Why Verizon Is Launching A Video Service No One Asked For
Video is everywhere. You can watch it on YouTube, Netflix, Hulu, Amazon, iTunes, Google Play, Yahoo, Facebook, Instagram, Snapchat, or Spotify—not to mention the myriad cable and network TV channels that are now letting users watch their favorite movies and shows on apps or online.
So, yeah, you can watch pretty much anything, pretty much anywhere, anytime you want.
Which is why it’s somewhat strange that Verizon is planning to launch its very own, brand new video service this fall—and, according to a Bloomberg report, could launch it as early as next week.
The company has kept details of its new service somewhat under wraps since it was rumored to be in the works earlier this year. But, as of now, we know Verizon’s new video service will be “mobile-first.” It has an unfortunate name (Go90). It will depend on partnerships with content creators, such as AwesomenessTV and Vice. And it will be coming very soon.
According to Bloomberg, Go90 will be freely available to everyone but will feature ads. And it will also reportedly allow users to share clips easily on social media. A spokesman for Verizon declined to comment for this story except to say, “I can tell you we are excited about it.”
Which is all kind of… weird. Sure, original on-demand content, brought to you by what’s known as OTT (or over-the-top) services, is hugely popular right now. After all, it is the future of how we’ll watch TV. (At least until we get VR … .) But why does Verizon need its very own service? And how will it be able to compete—to serve really any purpose at all—with so much competition already out there?
For Verizon, Go90 may be more about the company’s vision than about the consumer. Verizon already owns the way millions of Americans use their phones, TVs, and home internet. Offering up a service that might make its real moneymakers even a little bit more compelling, especially to teens and millennials, might be enough to make another video channel no one was really asking for worthwhile.
All About the Teens
Because what is clear is that Verizon seems really, really, really anxious about reaching a specific demographic: teens and millennials. This is evident in both the press releases the company itself has shared and the partners it seems to be choosing. It’s unclear which partners exactly will be part of Go90 at launch, but Verizon has announced deals that could include college sports, lifestyle programming, and original shows from AwesomenessTV and Vice. All of which, the company has said, will appeal to a younger demographic.
But, even if that’s the demographic Verizon is hoping to entice, a very real question is that with all the options out there—especially YouTube, which is free—why would a millennial or teen turn to watch a TV show on Go90? After all, YouTube, Netflix, Hulu, Amazon, and the myriad other options are all relatively optimized for mobile, too.
Verizon, it seems, is thinking more about what it wants out of consumers than what consumers need out of Verizon. It already serves up data plans for phones, Internet service, and FiOS (with its own TV on mobile app, too). But in the US, those industries are becoming saturated—the majority of the people who want cell or Internet service may already have them. And young people are increasingly choosing not to spend money on services, once thought to be necessities, such as cable. (Comcast, notably, is also expected to launch a new online video service.)
From Verizon’s perspective, Go90 may be a way of reminding younger consumers of Verizon’s brand, or to encourage younger users to choose (or ask their parents to choose) Verizon services, like its mobile or Internet offerings, if it means they’ll get access to Go90. (That, of course, becomes less true if Verizon allows anyone to use it.)
“Why do you come to the market now with a video service? What is the real fundamental reason?” asks longtime video analyst Dan Rayburn. “It’s to drive other Verizon services. There’s not a lot of money to be made in delivering video, and especially not if you don’t own the content.”
Verizon also acquired AOL earlier this year—which then bought ad-tech company Millennial Media earlier this week. For Verizon, launching its very own video service could be a way to not only serve up content it already has, if it one day offers AOL shows, but also to demonstrate its ad-tech prowess, if it serves up ads. Or, possibly, the service is really about capturing data on what younger users like and watch—all in an effort to better use its ad-tech business to serve up ads elsewhere.
Teens and millennials are the future. That much we know. And they’re Verizon’s potential future customers. The company is clearly experimenting with new ways to reach those consumers—and likely hopes to entice them for the future (and beyond). But for Verizon to succeed it will need to do more than offer what’s already out there. After all, any benefits to the company depend on users tuning in at all.