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Verizon chief: death of TV is real, iPhone hoped for on 4G

updated 10:05 am EDT, Thu September 23, 2010

Verizon CEO says TV cord-cutting happening

Verizon CEO Ivan Seidenberg broke from conventional TV provider thinking today by telling those at the Goldman Sachs Communacopia conference that he expected the Internet to kill cable bundles. He expected that bundles would still have "some life left" but that many younger buyers were simply dropping traditional TV entirely in favor of Internet access. He likened it to wired phone service, which might not be dead but is in the minority and has been largely replaced with cellphones.

"Young people are pretty smart. They're not going to pay for something they don't need to," Seidenberg told AllThingsD and others at the New York City event. "Over the top [(peak use of TV)] is going to be a pretty big issue for cable."

Most establishment TV providers, such as Time Warner Cable, have tried to insist that the trend towards "cord-cutting," or quitting TV, is isolated enough to be non-existent. However, TV subscriptions saw their first-ever decline in recent months, leading some to believe the model has peaked and that telecom companies are trying to hide the anti-TV trend from investors. Apart from a generational gap where many simply don't want to pay large amounts for mostly unused channels, some have also noted the exit from legacy TV was likely accelerated by economic slumps that helped justify switching to online video.

Seidenberg has an interest in TV as IPTV is an option through FiOS. Verizon is much newer to the category, however, and depends more on its cellphone and Internet access where Comcast, Time Warner and others are tied to TV viewing.

The view plays into the hands of both video streaming services like Hulu and Netflix as well as device makers like Apple and Roku that are counting on viewers renting or buying individual TV episodes.

Seidenberg in a question and answer session was also asked about a CDMA iPhone. Despite mounting evidence of the devices in production, the executive would only reiterate previous statements that he hoped to have an iPhone on Verizon in the future but didn't pledge himself to a launch. He thought Verizon's launch of an LTE-based 4G network late this year might serve as a catalyst to get a compatible 4G-capable iPhone on his service.

"We don't feel like we have an iPhone deficit," Seidenberg said. "We would love to carry it, but we have to earn it. I can't speak for Apple."



By Electronista Staff
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Comments

  1. chefpastry

    Mac Enthusiast

    Joined: Nov 2005

    +8

    My reason

    My reason for considering dropping cable is cost. Nothing else. Basic cable with two cable boxes (one with DVR) is costing me about $100 a month.

  1. facebook_Mark

    Via Facebook

    Joined: Sep 2010

    +7

    Stuck in the 1960s

    The cable/satellite providers STILL to this day refuse to allow customers to pay for only the channels they watch, because then they can't get the channels that no one watches because they lose commercial revenue. Okay, let's break this down:

    In 1968, NBC canceled Star Trek due to diminished ratings, only to be deluged by letters from fans demanding the series be brought back. In the spring of 1969, due to again-falling ratings, NBC pulled the plug for good. In the fall of the same year, NBC began monitoring not just how many sets were tuned into a show, but WHO WAS WATCHING THOSE TELEVISIONS, and found that the most attractive advertising demographic (young, married couples with lots of disposable income) were the major portion of those "failed" ratings, and realized too late that they'd just let one of the biggest hits in TV history go. Advertisers, it turns out, would have paid MORE to run commercials even in the worst time slot on television, because the best people to see their commercials were watching then.

    Flash forward to 2010, and the same demo is fleeing television entirely, because the cable companies can't seem to comprehend this same principle. Rather than allowing a roughly 30 year-old white male like myself to subscribe just to the four main networks, ESPN 1-24, Spike, Comedy Central, FX, and the two or three other channels that, all together, I'd spend 97% of my TV time watching -- and then get advertisers paying MORE to get on these channels -- they make me buy Lifetime (the only channel I can watch to see commercials informing me of the new Judd Apatow movie), BET (where they can push the new Taylor Swift CD), and LOGO (to find out where the next Glenn Beck rally is going to be held).

  1. cmoney

    Mac Enthusiast

    Joined: Sep 2000

    +5

    Re: My reason

    About the same costs here. Can't wait to get rid of these monopolistic entities once and for all.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -3

    Re: stuck in the 60's

    Rather than allowing a roughly 30 year-old white male like myself to subscribe just to the four main networks, ESPN 1-24, Spike, Comedy Central, FX, and the two or three other channels that, all together, I'd spend 97% of my TV time watching -- and then get advertisers paying MORE to get on these channels

    Except you seem to miss an important point. The cable companies do NOT get advertising (well, very little of it). Most of the advertising goes through the network.

    Advertising is also paid based on ratings, not the number of TVs that could possibly get the show, but the number of TVs actually tuned into the show. The ratings for a commercial on Lifetime costs the same whether it is on your cable package or not, because you aren't watching it (although you apparently do, since you know what commercials are on the station).

    You also think the cable companies get to choose what channels they get to offer in the first place. This is not the case. The cable networks tell the cable companies what they can air. And they charge the networks to air those channels. For example, ESPN has the leverage to demand, say, $4 per customer from your cable company. However, that is under the demand that it appears on the main cable tier (such that all customers get it). If the cable people want to put it on a higher tier, ESPN will balk or demand, say, $8 per customer.

    Going along with that, some networks know they are more of an essential than a nice-to-have (think the big 4 and ESPN). This gives the network the ability to also get some other demands, such as "You can have ESPN for $4, but you need to also air ABCFamily, at a $1 per customer", which helps push other channels onto cable line-ups (this is very effective when a network/studio is starting another channel and trying to get it on various cable line-ups).

    So, in your little scenario, you're thinking "Hey, just give me the stations I want for the current price you pay the networks to show them." The problem is the networks will want more to air those channels on a piecemeal basis, so you may end up still paying the same amount. And then whine about that, so you'll want to download it all, commercial free, for very little cost. Which only works now because they know the majority still watch TV, not downloadable movies. The more video moves to the internet, the more it will either cost or include commercials (or both).

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Verizon and TV

    Hey, Mr. Verizon, if TV is dead, why are you wasting your money providing TV services over FiOS?

  1. global.philosopher

    Fresh-Faced Recruit

    Joined: Sep 2010

    +1

    Have to earn it

    Earning it is easy. Simply agree not to bloat it with crappy software like they do with the Android handsets. Simple really!

  1. ionlyuseosx

    Fresh-Faced Recruit

    Joined: Jan 2002

    +2

    Verizon should have made the deal 3 yrs ago!

    Did Seidenberg wake up today with this idea about the Internet taking over our TV screens? Please. His comments are to throw cable competitors off track and to not piss off Google with the iPhone on Verizon launch in January (Pre-orders in December).

  1. bojangles

    Senior User

    Joined: May 2000

    0

    I hear that.

    A friend of mine just signed up for television service because he wants to watch football games. Other than that one person, not a single one of the 50-60 twentysomethings I've asked actually pay for television service. Heck, the only reason I do is because Apple TV isn't compatible with SD television sets and I don't feel like spending a grand or more on three new TVs.

  1. facebook_Justin

    Via Facebook

    Joined: Sep 2010

    0

    comment title

    That would be Ok, after Verizon ditches the CDMA c*** and goes LTE it would be nice to see them with an iPhone. But not a moment before.

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