So Verizon is planning to push its new virtual MVPD platform to the mobile
audience, and has come up with an interesting way to help mobile customers
"pay" for the massive quantity of bits that such a service could consume...
Let a sponsor pay for the bits.
This may be a tricky proposition, as it seems to step around the paid
prioritization rules that the FCC has established to enforce net neutrality.
Verizon believes that having an advertiser pay for the bits will be legal. And
advertisers may be happy to get on board, as they are able to target individual
subscribers.
The article raises some other issues as well. The service can run over any ISP,
but at least one feature will work only with Verizon's wireless network:
"multicast for live delivery."
Bert questioned why the Telco's would use the 600-700 MHz spectrum for LTE
broadcast. Perhaps this is the answer. They may use LTE Broadcast to deliver
the live streams from the Virtual MVPD service, and allow multiple devices from
a single subscriber to access these streams at the same time, as devices join
IP Multicasts.
So in essence, the former broadcast spectrum may be repurposed, not for
traditional linear broadcasting, but as a competitor to wired MVPD services.
They would be able to support both live streams via IP Multicast, and demand
based programming via their 2-way network. And the LTE broadcast network would
not require the site density of the 2-way network which would operated at
higher frequencies.
If the LTE broadcast bandwidth is not sufficient to support "hundreds of
channels," they could do as Bert suggests, and only deliver the most important
live events, rather than streaming "channels" like the traditional MVPD
bundles...
Regards
Craig
http://adage.com/article/digital/verizon-s-internet-tv-service-offer-sponsored-data-deals/299173/
Verizon's Internet TV Service May Let Brands Sponsor Your Binge-Watching
Verizon appears poised to let brands sponsor your TV watching.
Sometime this summer Verizon will launch in the U.S. an ad-supported TV service
delivered via the internet. The service will feature live and on-demand
programming as well as programming from digital video networks like
AwesomenessTV, Verizon Exec VP-President of Product Innovation and New Business
Marnie Walden said during a conference call Tuesday morning to announce the
close of its AOL acquisition.
She referred to the service -- whose underlying technology Verizon acquired
from Intel -- as a "mobile-first video product."
Internet-delivered TV sounds like a great idea. Streaming video over the
internet instead of through a cable box means that people can watch TV on any
device they want wherever they are. But all of that content comes with the cost
of piping that data -- and video packs more data than any other type of content
-- to people's devices.
Verizon could assume the cost of that data, which would weigh down its profits.
It could pass on the data costs to its customers by charging them for the
amount of data that they use similar to the way it sells wireless data plans,
which would aggravate its customers. Or it could ask the programmers like
AwesomenessTV to pay for the data people use to watch their content, which
would run afoul of the FCC's net neutrality rules.
Verizon has come up with another option. The company will let advertisers pick
up the bill. "Ad-sponsored data is part of the product offering," said Ms.
Walden of Verizon's upcoming internet TV service. She added that there would
also be "premium offerings" but did not specify whether that means people would
be able to pay for an ad-free version of the service.
Ms. Walden didn't detail how Verizon's sponsored data program would work, but
its biggest rival AT&T already operates a sponsored data program that could
offer a peek into Verizon's plans. In January 2014 AT&T announced that brands
would be able to pay AT&T to cover the costs of streaming data for particular
sites or apps to AT&T's wireless customers. The customers get to check out
those sites or apps without adding to their wireless bills, marketers get to
put their brand in front of those people and AT&T gets to protect its profits.
Asked whether letting brands sponsor the service's data would violate the FCC's
net neutrality rules -- which prohibit a company like Verizon from letting
someone pay to prioritize the delivery of specific content over other content
-- Ms. Walden said, "we believe we are well within the ability to do that." The
FCC's net neutrality rules appear to permit the kind of sponsored data program
that AT&T runs and Verizon is preparing to run.
While Verizon operates its own internet and wireless services that people could
use to stream its upcoming internet TV service, the service will also work over
its competitors' internet and wireless services. However some features will
only work when streamed through Verizon's pipes, such as "multicast for live
delivery," Ms. Walden said. That appears to mean the ability for one customer
to stream live programming from the internet TV service across multiple devices
at the same time.
Sponsoring people's TV watching won't be the only way for brands to advertise
on Verizon's internet TV service. The service will also carry ads sourced from
AOL, which sells ads directly and also operates a suite of ad-tech tools to
automate ad sales through real-time auctions.
