Verizon has been in talks to buy Intel’s over-the-top video service, OnCue, for the past couple of months, and just last Friday Bloomberg reported that the two companies are now very close to a deal. The names Verizon and Intel don't scream video innovation, but Verizon could use the OnCue technology in a number of creative ways that give you more avenues for watching TV when and where you want.
Verizon hasn’t said what it intends to do with OnCue, but the most likely scenario is that it will use OnCue to build a new Internet video feature into FiOS TV, its own fiber-powered pay TV service. The technology could allow subscribers to watch their FiOS TV programming through an OnCue front end from anywhere, and on any device, with an Internet connection. For example, if you subscribe to a premium channel like Showtime, you could watch Homeland on your notebook, tablet or smartphone, even if you're half way around the world from your actual TV.
This feature would give Verizon a leg up in the cable wars, because right now no other pay TV service (save Comcast’s limited-availability X1 service) offers "place-shifting" capabilities built directly in. Right now, FiOS TV service is available only in selected areas of 16 states where Verizon has built its dedicated fiber network. But with an OnCue service, Verizon could conceivably sell FiOS TV nationwide, as customers might be able to access all content directly online.
It certainly sounds possible, but extending TV service beyond the FiOS footprint isn't a purely technological undertaking, as IDC video entertainment analyst Greg Ireland points out.
”Verizon would have to negotiate all new carriage deals with its video content providers, and it’s not clear how receptive the content owners would be to having their content streamed outside the FiOS footprint,” Ireland says.
While FiOS has limited reach, Verizon’s wireless network is nationwide, Ireland points out. If Verizon can make deals with the content owners, it may be able to use OnCue to offer an enhanced video service tailored for Verizon wireless customers.
Another possibility, as I’ve speculated before, is using OnCue to create an online video platform for Redbox, the CD-by-mail-and-kiosk company Verizon already partners with. This would create a web TV service that would go head-to-head with Netflix and Amazon.
What's clear is that Verizon has some kind of internet video initiative in the works. The company just bought the content delivery network Edgecast, and acquired the internet video infrastructure company UpLynk last month.
We’ll have to wait until next year to see what Verizon actually delivers. All of the potential services could be interesting to consumers, if they aren’t overpriced.
And the launch of any of the above services might put pressure on the whole crowd of pay TV players—cable and telephone companies, and satellite companies—to stop confining their programming to devices directly connected to their physical networks.
The success of web video services like Netflix are proof that pay TV subscribers want more flexibility in the ways they can watch their TV programming.