TECH
09/13/2014 09:48 am ET Updated Sep 17, 2014

Verizon To Launch Internet TV Service That Lets You Pay For Only The Channels You Want

Verizon is finally ready to acknowledge that cable TV just isn't working for a lot of us anymore.

The company is planning to launch its Internet-based TV service that can be watched on mobile devices in the "late first half of 2015," Lowell McAdam, Verizon's CEO, said at a Goldman Sachs investor conference in New York on Thursday.

It's unclear what exactly the service would look like, but McAdam said it would offer "a la carte" options, rather than being bundled like expensive cable packages are now.

Think Netflix, but with live streaming. McAdam said at the conference that the service would include programming from "the big four" networks -- CBS, ABC, NBC and Fox.

"No one wants to have 300 channels on your wireless device," he said, according to a transcript of the conference. Greg Ireland, a research manager at IDC, the technology research firm, said Verizon's offering could borrow ideas from services like Netflix or Amazon Instant Video, which offer interactive menus and will remember where you are in a program, regardless of what device you started watching it on.

Verizon's move comes as the TV industry is set to undergo a massive shift. The rise of streaming services like Netflix, Amazon Prime Instant Video and Hulu, which for a flat fee offer on-demand viewing of movies, TV shows and original programming, pose a threat to traditional "linear" cable and satellite. An increasing number of people -- especially young people, a highly coveted demographic for advertisers -- are cutting the pay TV cord and opting for streaming services over expensive cable or satellite packages. According to a report this spring from Experian Marketing Services , nearly a quarter of young adults between 18 and 34 who subscribe to Hulu or Netflix don't pay for TV.

Experian also said that the number of cord-cutting homes has increased dramatically in just three years, from 5.1 million homes in 2010 to 7.6 million homes in 2013.

Pay TV subscriptions have been flat or declining slightly, while Netflix continues to grow at a rapid clip. Netflix ended the June quarter with 36.24 million members in the U.S., up from 29.81 million at the same time last year.

About 100 million households in the U.S. pay for traditional TV.

It's unclear what exactly Verizon's product would look like. But to get an idea, said IDC's Ireland, it could be helpful to look to what Dish is working on. The company is developing a service that would allow you to watch live TV on multiple devices, but not require a cable box.

"[It could be] a service that offers fewer channels at a smaller price point, targeting a piece of the market that may not now be pay TV subscribers," Ireland said of Verizon's new product. Such a service would "appeal to those outside of the pay TV universe today and get them back into that universe."

Verizon's Internet TV product will incorporate technology from Intel's OnCue, which Verizon announced it would buy from the chip maker in January. Intel previously planned to launch its own TV product by the end of last year, but ran into opposition from cable and satellite companies, which make tons of money from expensive bundles.

Verizon's McAdam told investors that much of the technology is in place for the network. Now, the company is negotiating with content providers, which in the last two years have become much more receptive to delivering programming in different ways.

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