Verizon CFO: Get Ready for Multicast Video
Cable will soon face a new competing service from Verizon thanks to multicast technology, which steams content over the telco’s LTE Network. The technology is still about a year out, Verizon evp/CFO Fran Shammo said during the Oppenheimer 17th Annual Technology, Internet & Communications Conference last week. “We will start to embed the chips in the fourth quarter of this year, but you have to go through an upgrade cycle to start to get the millions of customers that you need to have that type of technology in that handset to be able to use that multicast technology.”
The multicast technology is “the pivotal point that starts to change the way video is delivered over a mobile handset which opens up content into the wireless world,” he said, noting the Samsung Galaxy 5 smartphone already has multicast chipset. Still, the video-over-wireless ecosystem needs to be developed. “As you know, one of the things that is missing in the ecosystem for wireless is the third-party independent person who says who watches what and rates the shows. So advertisers and network content providers can’t get their hands around how many eyeballs are actually watching that individual content,” Shammo said. “Now our understanding is that we will maybe have that from a third party by the end of this year and I think that will be the first step to it.” He’s presumably talking about Nielsen ’s plan to add cross-platform measurement sometime this fall. And exactly what’s the target market for multicast video? “If you think about a wireless customer who consumes video, they are normally in 30-miniute segments, and they are normally on live real-time events, and that is where we think multicast will really be important,” he said.
Citing mobile data usage jump during World Cup, Shammo said “people are willing to watch those live events at that point in time in places where they can’t be sitting at home to do that and that is where we think sporting events—things like the Emmys or concerts—things that are real live time will be the ecosystem for that.” But will this be an advertising model, a revenue sharing model, a PPV model? “That’s yet to be worked out,” Shammo said. However, multicast video is “absolutely a revenue generator and something for the content providers to be able to deliver content very easily through the wireless network.”