Huggers Exiting Verizon

Erik Huggers is exiting Verizon Communications roughly five months after the telco inked a deal to acquire OnCue, the advanced video assets that Intel had developed to form the basis of what was to become an ambitious "virtual" MSO service that sold pay-TV packages over-the-top.

Reuters first reported of Huggers’ departure on Friday (May 30), with Huggers telling the outlet that he had worked well with his boss at Verizon, head of product development Marni Walden. "There were no conflicts at all,” he told Reuters. “The technology is great, the team is great, the future is secure, the dream lives on. It's time to hand the baby over to someone else.”

Verizon confirmed that Huggers is leaving the company, adding that his departure does not alter the plans it has in store for the assets it acquired from Intel.

“We obtained a strong combination of technological and personnel assets from Intel Media. We intend to strategically utilize the OnCue technology and talent to grow our business. That has not changed,” Verizon spokesman Bill Kula said, in a statement.

Huggers also told The Wall Street Journal that Verizon is investing “quite significantly” in the 350-person Intel Media division that had undertaken the original OnCue effort, and that Verizon intends to move the group from Santa Clara, Calif., to a new facility in the Silicon Valley by the end of 2014. Huggers, rumored to be in the running for the lead job at Hulu when the future of Intel Media and the OnCue project was in doubt (Mike Hopkins was named CEO of the Web video hub last fall), told the paper that he has “a couple of irons in the fire,” but expects to stay in Silicon Valley.

Verizon has yet to outline its full plan for OnCue, though people familiar with it say the initial focus is to help the telco speed the development of a next-gen IP video product that can help Verizon catch up to Comcast and its cloud-fed X1 platform while also giving Verizon independent control of its set-top roadmap and the ability to trim CPE-related capex costs.

Still, some of Verizon’s OnCue-related work will include the pursuit of wireless and over-the-top options that would enable Verizon to bring more mobility to the FiOS video platform, Verizon chairman and CEO Lowell McAdam said in March at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.

Before putting the OnCue assets on the block, Intel Media had designs on attacking a saturated pay-TV market with a broadband-delivered video subscription service outfitted with “smarter bundles” that would appeal to younger, connected consumers.

Intel Media’s original plan was to launch services by the end of 2013, but those plans were scuttled amid rumors that new Intel CEO Brian Krzanich had soured on the idea.  

The reasons why Intel Media pulled back have varied. While some sources indicated that the company had trouble landing enough carriage deals and the rights to cobble together a compelling service, multiple people familiar with OnCue’s plans said Intel Media was successful in putting distribution deals place, but then refused to sign them over fears that subscriber milestones and other commitments required by those contracts proved too steep.  

Krzanich told Re/code earlier this year that Intel  lacked the scale to move ahead on a pay-TV service on its own. “When you go and play with the content guys, it’s all about volume. And we come at it with no background, no experience, no volume,” he told the publication.