Next TV

Courting the Cloud

Verizon’s Digital Media Services Braces for TV’s OTT Shift 8/10/2015 8:00 AM Eastern

When it comes to over-the-top video, everyone’s head is in the proverbial cloud, where all the heavy-duty processing and packaging is happening before live and on-demand fare is streamed to screens both big and small.

 

It has become a big, expanding market, attracting the attention of traditional content-delivery network providers such as Akamai and Amazon Web Services. Also involved are Comcast, which has built its own private CDN, and players such as Major League Baseball’s MLB Advanced Media, which has become a force to be reckoned after eyebrow-raising deals with big name clients such as the WWE, HBO and, most recently, the National Hockey League.

 

MAKING IT SIMPLE

 

Another key player that is eyeing its share of that OTT multiscreen pie is Verizon Digital Media Services (VDMS), a cloud video unit of Verizon Communications that has been steadily building out a platform in part through a string of acquisitions and partnerships (see sidebar).

 

“As TV moves to digital, we want to be that player that’s really simplifying it for our clients,” Bob Toohey, president of VDMS, said. “Our No. 1 priority is to continue to get more logos, more eyeballs, onto our platform.”

 

VDMS has been building a roster of sizable online video partners and clients in recent years. Though it lost one in the fall of 2014 when the Redbox Instant by Verizon joint venture called it quits, the cloud-video division continues to work closely with other internal Verizon properties, as well as outside clients that include Disney/ABC/ESPN and LiveXLive, Loton Corp.’s new premium, live music-streaming network.

 

On the internal end, VDMS will be helping to underpin AOL’s growing OTT video offerings, and it is expected to play a significant role with Verizon’s coming “mobile-first” OTT service. That offering, reportedly to be called Go90 when it debuts this summer, is expected to start off as a free, ad-supported service. Verizon has already signed on several content partners for it, including Discovery Communications, Vice Media, Scripps Networks Interactive, ACC Digital Network, Campus Insiders, CBS Sports, ESPN, 120 Sports and Awesomeness TV, among others.

 

If dynamic, personalized advertising does indeed play a big role with Go90, Verizon’s recent acquisition of AOL and the advertising technology it brings to the table should also play a significant part in VDMS’s future progress.

 

“When I talk to our clients, one of the big priorities is how do they monetize and create value for their content online,” Toohey said. “We all know the ad dollar spend from TV to digital is moving and it’s just at the early stages. That’s where there’s a very large opportunity.”

 

AOL brings “tremendous content” and an important advertising technology platform to Verizon and to VDMS, Toohey added, noting that VDMS is already in the throes of integrating those systems. “The ad-tech was the next piece of the puzzle.”

 

Toohey agrees that the TV and overall video viewing model is shifting rapidly, and distributors and the rights that govern the content are all starting to catch up.

 

“But the volume and scale across the whole platform is what people are going to need,” he said. “The expectation is when people go digital and go over the top, they expect a TV experience. And that’s what we’re building towards.”

 

4K ENTERS THE PICTURE

 

4K/Ultra HD hasn’t hit the mainstream (Future-source Consulting sees 4K sets making up 45% of all TV shipments by 2019), but VDMS is starting to gear up for the bandwidth-eating, pixel-packed format.

 

“We are definitely in the prepare stages for 4K,” Toohey said, expecting momentum to build relatively rapidly over the next six months. “People want to watch [4K] at home on the giant screen. But when you take that down to the mobile devices, such as tablets, we will also be able to handle 4K with what we’re building.”

 

Building a Better Cloud

Verizon Digital Media Services and its parent company have taken the M&A and partnership route to help underpin their multiscreen digital platform. Here’s a sampling of those platform-building moves:

 

November 2013: Acquired upLynk, a startup that developed a framework aimed at simplifying and streamlining the process of uploading, encoding and inserting ads into online video.

December 2013: Inked a deal to acquire EdgeCast Networks, a content delivery network.

January 2014: Verizon snaps up the assets of Intel Media’s OnCue over-the-top TV platform.

July 2014: In an unexpected partnership, VDMS hooks up with Comcast-owned thePlatform under a strategic alliance that paved the way for VDMS’s suite of video services to be integrated with thePlatform’s flagship “mxp” video-management system.

June 2015: Verizon clinches its acquisition of AOL, giving it access to a key programmatic TV/online advertising platform that came by way of AOL’s 2013 purchase of Adap.tv.

SOURCE: Next TV research

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