As the infrastructure that powers the delivery of over-the-top (OTT) content—namely, the Internet and all its connected pipes—becomes more advanced, it seems like it’s only a matter of time before practically all of the content we consume is sent to us via the Internet.
It appears as though Verizon has seen this writing on the wall. Earlier this month, Verizon CEO Lowell McAdam announced that his company would be launching its own OTT service by the middle of next year. The communications juggernaut already has much of the infrastructure in place to provide this service, and is currently working with media companies to land the rights to their content.
“Basically Verizon is saying, ‘We have the network capacity; we have the ability to negotiate with content partners’—because they have their own FIOS network. So, they kind of have all the things in place,” explains Mike Santoli, a senior columnist at Yahoo Finance, who analyzed the announcement in an interview. “Live streaming programs, at least on a limited basis, [is] going to be the thing that differentiates [this service].”
Earlier this year, Fox reached a deal with Netflix that allows the leading OTT provider to stream its new show, “Gotham,” a year after it runs on primetime television. But Verizon may very well have the clout that encourages media companies to offer them the rights to stream shows the minute they go on network airways.
In recent years, cable providers have added more and more channels to their customers’ subscriptions. Rather than having a choice as to what channels they can access, they’re stuck with paying relatively hefty bills for what amounts to an impressive amount of channels that go completely unwatched.
As a result, consumers are eying their other options. And one such option is making the decision to substitute their television subscriptions with content from an OTT provider. Because Verizon is uniquely positioned—media entities depend on its infrastructure to deliver content to their customers—it will be interesting to see what happens when the company negotiates contracts for its new digital service.
In any case, Verizon sees that OTT content will be hugely important in the coming years and, wisely, is getting involved.