To boost its TV Everywhere delivery workflows, Verizon (News - Alert) Digital Media Services has acquired upLynk, which offers cloud-based encoding, storage, playback, ad insertion and analytics for online and mobile video.

upLynk’s differentiator is its ability to use a single adaptive video format across all devices, delivered in an as-a-service model so that customers can pay as they go. Thus, upLynk in theory enables more agile video workflows.

“As the experience of watching broadcast television changes and the media marketplace shifts, the addition of upLynk’s unique capabilities allows Verizon Digital Media Services to better meet our customers where and how they want to deliver video,” said Bob Toohey, president of Verizon Digital Media Services. “Simply put, this acquisition provides intelligent, scalable and more flexible ways of streaming video for our customers.”

The company has some chops: Most notably, upLynk powers the Watch Disney apps.

TDG analyst Colin Dixon (News - Alert) broke down the upLynk value proposition: “Capital expenditure for upLynk’s customers is minimal since they only need an off-the-shelf PC to encode the channel at their facility,” he said in an analyst brief. “The stream is delivered to upLynk’s cloud-based streaming solution, where the company takes care of the rest. This architecture is particularly applicable to the Watch ABC app, where every affiliate needs to encode its channel separately.”

upLynk streams each channel using the cloud, scaling to meet the unpredictable demand associated with online video delivery. The company uses Amazon Cloud Services in the backend.

There’s also a targeted advertising dimension to this, traditionally not a big part of what Verizon does. “Another unique feature of upLynk is that it can replace the ads in the broadcast stream. In the Watch ABC app, all the broadcast ads are replaced with new online versions,” Dixon explained. “upLynk’s solution can target ads all the way down to the individual, so two people can be watching the same ABC affiliate on their iPads and see a different ad load.”

WATCH ABC aside, the pay-as-you-go approach has benefits for content owners of all sizes—an important aspect for Verizon, which tends to focus on large fish. “Rather than asking customers for upfront commitments, upLynk only asks them to pay for the resources they actually use,” Dixon said. “This has a number of benefits for customers. For very small providers, up-front commitments can be too pricey. upLynk lets them start small. For all customers, it can be very difficult to predict how much bandwidth will be needed. Particularly in the case of local affiliates, if a big news story breaks there can be a huge spike in usage. Rather than commit to a large bandwidth requirement to cover these unpredictable spikes in demand, upLynk’s model scales up only when needed.”

He added that Verizon’s heft will conversely be good for upLynk: “Bringing together upLynk’s cost effective encoding and streaming solution with Verizon Media Services should allow the solution to scale up to a national footprint and the largest of content providers.”