Verizon FiOS-Xbox Live Partnership Could Lead to More Features
SAN JOSE, Calif. -- Verizon’s deal with Microsoft to stream some live TV programming from its FiOS service to the Xbox Live service is the first step toward what the partnership could ultimately yield, Eric Bruno, Verizon Telecom vice president of product management, told us. Features such as PVR functionality and eventually allowing the device to function as a full-fledged set-top box could come in the future, he said. “That’s certainly part of the plan,” Bruno said. “You've got to get critical mass from a channel capacity standpoint and you've got to get to a point where you've got different content providers signed up,” he said. But the device itself has “plenty of capacity” to handle the functions associated with a traditional set-top box, he said. “If you look long term, eventually the set-top box fades away."
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Likewise, the pay-TV industry may eventually no longer need the CableCARD, Bruno said. “When it comes to IP-connected devices, I think the industry is just going to innovate past it,” he said. “We'll find ways to make sure we deliver that full experience that a CableCARD enables, without the need to use the CableCARD,” he said. Until then, FiOS will continue to meet its CableCARD obligations, he said.
Adding a CableCARD to the Xbox would require “cracking the box, and that’s a big decision,” said Tom Gibbons, corporate vice president in Microsoft’s interactive entertainment business unit. By focusing on IP video, Xbox can help move entertainment services toward the development pace of Web and software services, he said. “We feel like we're on the right path now to drive a wave of iteration and innovation in the space, and Verizon has really jumped in with both feet."
Verizon will deliver the streams via its content delivery network, over an IP connection in the customer’s IP home router, Bruno said. The companies haven’t settled on a final bitrate for the streams but it will be above 2.5 Mbps, he said. When the service is introduced, it will have more than 20 TV networks available for live streaming, Bruno said. Verizon didn’t say which networks would be included, but Bruno’s presentation about the partnership at the TVNext conference Wednesday morning featured content from HBO and other Time Warner-owned networks.
FiOS was one of several new Xbox media partners Microsoft introduced Wednesday. Comcast will also have an app that lets its subscribers access its VOD service. In the U.S., HBO, Bravo, EPIX, Syfy and TMZ, will also have apps on the Xbox Live service, Microsoft said. “The way either regulations or the markets have evolved means there is no one-size-fits-all model,” Gibbons said. The bottom line for Xbox is that if Xbox Live users want to get a service, Microsoft has a solution for them, he said. “All the partners bring different things,” he said. “You'll see people playing to their strengths in offering the right combination” of services.
FiOS is focused on delivering services within the home, Bruno said. “Our game plan is not to move that beyond the household at this particular point in time,” he said at the TVNext Conference Wednesday. “You won’t see us giving away Slingboxes,” he said. “We want to have really deep and close relationships with our content providers,” he said. Along those lines, it was very important to make sure the live channels will be measureable by Nielsen, Bruno said. “That was one of the key things we needed to make sure we could deliver,” he said.
The Verizon-Microsoft deal will probably spur other pay-TV providers to work more closely and faster with partners such as Microsoft, said BTIG Research analyst Richard Greenfield on his blog. “It is disappointing to see Verizon, the newest entrant in the MVPD industry, be the first industry participant to fully embrace becoming a ‘dumb pipe,’ recognizing the value of their broadband infrastructure versus controlling the user-interface,” he said. “We suspect there is still a question in the cable industry of how much control/branding they can give up when it comes to live linear television,” he said.