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Mobile Video Business: Gains Strong Momentum In The U.S.

Published 04/12/2017, 12:31 AM
Updated 07/09/2023, 06:31 AM

Internet TV is gradually gaining a strong foothold in the U.S. The legacy pay-TV industry in the country has been facing severe challenges from online video streaming service providers. The low-cost over-the-top video streaming service has resulted in massive cord cutting that is currently threatening the pay-TV business model.

Internet TV has emerged as a strong alternative to counter this competitive threat. At present, the web-based digital media market is growing by leaps and bounds. Digital media brands are gaining immense popularity especially among the younger generation. With the demand for smartphones and tablets rising, target customers are increasingly watching videos online, and preferring them over costlier legacy pay- TV connections.

More customers are using the Internet to watch videos, preferring mobility of their content. This provides wireless operators an opportunity to differentiate their products by offering access to select content through their networks. By making deals directly with content developers, wireless carriers are trying to draw customers with "bundles" of content such as streaming entertainment or sporting events, possibly with no additional data charges.

U.S. telecom giant Verizon Communications Inc. (NYSE:VZ) is likely to start an online TV streaming service this summer, according to a recent Bloomberg report. For the new service, the company has decided to come up with dozens of channels nationwide.

Management is currently negotiating with several TV network owners to secure online streaming rights. The service will compete with established low-cost streaming video services like Netflix Inc. (NASDAQ:NFLX) and Amazon.com Inc (NASDAQ:AMZN).’s Prime video.

Last year, Verizon’s closest rival AT&T Inc. (NYSE:T) launched its online TV streaming service - DirecTV Now. Satellite TV operator DISH Network Corp. (NASDAQ:DISH) offers a similar kind of product called - Sling TV. Moreover, Comcast Corp. (NASDAQ:CMCSA) – the largest cable multi service operator in the U.S. and a media giant - is considering a strategic decision to rebrand its existing TV streaming service “Stream”, to make it available across its footprint. The new service called - Xfinity Instant TV - is expected to start in the third quarter of 2017.

Moreover, CBS Corp (NYSE:CBS). has already introduced the online-only CBS All Access service of its broadcast network that includes a live feed. Time Warner Inc (NYSE:TWX). introduced a similar online-only service called HBO Now for its HBO network. Notably, AT&T has decided to acquire Time Warner. The deal is currently under regulatory scrutiny. AT&T currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Netflix, Inc. (NFLX): Free Stock Analysis Report

AT&T Inc. (T): Free Stock Analysis Report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

DISH Network Corporation (DISH): Free Stock Analysis Report

Comcast Corporation (CMCSA): Free Stock Analysis Report

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