Verizon Communications Inc. is in talks with Apple Inc. and Google over a potential partnership to provide an online TV service when Verizon launches 5G internet in Sacramento later this year, according to Bloomberg.
Last November, Verizon (NYSE: VZ) announced that Sacramento would be the first U.S. city where it would roll out commercial application of its 5G internet service, which depends on radio signals rather than fiber or copper cables. The high-speed service is expected to debut in the second half of 2018.
A partnership with Apple (Nasdaq: AAPL) or Google could allow Verizon to bundle TV with 5G, helping it to compete with local internet providers that already have online TV streaming services. Existing internet providers in Sacramento include Comcast Corp., which offers Xfinity Stream, and AT&T Inc., which offers DirecTV Now.
Verizon currently offers a TV bundle with Fios, its fiber-optic internet service, which serves East Coast customers. Previous plans by Verizon to develop online TV for the faster 5G internet service have so far been unsuccessful.
Go90, Verizon’s attempt at a mobile-video service, was discontinued in June. In a conference call with investors and analysts on Tuesday, Verizon executives attributed a $658 million write-down in the second quarter on product realignment related to the discontinuation of the go90 platform, media industry publication The Wrap reported.
Debuting Google’s YouTube TV or Apple TV could help Verizon deliver 5G to Sacramento by the end of the year, as was initially promised. More details about the TV partnerships are still being discussed, according to Bloomberg, citing a source familiar with the Verizon deal.
Verizon, Google and Apple representatives did not respond to requests for comment.
Video content delivered via the internet rather than through cable or satellite TV service is known as over-the-top, or OTT, content. For advertisers, OTT content can be more precisely targeted at potential customers. Rather than purchasing media space based on specific TV programs, advertisers can purchase ads in OTT content targeting viewers based on characteristics such as age, gender and ZIP code.
Adding another OTT content provider to the Sacramento area could expand the local advertising market, creating additional platforms for commercials. Increased competition could also make advertising more affordable, said Cynthia Metler, the founder and vice president of Media Solutions, a local media buying company.
“We are all for new ways to advertise and get messages across,” she said. “With a new online TV provider, we will have to look at the new opportunities it offers and see how it is similar and different from other providers. If it isn’t doing something different, it might be more affordable to be competitive in the market.”