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."