Wednesday, May 23, 2012

Verizon's Viewdini Magic Act -- Charge Service Providers for Vid Bandwidth, NOT Customers

Verizon launched its new mobile video aggregation app for Android yesterday called "Viewdini" (which is essentially the successor to "Vcast") (by the way, isn't Vcast a more elegant name than Viewdini?).  In any event, via this new app, Verizon customers now can access multiple video providers, including Netflix, Hulu, Comcast's Xfinity, and Verizon's own FiOS service.

Good for video service providers and consumers, right?  Well, not so fast.  Video consumes enormous bandwidth, of course, which absorbs the customer's data allowance fast fast fast -- which, under traditional carrier billing, could mean that the customer's wallet is emptied fast fast fast.  Not exactly good for anyone in the overall eco-system, including the carrier itself (in this case, Verizon) which feels customer wrath (rightfully) when this happens.

So, what's a carrier to do?  Turn the tables on the traditional billing model, that's what!  Specifically, Verizon may be setting things up for consumers to essentially enjoy "free pipes" and not be charged against their data plan for video consumption and, instead, charge the video service provider itself.  At least that's what Kevin Fitchard of Gigaom posits; and his perspective/prediction feels right here.  In his words, "Verizon could skim a little from the top of each purchase, for instance collecting a portion of a movie rental or purchase fee.  In the case of subscription video services like Hulu Plus or Netflix, Verizon could take a share of monthly revenue from every subscriber that used Viewdini or just charge the video providers flat per-gigabyte or per-stream fees."

This makes sense to me.  Everyone wins here.  Customers get the video they want via the pricing they choose for the video content they want; they don't get gouged by "hidden" carrier bandwidth charges which they otherwise would rack up invisibly; they, therefore, consume more video content on their mobile phones or tablets; they, therefore, are happier customers; the video service provider is happy because more customers consume more video content accordingly (and they can seamlessly build bandwidth charges into their business models); and the carrier is happy because they get paid for the pipes they have laid for the benefit of the entire video eco-system (and, therefore, are significantly more motivated to continuously upgrade their backbone to foster more and more consumer consumption).  And, then, the virtuous cycle continues.