Sep 21, 2011

Is FIOS Making A Netflix Play?

More than a year after announcing that an iOS app was "coming soon," Verizon FIOS finally rolled one out last week.

Four things about the product immediately struck me as rather curious:

  1. There was no PR around the launch. Or else I'm using Google incorrectly. But the sort of sites that are normally all over stories like this (Engadget, Fierce IPTV) only picked up the story yesterday or today, about a week after iTunes indicates the app was first available. And they seem to have figured it out via someone accidentally stumbling on it at the iTunes store - there are no references to any sort of press release or official statement.

  2. The app is incomplete: while there are two tabs, one for Movies and one for TV Shows, the TV part is not live yet: all you get is a pop-up message stating that "TV Episodes are coming soon for iPad." It's unclear whether this is a rights issue, a functionality issue or something else. But still curious.

  3. This is strictly a VOD play based off their FlexView platform: you can rent or buy movies (you have to go online to the FlexView site to actually complete the purchase) at which point you can download the movie and watch it on any of your devices: iPad, iPhone, computer or television. There is no free content and no tie-in to Verizon's FIOS TV service other than the ability to watch the movie on your TV via your FIOS set top box.

  4. You don't need to be a Verizon subscriber to rent movies. Although I am currently a FIOS subscriber, I was able to use this link to go to my computer, create a non-user account, enter my credit card information and then purchase a movie that I downloaded and watched* on my iPad

What's most interesting (beyond giving non-subscribers access to the VOD catalog) is that while most other players in the field view TV Everywhere as a Hulu-like play, Verizon seems to want to go head-to-head with Netflix.

There are a couple of reasons this may may a whole lot of sense:

  • Netflix just lost Starz and along with that goes many of their more popular movies

  • The whole Qwikster/DVD unbundling thing has made for a lot of unhappy Netflix users, particularly that huge segment who have no idea how to set up a Roku box or laptop to play movies on their TV.

  • Convenience: Bear in mind that this is how TiVo went from a verb to "are they still around?" - the cable companies provided built-in DVRs to people who did not want to deal with the hassle of buying and installing one themselves. And even though the cable company DVRs were vastly inferior to TiVo, they were easy and that trumped elegance. If FIOS lets its customers rent movies off their set top box and pick them up on their iPads or laptops, they may have a wining proposition for the tech-unsavvy crowd.

  • Movie studios, seeing reduced revenues from DVD sales, may be more willing to make deals with providers like Verizon. And according to Variety, Verizon is aggressively moving to expand its movie catalog.

    • Expanding inventory, especially of popular movies,  is critical, as VOD has been around for quite a while, but has been hampered by high prices, short rental periods and less-than-stellar movie options.

  • FIOS is said to be looking at creating an Xbox app to make its content available to non-subscribers. And Xbox users will know how to watch it on their TV screens. This is one area where FIOS and ATT's Uverse service have an advantage over their competitors as they are pure IPTV plays, and the availability of Netflix via the Xbox and Wii certainly helped their streaming service take off.

  • FIOS movies are downloaded to your iPad, not streamed. This may not seem like a huge distinction, but while TV may be everywhere, WiFi is not: you can't play streaming video on trains, planes and automobiles (not to mention most hotel rooms) and this may be a huge advantage to people who want something to watch for their commute or business trip.

On the other hand, it may well backfire, since, as my colleague Jon McKinney points out "users don’t want opportunities to pay-- that reduces transactions and consumption."

  • This is especially true since the model FIOS rolled out is pure pay only (e.g. strictly a la carte, while Netflix and Hulu Plus offer the all-you-can-eat buffet.)

  • At $5.99 for an HD rental of a recent release, price may make the FlexView product a non-starter. Users who want to download movies to their iDevice have no reason to switch over from iTunes, which allows in-app purchasing and better integration with the device.

  • It will be interesting to see what the reaction is to FIOS' decision to introduce a VOD-only app first and to learn why they have been keeping quiet about it

    • Is there a more robust update in the works, one with more Hulu-like functionality and free content, perhaps to coincide with the arrival of the iPhone 5 and iOS5?


*Actually, I didn't get to watch it. That's a bigger problem FIOS needs to fix right away. Thus far, I've rented 3 movies, 2 on my FIOS account and one on my non-subscriber account. Only one movie actually downloaded correctly and played. The other two open up, show time code and control buttons, but the screen is black. I spent some time on the phone last night with customer service and they had no idea which unit - wireless or residential - was handling the new iPad service. In fact, they seemed unaware it even existed. So caveat emptor

UPDATE: Still not sure what's going on. The app has 50+ one and two star reviews in the App Store and comments are uniformly negative. What's more, the one movie that did successfully download expired before I finished watching it. When I tried to re-rent, the app told me that "the right to this title are not available any longer. The title will be removed from My Purchases after the full 30-day rental period has elapsed, as which time you can acquire it again." Having to real idea what that meant, I went over to iTunes, spent another three bucks, and watched the end of the movie.

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