Verizon Wireless, a joint venture of Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc (NASDAQ: VOD) could be ready to offer cable TV subscribers access to programming on their mobile phones before the end of this year if the company’s proposed $3.6 billion spectrum purchase is approved. Verizon Wireless has agreed to buy spectrum licenses from SpectrumCo, a joint venture of Comcast Corp. (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC), Bright House Networks, and Cox Communications.
Under the plan, a pay-TV subscriber could stream purchased programming directly to a mobile device. Verizon’s CEO, Lowell McAdam, even used the frightening phrase (to cable operators at least), “a la carte” programming. Cable networks have long insisted that they cannot allow subscribers to choose only those networks they wish to view, but must choose from packages offered by the operators. The Wall Street Journal cites McAdam as saying that a number of content providers “have come to us and have said, ‘We are willing to do an à la carte approach here.’”
It’s important to note here that content providers are not cable service operators. The content providers — TV and movie studios — would be delighted to have another revenue stream. Cable operators believe a la carte programming would cannibalize their business and lead to their demise.
For mobile carriers like Verizon Wireless, the more data streamed to mobile devices, the larger their revenue streams. Just a couple of hours of video streamed to a high-definition mobile device like the new iPad from Apple Inc. (NASDAQ: AAPL) can eat up an entire $30/month 2-Gbyte data plan.
McAdam also said that mobile carriers are looking at making content providers pay for the streamed data, although that’s probably a non-starter. He thinks it is more likely that data plans will become cheaper and mobile users will be willing to pay the price.