Verizon Inks Content Pacts In Advance of IPTV Launch

The telecommunications company beefs up another flank as it prepares for dead-on competition with cable and satellite TV operators.

April 30, 2005

2 Min Read
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Verizon Communications Inc. on Friday unveiled additional programming for the launch of its TV network later this year, a small step toward the telecommunications company's head-to-head competition with cable and satellite TV operators.

Under the latest agreements, the New York-based company's Fios TV would carry programming from the Varsity TV, the Gospel Music Channel, MavTV, GolTV and the Soundtrack Channel. The announcement follows on the heels of a far bigger agreement unveiled earlier this week in which Verizon said it would carry 11 channels from Showtime Networks Inc., including the Movie Channel, Showtime and Flix brands, plus high-definition and video-on-demand programming.

Terms of the agreements were not disclosed.

Verizon is expected to be the first of the big four telecommunications companies to make a major launch of Internet-based television, called IPTV. Verizon is building ultra-fast fiber connections to homes in half of the 29 states where it offers telephone service, and plans to reach 3 million homes when it launches its TV service.

Atlanta-based SBC Communications Inc. plans to begin offering higher-speed connections to the home for delivering digital TV in the first quarter of next year, with plans to reach 18 million households by the end of 2007.Qwest Communications International Inc. of Denver also plans to enter the IPTV market, while BellSouth Corp. has yet to announce its plans.

Telephone companies have been forced to charge into the television market by cable operators, which are offering Internet telephony over their high-speed networks, as well as broadband and television, a so-called "triple play." Telephone companies hope to offer the same bundle, as well as cellular phone services.

Verizon's content announcements are important, because it, and the other telephone companies, will need to offer a competitive number of channels in order to lure consumers from cable TV.

"Consumers are drawn by the number of channels being offered, even though they may find later that they only watching 10 of them," Kurt Scherf, analyst for market researcher Park Associates, said. "It's a huge concern for Verizon and the rest of the telcos."

Besides Showtime, Verizon's other big content announcements include deals with NBC Universal Cable and A&E Television Networks.In its latest content deal, Varsity TV will provide 24-hour programming, dedicated to teenagers, that includes sports series, reality shows, dramas, comedies, music shows, animation and films.

The Gospel Music Channel features music videos, artist profiles and live concerts; MavTV provides programming geared toward men; and GolTV offers more than 1,500 live soccer matches annually from around the world.

The Soundtrack Channel features music videos from movie and television soundtracks, including original movie videos produced for the channel.

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