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Why Verizon Is Planning to Launch New OTT Video Service

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Verizon’s OTT video service

Verizon (VZ) has consolidated its strength by acquiring Yahoo for $4.5 billion. Going forward, the company is moving to become a key global media player backed by a well-executed strategy. It’s planning to foray into the ad tech industry and expand its direct-to-consumer video segment.

During the recent Guggenheim Media Day conference on June 8, 2017, Marni Walden, Verizon’s executive vice president and president of Media & Telematics, said that once Yahoo’s assets are integrated into its core product portfolio, the company will launch a new OTT (over-the-top) video service. It will be a challenging task for Verizon to remain competitive with a compelling content bundle. Walden also said, “I don’t want to do just a me-too kind of thing out there, I think, that’s not where we’re going to win.” Additionally, even if the timing of such a launch hasn’t been announced yet, Verizon said it’s not too far off in the distant future.

Walden also said that the company has noted the lessons learned from Go90; namely, that it’s important for companies to look for quality content over quantity. So it’s important to focus on some key variety of content such as original programming and sports.

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OTT offerings

The OTT online video streaming service has huge growth potential. The rise of OTT content has driven subscribers away from traditional linear TV, primarily due to high monthly bills that users are paying to cable and satellite TV providers. According to a Digitalsmiths report and as depicted in the above graph, approximately 35.0% of users pay more than $100 per month to their pay-TV providers.

Currently, the major players in the video streaming market are Dish TV’s (DISH) Sling TV, AT&T’s (T) DirecTV Now, Netflix (NFLX), and Alphabet’s (GOOG) YouTube.

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