Verizon is bringing new ideas and products to the subscription TV marketplace as it celebrates the second anniversary of Verizon FiOS TV this week and as customers and industry analysts alike praise the all-fiber-optic TV service.

The service is a hit with customers. In the short two years that Verizon has been offering FiOS TV in its first market, Texas, more than 25 percent of the customers there who could subscribe to FiOS TV have done so. Penetration for FiOS Internet, launched in August 2004, exceeded 35 percent in Texas as of June 30, 2007.

Independent experts from the industry research firms Parks Associates, In-Stat and the Yankee Group, as well as customers, say Verizon is offering more choice for entertainment throughout the home and providing high-quality service that creates customer loyalty.

When it was introduced in September 2005, FiOS TV offered excellent value and superior picture quality and performance to its subscribers. Soon after, Verizon began adding new services and personalizing features to differentiate FiOS TV from the competition and deliver greater value to its customers. This commitment to continuous service innovation is moving Verizon FiOS TV to the forefront of the marketplace, according to Kurt Scherf, vice president and principal analyst for Parks Associates.

"Verizon is leveraging its infrastructure and technology advantages - its fiber-optic network, the in-home network and the FiOS TV platform - to maximum effect," Scherf said. "At this point, FiOS TV is 18 months to two years ahead of where the rest of the industry needs to be."

Among the FiOS TV breakthroughs cited by Scherf are its Home Media DVR service, which was introduced in August 2006, and the new FiOS TV interactive media guide that helps customers quickly and easily find what they want from all content sources - TV listings, video-on-demand catalogs and digital video recorders - in a single search.

Home Media DVR has two groundbreaking features not available from cable: multi-room DVR and Media Manager. With multi-room DVR, families can watch different recorded shows on up to three TVs at the same time, and they can pause a recorded show in one room and resume it in another. Media Manager allows customers to create photo slideshows and music playlists on their home PC and play them on their home entertainment systems.

"With Home Media DVR, Verizon is opening up a variety of new entertainment experiences for its subscribers," said Scherf. "When you add the powerful yet simple content-search capabilities of the new IMG, it's clear that FiOS TV provides a more personalized user experience that is very different from the 'one size fits all' services that others offer."

FiOS TV Called a 'Change Agent'

Michelle Abraham, principal analyst for In-Stat, believes that this focus on service innovation has positioned FiOS TV as an "agent of change" in the pay TV industry.

"Change agents are service providers that force their competitors to respond to unique new features they bring to market - features that positively change the user experience," Abraham said. "In much the same manner that satellite TV's advocacy of the DVR forced cable providers to add DVRs to their offerings, FiOS TV is rolling out new features and functions that cable will be forced to address.

"Verizon has steadily enhanced FiOS TV, moving it to the head of the class," Abraham added.

Verizon also gets kudos for its success in delivering high-quality customer care, said Yankee Group analyst Josh Martin, whose research brings him into contact with a variety of subscription TV customers. "You can never minimize the importance of customer service to the strength of the business relationship and customer loyalty," he said. "A good customer service experience begins with installation, continues with regular support and is an important customer retention tool."

Two-Year Customer Applauds FiOS TV

Customers like Marc Clemons of Keller, Texas, have responded by signing up for the service as soon as it's available in their area. Clemons, who participated in a pre-launch trial in 2005, was one of the first customers to sign up for the service when it launched. Two years later, he is still bullish.

"It's been the most incredible TV service I've ever had," he said. "You're either part of the technology revolution or you're not, and I wanted to be part of the cutting edge. I was lucky when Verizon solicited me for the trial, and it's been a whirlwind of incredible opportunity ever since."

Shawn Strickland, vice president of video solutions for Verizon, said, "On behalf of the thousands of Verizon employees who work on FiOS TV, we appreciate the positive reviews of these experts and the comments we receive from customers every day. We look forward to delighting our customers with more new services, including bringing Internet content to the TV, which will further enhance their whole-home entertainment experience."

Verizon launched FiOS TV in Keller, Texas, on Sept. 22, 2005, delivering the service on the nation's largest fiber-optic network that extends all the way to customers' homes. As of June 30, 2007, Verizon FiOS TV had 515,000 subscribers and was available to more than 3.9 million households in nearly 500 communities in 12 states. The company will update FiOS TV statistics when it reports third-quarter earnings on Oct. 29.