As Verizon Communications adds more programming to its FiOS TV line-up, it seems like a good time to check in with Terry Denson, vice president for content strategy and acquisition at Verizon Communications. FierceIPTV sat down with Denson, who has been with Verizon for five years after stints at cable TV firm Insight Communications, MTV Networks and ABC, to talk about a variety of topics. Here are the excerpts:
On the evolution of DVR services to remote storage/network DVR: With DVR services, I'm not really sure where it all leads because it depends on what different parties start out trying to accomplish. Time Warner Cable approached Start Over from an innovation stance of wanting to offer a network DVR service. Cablevision Systems may have wanted to offer Remote Storage-DVR from an operational efficiency stance-they wanted to keep customers. The functions that are starting to happen now with DVRs are just a natural progression. I'm not sure what to glean from them.
Cablevision got in legal trouble because they didn't talk to anyone about what they were doing. Of course, we could do a network DVR. It's really just a business decision. But it doesn't make that much sense to think about that decision if the rights issues and legal pathways are not clear. DVR functions are now table stakes. It's all about the volitional spend, what customers are willing to spend. No one has had much of an opportunity to charge yet.
On the persistence of high-definition programming as competitive table stakes: The HD channel war will continue. For the next three years, it will still be a hotly contested area. As long as it necessitates a service change, it's something that puts the customer in play as a shopper.
On the potential for targeted advertising through TV: Targeted advertising is certainly a terrific opportunity. People don't hate ads. They just don't care for ads they don't like. It creates a great opportunity for dynamic content strategies and more diverse content. The real power is being able to aggregate small audiences and sell ads where you might not have been able to before. It's still hard for a niche content operator to break through because they do not have the mass appeal that gets advertisers to support them. But, you can put them in the same package with similar niches and create a better opportunity for everyone.
On Internet TV and video: With Internet TV content, something like YouTube is still like a garnish on the plate of the broader TV market. It's not where the market is right now. We're dabbling in it. The whole widget world from a video perspective is fascinating. It's about the utility of the widget and their habitual nature that it encourages. Still, they will not be acquisition tools, but retention tools, and potentially another advertising application.
On the changing attitudes and strategies of major content firms: The content companies are all over the place right now. A lot has changed in the last five to seven years. They used to fear cannibalization, and you couldn't get them to do anything. Now, a company like Disney will come out and say it wants to be on every single platform.
On the complex, rapidly changing competitive landscape: With content downloads, the participants are changing as companies are trying out new things. How much of what Netflix is doing is for the sake of survival beyond its original market proposition? Content is a difficult market. Wal-Mart abandoned it. Is Netflix a competitor to Verizon? The competitive set for us is complex. Everybody on a certain level is a competitor, but they could be an ally, too.