Verizon Digital Media Services, a business unit of
Verizon Communications Inc.
) which oversees digital content services has acquired U.S. based
upLynk, a technology company specialized in adaptive streaming
and television cloud services. The acquisition is expected to
boost Verizon's growing market share in data and cloud services
as it will enable delivery of digital content to all devices and
platforms complementing its Digital Media Services.
Given the surge in demand for online video streaming thanks to
latest developments in technology, Verizon is focusing on growing
its Digital Media Services business backed by its robust network.
Launched in 2011, Verizon's Digital Media Services has enabled
advertising, entertainment and media companies deliver live and
on-demand, customized video content to consumers through multiple
devices such as TVs, smartphones and tablets.
We believe that with the latest addition, Verizon will be able to
integrate its advanced infrastructure with the simplified video
streaming solutions and cloud-based broadcast technology of
upLynk while leveraging its own video platform and global
network. Nevertheless, Verizon is also likely to gain from the
niche customer base of upLynk that includes
The Walt Disney Company
Moreover, Verizon is consistently collaborating with media and
cable companies to foster market share gains in different service
categories as well as enter new sectors without seeking merger
and acquisition strategies. The company has tied up with Cox
Communications to offer bundled service packages consisting of
video, phone and Internet in Phoenix and Las Vegas.
The telecom carrier has also extended its multi-year agreement
with National Football League (NFL) for content delivery. The
renewed agreement is expected to extend ties between the two
entities through the inclusion of live afternoon coverage of
games aired by
) and Fox Sports on Sunday and as well as off-season games.
Recently, the company has also entered into a long-term contract
with Turner Broadcasting, a unit of
Time Warner Cable Inc.
) for providing Turner's content to FiOS TV Subscribers. The deal
would provide Verizon's FiOS TV Subscribers access to several
entertainment channels including TBS, TNT and Cartoon Network,
which can be watched through television, PC, tablet and mobile
handsets. All these developments reflect Verizon's increased
efforts to go beyond the conventional telecom market.
Moreover, we believe that the latest acquisition coupled with
organic growth in multimedia content delivery platforms will
provide Verizon a significant opportunity to grow beyond the
saturated and fiercely competitive U.S. wireless market.
Currently, Verizon has a Zacks Rank #3 (Hold).
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