How Verizon plans to weaken the cable industry’s grip

January 21

(Justin Sullivan/Getty Images)

A burgeoning deal between two tech titans could help drive a wedge between you and your cable provider.

Earlier today, Intel announced a plan to sell its media division to Verizon for an unspecified sum. On paper, it's just another business transaction. And Intel is better known as a chipmaker than as a media company. But the technology Intel is transferring as part of that deal has the potential to turn Verizon into a major player in the TV programming space. And that means potentially threatening the business of cable companies.

For the past year, Intel has been working on a solution for streaming TV called OnCue that it hoped would become a service it could launch itself. While that won't be happening now, Verizon gets to benefit from that research — so long as it can attract the right content to its new platform. Cable companies have traditionally held a great deal of power in content negotiations, but that may change as more businesses look toward a future of on-demand streaming. In August, Japanese manufacturer Sony struck a content deal with Viacom that would bring MTV, Nickelodeon to the Playstation and other devices.

Meanwhile, streaming services are increasingly signing partnerships with other hardware makers to provide content on next-gen viewing devices. At the recent Consumer Electronics Show in Las Vegas, Netflix, Amazon and other companies revealed that their programming would be available for streaming on advanced, 4K television sets now being developed by manufacturers like Samsung.

Streaming video accounts for a huge share of Americans' Internet consumption. Netflix alone contributes to nearly a third of all Internet traffic moving across U.S. networks at peak times. Add in YouTube, and that figure rises to roughly 50 percent. Meanwhile, the number of those with cable subscriptions has been on the decline, according to industry statistics.


(SNL Kagan/NCTA)

Now, with Verizon planning to integrate OnCue into its services for FiOS and LTE subscribers, the company is accelerating the race toward an all-streaming, all-the-time future that promises to steal customers away from traditional cable — and convert them into cord cutters once and for all.

Brian Fung covers technology for The Washington Post.
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