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Verizon let slip on its third-quarter earnings call this week that it had quietly killed its joint venture with Comcast in August having concluded it was no longer necessary.
The venture was formed back in December 2011 as part of the deal transferring wireless spectrum owned by Comcast, Time Warner Cable and Bright House Networks to Verizon Wireless to “develop new products and services that will integrate both wired and wireless technologies for consumers.” But in a statement issued following the earnings call this week, Verizon said, “Evolving technology and market changes since the joint venture was formed have led all parties to conclude that a joint venture, per se, is no longer needed to deliver innovative services to customers. Verizon Wireless and the cable companies will continue to explore ways to collaborate on technology in the future.”
The joint venture, such as it was, was always at least one part fig leaf, formed to try to make the spectrum swap and non-compete agreement between Verizon and the cable companies look at least somewhat pro-consumer to antitrust regulators. But as Janko reported over at GigaOM this week, the venture did at least pencil-out plans for a product called Nuon that enable consumers to move content off a set-top box — including self-recorded content — to mobile devices. It even apparently had specs for the box drawn up by Huawei.
So what “evolving technology and market changes” made Nuon and whatever else the JV was working on unnecessary? Aereo and Dish Network’s Hopper With Sling come to mind.
As I discussed in a previous post, it’s increasingly possible for consumers to cobble together the means to do much of what the Verizon-Comcast joint venture was said to be working on for themselves, using off-the-shelf hardware and software. As BTIG Research analyst Rich Greenfield detailed in his own blog post on the subject this week, consumers can buy what they need to time-shift and place-shift TV content, and to move it across devices and from fixed to mobile platforms at any Best Buy store. It may be kludgey and expensive for now but the direction of the trend is clear: increasingly, consumers won’t need a service provider to do what Nuon was apparently designed to do.
It’s equally clear that content providers — club to which Comcast is now a prominent member but was not in 2011 — are not at all happy about what consumers can do with their content. And they certainly don’t appreciate service providers and device makers furnishing consumers with the means to do it, as the ongoing, multi-front legal war against Aereo, FilmOn X, Dish’s Hopper DVRs and other forms of do-it-yourself TV Everywhere makes clear.
It’s equally clear that, insofar as the TV networks and content providers are willing to work with service providers to enable consumers to access their content from multiple devices and on multiple platforms, they will be very wary of allowing any one service provider to deliver it. As Time Warner Cable recently learned from its losing retransmission fight with CBS, the networks are determined to be parsimonious in the parceling out of rights. To the extent possible, they mean to license each platform and each use-case separately, not to offer bundles of rights to a single service provider.
So, the Verizon statement was correct. The joint venture with Comcast per se “was no longer needed.” It also wasn’t likely to get anywhere.