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 Verizon said its service, a mobile app dubbed "go90", will be
offered initially to a select set of its own customers, with
advertisements from well-known brands, which it declined to name,
but without newly acquired ad technology from AOL, the media company
it bought in June for $4.4 billion.
Verizon is targeting young viewers or millennials with about 100 to
200 hours of exclusive content from online video networks such as
AwesomenessTV and Machinima, said Brian Angiolet, Verizon's senior
vice president, consumer products. The free service will drive
revenue from data usage and targeted advertising.
Verizon's best chance to prove its advertising potential rests on
technology from AOL, which has built tools to deliver targeted Web
and mobile ads. That, combined with Verizon's customer data, should
improve targeting, analysts say.
The AOL technology is in the process of being integrated with
Verizon's video service, and targeted advertising tools will be
available over time, Angiolet said.
The service will launch officially to all users as soon as later
this month, a Verizon spokesman said.
Companies from Netflix Inc to Dish Network Corp already offer
Web-based video services through subscriptions, but the No. 1 U.S.
wireless company's ad-supported, short-form video model is unusual.
Go90 pits Verizon against Internet advertising industry heavyweights
Google and Facebook, and advertisers will take a "wait and see"
approach to determine how many viewers Verizon captures, telecom
industry consultant Tim Farrar said.
"Pretty much without exception telecom operators have not been
successful as third parties in exploiting the Internet access
service, whether it's video or anything else," Farrar said. "What
percentage of people’s app viewing is going to be over a Verizon app
versus YouTube or Facebook...That’s the biggest uncertainty."
Verizon's rival AT&T Inc has said it has mobile video services
targeting young viewers in the works. Smaller rivals Sprint Corp and
T-Mobile US Inc have said they are watching their competitors'
efforts closely.
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Verizon is in talks with advertisers and brands about content
sponsorships and original-content creation, Angiolet said. The
service lets users post comments, form interest-based groups and
clip and share videos in social networks, he added.
Verizon's video strategy "holds genuine promise," MoffettNathanson
analyst Craig Moffett said in a recent note. Verizon is currently
the only video service to offer advertisers customer data "based on
location, at the personal level rather than the household level,
with unprecedented knowledge of purchase intent and a wealth of
demographic and prior purchase information," Moffett said.
Verizon's content portfolio will evolve in coming months, executives
have said. Previously, Verizon said its upcoming digital video
service will offer content from the National Football League,
DreamWorks Animation's AwesomenessTV unit and Vice Media.
As its trial period begins, content partners include Comedy Central,
Food Network, ESPN, Discovery Network and VH1. From the web, it will
offer videos from Maker Studios, Machinima and StyleHaul, among
others.
(Reporting by Malathi Nayak, Editing by Peter Henderson and Ken
Wills)
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