FreedomTV: How Frontier Could Disrupt With HBO OTT, TiVo and Cheap Broadband

If you think that $20 monthly broadband service Frontier Communications has been marketing is disruptive, imagine how it could shake things up if it begins selling a bundle that includes TiVo’s Roamio OTA (over-the-air) DVR and an app offering access to the over-the-top network HBO plans to launch this year.

Frontier, which announced a deal with TiVo on Wednesday, didn’t detail the over-the-top services that it will offer when it begins pitching Roamio in mid-2015. But its CEO Maggie Wilderotter has ties to top executives at HBO and parent Time Warner Inc. going back to her days as CEO of interactive TV firm Wink Communications.

Former HBO Chairman Michael Fuchs sat on the board of Wink, a company that pioneered the idea of using interactive overlays to allow cable subscribers to obtain coupons, access real-time sports and weather info, and even order premium networks with a click of a remote control. John Malone’s Liberty Media acquired Wink in 2002 for about $100 million.

Wilderotter
Wilderotter

Wilderotter also knows cable pioneer John Billock, whose resume includes stints as president of HBO’s U.S. Network Group, vice chairman of Time Warner Cable Enterprises and director of TiVo Research and Analytics. Billock, who is quoted in this interactive TV deal Wink and HBO announced in 1998, is now chairman of Central European Media Enterprises, a company controlled by Time Warner Inc.

In 2013, HBO and Comcast began testing a $50 monthly subscription bundle that included broadband Internet, basic cable and HBO. By using the TiVo OTA, Frontier will likely be able to undercut Comcast and other cable operators on pricing. Retransmission-consent fees that cable operators pay to local broadcasters have seen pricing for basic cable programming packages balloon in recent years. By using over-the-air antennas connected to Roamio, Frontier subscribers won’t pay a dime to watch live and recorded primetime series from the Big Four broadcast networks.

Frontier isn’t the first telco market an OTT device to broadband customers. In 2013, Oregon’s Canby Telecom began selling a $12.95 monthly service that includes a Roku 3 streaming video set-top. Canby uses the Elemental Live video processing system from Elemental Technologies to package streams from eight broadcast channels into a Roku channel called EZVideo.

Wilderotter led Frontier to become one of the first telecom providers to launch an online video portal. The TumTiki portal that it introduced in 2011 aggregated free online video content from Hulu, ABC, NBC, Fox, Food Network, Bravo, FX, Syfy, HGTV, AMC, National Geographic, Oxygen, Comedy Central and TBS. It launched TumTiki in the days before Hulu charged subscriptions, and before most cable or broadcast networks limited access to full-length episodes of hit TV series to authenticated pay TV subscribers.

Frontier mothballed TumTiki in 2014. But it may come roaring back this year with a product called Frontier FreedomTV. Frontier filed a trademark application for the brand Frontier FreedomTV on Oct. 24, reserving the right to use the brand for “hosting of digital content on the Internet; providing temporary use of non-downloadable software for use in electronic transmission and streaming of audio, visual and digital media content for others via computers, tablets, mobile phones, television, wireless communication devices and optical communications networks.”

Wilderotter began touting the potential of OTT video years ago. “Video is very important. We think over-the-top video is probably more important than anything else. So when we have more to talk about that, we will let you know,” Wilderotter said on a Frontier earnings call in May 2012.

Wilderotter also hinted at a Frontier OTT play on a call Frontier held with investors last month to announce a $10.5 billion deal in which it will acquire Verizon systems in California, Florida and Texas. “You will also see Frontier play in the over-the-top, over-the-air streaming business. We think that’s another huge opportunity for us,” Wilderotter said.

Both Verizon and Frontier took questions from Wall Street analysts on separate calls scheduled on Feb. 5. I remember on the Verizon call, one analyst noting that Frontier executives had projected that they would generate more cash flow than Verizon has on the systems it has owned for decades.

How will Frontier pull that off? If there’s anyone who can find a way to squeeze interactive TV advertising and even mobile video advertising revenue out of a DSL subscriber, Wilderotter — with her experience at companies ranging from Wink to AT&T Wireless – will find a way to get it done.