As Expected, Verizon's Attempt To Woo Millennials Is Falling Flat On Its Face
from the hip-to-be-square dept
For years now Verizon has made it clear that it no longer wants to be in the fixed-line broadband business. Despite countless billions in taxpayer subsidies and numerous unfinished obligations, the company has all-but frozen serious fiber deployments. It has also been either selling off unwanted DSL customers to smaller, ill-equipped telcos (which which almost always ends poorly for everybody except Verizon accountants and lawyers) or has quite literally tried to drive unwanted users away with both rate hikes and apathy.
Instead, Verizon executives decided to try and transform the stodgy old telco into a sexy new Millennial-focused advertising juggernaut. So far that has involved launching the company’s Millennial-targeted “Go90” streaming video service, spending $4.4 billion on acquiring AOL, trying to acquire the drifting wreckage that is Yahoo, and developing controversial stealth ad tracking technology to build covert profiles of customer behavior as they wander around the Internet.
Despite the company heavily marketing Go90, zero rating the service so it doesn’t count against usage caps, and even giving away data to users that try the service, it has seen extremely limited adoption among Verizon’s target demographic. Verizon has refused to release subscriber numbers for the service, and the Go90 app is slowly falling down both the Apple App Store and Google Play rankings. Things have been so underwhelming, Verizon CEO Lowell McAdam was forced to admit to attendees of an investor conference this week that the company may have “over-hyped” the platform:
“It did get a little bit overhyped, and we contributed to that to some extent,” McAdam said in a keynote appearance at the 44th Annual J.P. Morgan Conference. McAdam explained that Verizon’s strength is in building networks, not necessarily developing popular content. “It’s not exactly our strong suit,” McAdam conceded.
Granted everybody not at Verizon knew that the company’s attempt to magically make an old telco sexy for millennials would be a hard sell, especially given Verizon’s long history of trying and failing to be content innovators. The company has long tried and failed when leaning outside of its core competency, whether that’s operating its own app store, running a streaming venture with Red Box, or briefly operating a news website where authors were prohibited from talking about things like surveillance or net neutrality. Phone companies, after a generation of regulatory capture and “yes men” boardroom culture — simply aren’t genetically built for real disruption and innovation outside their core competency, no matter how many executives seem to believe otherwise.
McAdam then tried to walk back his comments a little, and tried to argue that Go90 isn’t a failure, it’s just a vision that’s going to take a lot of time, and a lot of money (which won’t be spent on networks), to execute:
“We’ve seen enough success to make us excited about continuing to work it… “Go90 is in a good spot from our perspective, we’re going to continue to pursue it. But our expectations are realistic.”
As a writer I generally love telecom investor conferences for the simple fact that for whatever reason, phone and cable executives still haven’t figured out that the public can hear what’s being said at them. What usually happens is a telecom executive will say something uncharacteristically candid, then the company’s marketing department will jump in to try and spin the comments a few weeks later. As such it shouldn’t be long before Verizon unveils a new marketing barrage that spins McAdam’s comments and claims Verizon’s quest to become sexy in the eyes of Millennials is going better than ever.