Acquisition prelude to ‘over-the-top’ delivery
LOS ANGELES – Someday, the full lineup of channels from Verizon’s FiOS TV service may be available on your phone.
That’s the vision outlined Tuesday after telecommunications giant Verizon Communications Inc. announced that it’s buying Intel Media, a division of Intel Corp. that’s been preparing to launch a service that streams TV channels over the Internet.
Verizon said the acquisition will help it accelerate the development of a next-generation video service based on Internet protocols and reduce the cost of building its own. Verizon FiOS video subscribers can stream some live channels over mobile devices, but the selection is limited and most channels can’t be viewed outside the home.
Terms of the transaction were not disclosed.
The company said that with its pending purchase of Vodafone’s stake in Verizon Wireless, which gives it complete control by Feb. 21, it will create a better TV product that works on mobile devices.
Francis Shammo, Verizon’s chief financial officer, told investors the company is positioning itself to compete in “the whole mobile-first world in video.”
Gerard Hallaren, an analyst with Janco Partners Inc., said the acquisition prepares Verizon for the day when all TV signals are delivered via the Web, in what is come to be known as an “over the top” service like Netflix, Hulu or Amazon Instant Video.
Today, full pay TV service requires being in the service area of cable TV or telecoms providers. An “over-the-top” service would allow Verizon to provide a TV package outside of its service area.
“The entire TV market five years from now will be ‘over the top,’ ” Hallaren said. “Verizon is getting in fairly early here.”