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CES Report: Verizon Sees 2015 as an Inflection Point for Video

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"The seeds were planted and the flowers are growing this year," said James Segil, chief marketing officer for Verizon Digital Media Services. Speaking at International CES 2015, Segil said this will be a year of momentum for online video, an inflection point where traditional broadcasters shift to IP-based distribution.

How people get their video entertainment is no longer dictated by primetime schedules, Segil said. Viewers want the content they choose on the devices they choose. Broadcasters see that, and they're now on board with the change more than they have been before.

"If you don't offer flexibility to customers, you're going to narrow your reach," Segil said. Viewers are looking for entertainment systems that they can tailor to their schedules.

Earlier at CES, Verizon chairman and CEO Lowell McAdam repeated comments that his company will launch an over-the-top (OTT) bundle this year, with 20 to 30 channels. It should debut in the second half of the year and, like Dish's just-announced Sling TV, will be geared to young adults.

In talking with broadcast customers, Segil said their primary concern when buying streaming products and services is that they'll have to pay a lot upfront. VDMS lets them pay for only the services they use, so that there's no risk in trying something new. If an offering doesn't find an audience, it can easily be scrapped. With viewers looking for new online offerings, this is the time to experiment.

"We know of experiments that are rolling out in a very big way," Segil said.

At CES, VDMS highlighted its tool for turning mezzanine files, live streams, or VOD assets into smaller clips automatically. The system works on any computer, and uploads clips to the cloud where they're encoded for delivery on any device. Clips could then be used in highlight reels or curated channels. Segil sees it building new, highly personalized news and entertainment streams. The system will roll out commercially by the end of March.

VDMS is the rare position of being both a content distributor for its own services and for other companies. Not just a vendor, it's also a customer, inventor, acquirer, and deployer network, Segil said. The company's goal is to make it easy and affordable for broadcasters to take risks, so they can experiment with next-generation TV offerings without large upfront capex investments. As Verizon uses its own tools, the company has more credibility with customers, Segil believes.

"We eat our own sirloin," Segil added.

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