services do not cannibalize other services. The concern is the same for all the pay-TV operators, who have entered into Internet TV streaming. Notably, most of these companies are offering legacy pay-TV services and Internet TV streaming service, with selected channels at lower costs.
The operators are yet to find out an appropriate trade-off between these two types of services. Making attractive online ventures are drawing subscribers to the new service at the cost of traditional pay-TV business model. Ultimately, the Internet TV service is yet to stop cord cutting, the biggest threat for pay-TV operators.
Zacks Rank & Price Performance
Currently, Verizon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Verizon portrays an impressive price performance. In the past six months, shares of Verizon rallied 18.8% compared with the industry’s gain of 2.7%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>