Verizon will acquire Intel Media, a business division dedicated to the development of Cloud TV products and services, for an undisclosed sum.
Verizon will purchase intellectual property rights and other assets that enable Intel’s OnCue Cloud TV platform. Verizon will also make employment offers to substantially all of the approximately 350-person Intel unit, which will continue to be based in Santa Clara and be led by its current management team.
Once the transaction is closed, Verizon expects to integrate IP-based TV services with FiOS video to further differentiate FiOS from traditional cable TV offerings and to reduce ongoing deployment costs. FiOS customers are also expected to benefit from search and discovery, interactivity and cross-screen ease of use – integrated with the Verizon Wireless 4G LTE network.
Lowell McAdam, chairman and CEO of Verizon, said: “The OnCue platform and team will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where and how they want it. Verizon already has extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile. This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation. We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices.”
Erik Huggers, corporate vice president and general manager of Intel Media, said: “We’re incredibly proud of what we’ve achieved. Intel provided us with the technological know-how and resources to develop products and services that will fundamentally change the way we experience TV, and now Verizon gives us access to the marketplace and the ability to scale. It’s the next logical step, and we’re excited about the road ahead.”
Brian Krzanich, CEO of Intel Corporation, said: “Intel Media’s over-the-top TV products are truly innovative and under Verizon’s ownership have the potential to change how people interact with content. The critical factor in gaining efficient access to content is based on your ability to scale quickly in subscribers and end users, which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers. This sale also enables Intel to further align our focus and resources around advancing our broad computing product portfolio in segments ranging from the Internet-of-Things to data centers.”
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close early in the first quarter of 2014.
Verizon also published its Q4, 2013 results on Tuesday, January 21. In the quarter, Verizon added 126,000 net new FiOS Internet connections and 92,000 net new FiOS Video connections.
Verizon had a total of 6.1 million FiOS Internet and 5.3 million FiOS Video connections at year-end 2013, representing year-over-year increases of 11.9% and 11.3%, respectively. FiOS penetration (subscribers as a percentage of potential subscribers) continued to increase. FiOS Internet penetration was 39.5% at the end of fourth-quarter 2013, compared with 37.3% at the end of fourth-quarter 2012.
In the same periods, FiOS Video penetration was 35.0%, compared with 33.3%. The FiOS network passed 18.6 million premises by year-end 2013.
