Verizon Goes Digital And Everything Changes
For a while now, we’ve been talking about a world where all TV is digital and the changes that would bring. But a story about Verizon that broke this weekend about how they’ll soon be moving all their subscribers to a digital delivery system means that the future is happening a lot sooner than anticipated.No one expected a major MVPD to make a move like this so soon, but Verizon is allegedly making use of the OnCue technology (software and set top box) it bought from Intel almost two years ago to make the switch.Before we explain the changes, let’s click back a screen to explain why this matters. Today, most pay TV is delivered via a systems that uses QAM (quadrature amplitude modulation) technology. QAM-based systems make use of a set top box that converts the signal delivered by cable wires so it can be viewed on the TV. The industry likes QAM because it delivers excellent picture quality (especially on HD.)Digital has always been considered too risky to use for pay TV delivery because home internet speeds were not fast enough or reliable enough. But that’s clearly changing if Verizon is going to be doubling down on all-digital delivery.That means plenty of changes afoot, for advertisers, networks and viewers alike. Here are the ones you need to know about:Addressability Becomes More Real: Digital delivery means that FIOS will be able to deliver ads to specific IP addresses. That means cross-platform measurement and an enhanced ability to understand audiences, particularly across devices.This is also useful for programmers who want to know which devices their shows are being viewed on, where and when. It’s useful for advertisers, who can track users across devices, one of those devices now being the set top box.Personalized Accounts: One of OnCue’s most buzzed-about features was its ability to create personalized accounts. Initially this was going to be accomplished via a facial recognition tool that relied on a camera built into the set top box, but when this proved to be too creepy for most, the plan was scrapped. There are other biometric devices that can be used to identify viewers— voice patterns and thumbprints, for instance, and the ability to identify individual viewers opens up a whole new world of options.Advertisers who used to target ads to households can now target individuals within these households. That allows for much tighter targeting and finally puts television in the same league as mobile. Given the fact that everything will be tied to an IP address, it will even allow advertisers to target individual viewers across mobile and TV.Networks and MVPDs will be able to get a much better sense of who their viewers are. Here again, rather than rely on household data, they’ll know exactly who in the household is watching so that they can serve up recommendations based on that individual’s viewing habits and tastes. (Imagine being able to factor social media “likes” into the equation.) Those recommendations will travel with the viewer across all their devices, creating a personalized TV account that allows for the same degree of customization as a mobile phone.Streaming FIOS: Verizon can also take advantage of the box to offer their own version of Comcast’s Stream or Dish’s Sling. If all the viewer needs is an internet connection and Verizon’s digital set top box, they can be anywhere— not just in Verizon’s home territory. This allows Verizon to push either a skinny bundle, their new Go90 service or both to a whole new set of potential viewers.Right now, Verizon’s service is still just a report in Variety. When it launches, we’ll be able to provide a much clearer sense of what it can and can’t do. Regardless, the move from QAM to digital is a big one and most definitely marks a milestone for the industry.
