NEW YORK--Verizon Communications is prepping a new live TV streaming app for tablet PCs like the Apple iPad, a move that could eventually eliminate the need for a home set-top box and set the stage for true "TV everywhere" viewing.
The new app allows Fios TV subscribers to stream live TV from their service onto an iPad over a home Wi-Fi connection. Initially, the service will work only in the home. But Kheradpir said that eventually the service could be offered as part of Verizon's TV-anywhere strategy, allowing people to access live TV anywhere they are using a username and password to authenticate the service.
"We built Fios TV as a cloud computing product," Kheradpir said. "The set-top box function is all done in software, and we simply redirect the broadcast TV signal to another screen. And because the set-top function is in software we can implement the functionality in devices."
Kheradpir said that the iPad is a perfect device for the application because of its elegant design. The large touch screen is big enough for comfortable TV viewing. And the device also turns on and off quickly, unlike many laptops, which take several minutes to boot up and shut down.
Eventually the app will be available for other tablet PCs as well as other connected devices, such as laptops and mobile phones.
"We have to start the engineering somewhere." Kheradpir. "And the iPad is an ideal device for this."
Kheradpir told journalists at the demonstration that the app is technically ready to go, but the company must wait until it has signed deals with content providers before it will go live with the service. The company is currently negotiating with several major cable and broadcast TV providers, such as Time Warner, to hammer out programming agreements.
"The engineering work is done," he said. "Now we have to work with the ecosystem and the content community to come up with equations that work for everyone."
The agreements that Verizon and other paid TV services make to offer certain TV channels as part of its service are for TV viewing only. Traditionally, content providers have negotiated separate agreements to stream live broadcasts on other devices, such as mobile phones.
Shawn Strickland, vice president of Fios product management for Verizon, said the company doesn't intend to pay content providers more to make programming available on multiple devices in the home. But he admitted that every negotiation with every provider is different.
Kheradpir made the argument that content providers actually benefit from allowing their programming to be viewed in this way. He used his own family as an example. He said that he and his wife watch CNN television all the time. But his 18-year-old daughter doesn't usually watch the cable station live. Instead, she checks the CNN Web site online in her bedroom on her laptop. Once Kheradpir started testing the new iPad app at home, his daughter altered her behavior.
"Now she takes the iPad to her room and watches the live CNN TV stream," he said. "So now CNN has won her back as a TV viewer instead of someone who only goes to the Web site."
Verizon executives said the new application will likely be available next year. But Kheradpir didn't rule out offering the new service sometime in 2010.
Reducing the number of set-top boxes
While there's no doubt the application extends where TV can be viewed, it also demonstrates how to cut down on the number of set-top boxes used in the home. Executives admitted that the set-top box won't go away entirely anytime soon, but as more functionality is pushed into the Verizon service cloud and more devices are equipped with software to render video signals on any device, there will eventually be less need for such devices.
"This is more economical for us," said Strickland. "We don't have to spend the capital to put boxes everywhere."
This proposition may not sit well with the two largest companies that make set top-boxes: Motorola and Cisco's Scientific Atlanta. These companies already have a lock on the set-top box market. For years the FCC has been trying to break the market to allow for more innovation in the set-top market. In fact, the National Broadband Plan the FCC developed earlier this year, has a section describing the need for more competition in set-top boxes.
Kheradpir said eventually this will be unnecessary.
"The FCC is trying to solve a problem that doesn't exist anymore," he said. "They are 20 years behind. The world has moved on. We are way ahead of what they are thinking with what we have done with the software."
Verizon is nearing the end of its $23 billion project to wire two-thirds of its territory with fiber to the home connections. The company now has 3.8 million customers for Fios Internet and about 3.2 million for Fios TV, according to the company's second-quarter results. The infrastructure makes service available to roughly 18 million people, and Verizon is now in the process of expanding its customer base within the existing territories where it has built the network.
Since the company launched the Verizon Fios TV service, it has continually upgraded the features of the service, giving subscribers additional content and features at no extra cost. On Wednesday, the company announced a slew of new offerings that will be available to all Fios TV subscribers by the end of the year.
In an effort to compete with over-the-top Internet offerings and some offerings from competitors such as Comcast, Verizon will soon offer movie purchase and rental options and a three-screen or "Flexview" option that allows subscribers to view digital rights-protected video content to be shown on up to five other devices.
Standard-definition and high-definition movies can be bought or rented for between $2 to $18. Files that consumers own, they will own for life, even if they leave the Fios TV service. Most video rentals expire within 48-hours after the first playback.
Verizon is also allowing subscribers to store their own personal content, such as pictures, video, and music in the cloud with the option to listen or view the content anywhere there is an Internet connection using a Fios app.
At launch, the movie and personal content apps will be accessed on a number of platforms, including Mac and PC computers, as well as mobile-phone platforms Google Android, Research In Motion, and Windows Mobile. An app for the iPhone is coming, but Verizon executives said they are unsure when the app will be approved and available.
The video and personal media can be streamed over Wi-Fi, 3G, and 4G networks, regardless of provider. The only limitation is that the service is available on up to five devices at any given time. But executives said they have made it easy to authorize and de-authorize devices to accommodate usage on many devices. And if the company finds that more device authorizations are needed, it will eventually bump up the number.
These services will be offered to Verizon Fios TV customers later this year at no additional charge.
Correction 8/29/10 7:05 a.m. PDT:A previous version of this story misstated Shaygan Kheradpir's title. He is Chief Information Officer for Verizon Communications.