Here’s Why Verizon is Taking On Digital Video

Verizon Communications (NYSE:VZ) will pay over $510 million to resolve patent-infringement lawsuits related to video storing and streaming technology. The company will settle a dispute with TiVo (NASDAQ:TIVO) over DVR technology for about $250.4 million. Verizon will also pay more than $260 million to ActiveVideo Networks to settle a case involving video-on-demand features.

“We are pleased to have reached settlements with both TiVo and ActiveVideo in these two matters,” said Verizon spokesman Ed McFadden in an email. Verizon is not the first company with which TiVo has had a legal conflict — TiVo settled a dispute with Dish Network (NASDAQ:DISH) last year. TiVo is expected to pursue more lawsuits related to its DVR technoloy in the future.

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Verizon is wasting no time moving on, developing subscription streaming, movie sales, and rental services for the holiday season. The company’s joint venture with Coinstar (NASDAQ:CSTR), Redbox, will compete against digital video services provided by Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN). Digital streaming is growing to a larger and larger segment of overall household entertainment spending in the United States, according to the Digital Entertainment Group.

Home entertainment spending in the US grew to $4.45 billion in the first quarter of 2012. These companies will be fighting for slices of the total digital revenue pie, which rose over 74 percent to $1.2 billion in the same period.

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