I think it's very interesting that Verizon Wireless (NYSE:VZ) decided to make what it called one of its most important announcements of the year--the debut of the new aggregated video portal called viewdini--at the Cable Show in Boston this week and not at the CTIA Wireless 2012 show held just a few weeks ago in New Orleans.
Verizon Wireless CEO Dan Mead told the audience at the Cable Show that the company held the announcement for this week because it was such a big development for the company. In case you missed it, Verizon announced that it will soon introduce its viewdini service, an Android powered app that lets customers with LTE-enabled smartphones and tablets access video content from Comcast, Hulu, Netflix and mSpot.
Mead didn't talk about how much the service will cost, nor did he provide details on how the company will manage the enormous amount of bandwidth that Verizon subscribers might consume by watching video from viewdini over the carrier's wireless network.
We do know that Verizon has room on its LTE network (at least for the time being) to handle video content. At the end of the first quarter, Verizon reported that just 9 percent of its customer base was using its LTE network. But Verizon's LTE subscribers are growing at a steady pace and I'm sure that if this new viewdini service is a hit, it will prompt Verizon subscribers to upgrade to LTE even more quickly.
Verizon also indicated just last week that it plans to unveil a new shared-data pricing plan in July. Concurrent with that move, Verizon said that its legacy unlimited data plans will not be available to those customers who migrate to its shared data plans and who buy a new device at a subsidized price. So that means that few of these LTE subscribers who decide to use the viewdini app will do so with unlimited data--and therefore they will have to closely monitor their video usage or they will face huge overage charges.
I don't think the timing of the release of this viewdini app just a month or so before the planned debut of Verizon's new shared-data plans is a coincidence. Verizon is clearly rethinking its pricing strategies and wants to encourage more people to use data.
I hope that the company also is thinking about ways to encourage people to consume content without being fearful of racking up overage charges. Perhaps when viewdini debuts we will also see some content-specific pricing in which the price of the content (in this case a video) is bundled with network usage for a flat fee. I'm not the only one making this connection. GigaOm editor Kevin Fitchard thinks there's also a likihood that Verizon is considering this model as he outlines here.
At the CTIA Wireless show earlier this month, Verizon Communications CTO Tony Melone said his company was thinking about toll free data plans, where content providers would pay carriers for the data access charges users would generate in accessing their content. He acknowledged that there may be some net neutrality issues to consider but maintained that the model was something being weighed by executives.
This toll-free data model is similar to the Amazon Kindle model--Amazon pays AT&T (NYSE:T) for the traffic generated by a customer who downloads a book over AT&T's network. Of course, downloading a book is a lot less network intensive (and less pricey) than a video, but the model works well.
Getting over-the-top players such as Netflix, Hulu, mSpot and others to agree to a toll-free pricing model might not be an easy proposition. However, at the CTIA Wireless show earlier this month I did hear a lot of vendors talking about the need for OTT players to work with operators if they want to ensure a better experience for their customers. Perhaps that's why Verizon was at the Cable Show touting viewdini--it wanted to showcase a service where OTT players could work with the wireless operator to create a better experience for the user. --Sue