from the hip-cat dept
For some time now Verizon’s made it very clear it wants nothing to do with its core fixed-line broadband business. Instead, Verizon’s taking a huge bet that it can transform ye olde phone company into a huge advertising and streaming media empire, with a focus on wooing (read: selling ads to) Millennials. To that end Verizon acquired AOL and its ad technology for $4.4 billion last year. It developed a highly-controversial stealth ad tech that can track these youngsters around the Internet without their consent, and it created its own “Go90” streaming video service specifically aimed at Millennials.
More recently, Verizon announced it would be spending $650 million on a 25% stake in AwesomenessTV, a streaming venture aimed at, you guessed it, Millennials. AwesomenessTV was sold to Dreamworks for $33 million just three years ago, but Verizon believes the mark up is worth it, and the acquisition will be the cornerstone of the company’s new Millennial sexification efforts:
“We are capitalizing on the emergence of these strong media brands that can reach millennials and Generation Z,? said Brian Angiolet, Verizon?s senior vice president for consumer product and marketing. ?It?s like we?re in the early days of cable, and we want to participate more fully in the economics of that trend.?
AwesomenessTV will, moving forward, help feed exclusive content into Verizon’s Go90 platform. The problem is that by all appearances, Verizon’s Go90 rebranding efforts (which remove the Verizon name entirely in ads) aren’t going all that well. Despite Verizon giving away some free, extra wireless gigabytes of data to users that try the service, Go90’s ranking on most app stores appears to have only floundered since the initial launch last year. Analysts at firms like UBS aren’t impressed either, noting that most Millennials are already getting their video content elsewhere:
“We believe Go90 will be hard-pressed to mount a meaningful challenge to mobile video and social networking leaders YouTube, Facebook, Instagram, Snapchat, Netflix (NFLX) and Hulu,? wrote UBS analyst John Hodulik in the report. ?That said, Verizon is pulling various levers to ramp up interest in and usage of Go90, including more live and exclusive content and free data for Verizon Wireless customers.”
Even the company’s plan to abuse its position as an anti-competitive gatekeeper hasn’t really helped. The company gave the FCC and its net neutrality rules a giant middle finger recently by exempting Go90 content from company usage caps, but even this unfair advantage doesn’t appear to have lit much of a fire under the initiative. As a result the effort has been mocked by T-Mobile CEO John Legere, who called Go90 a “debacle,” that will in time be spoken of alongside things like Amazon and Facebook’s failed attempts to sell their own phones.
Keep in mind that Verizon executives, after the departure of former Verizon CEO Ivan Seidenberg, decided to effectively give up on fixed line broadband — something it was actually marginally good at — to pursue this new initiative. As such, Verizon stopped expanding FiOS (despite billions in subsidies and tax breaks for fiber never delivered) and began trying to offload or otherwise ignore the company’s DSL customers. In some instances, this even meant outright refusing to repair DSL customers hit by natural disasters, citing expense.
Many of these resources were instead diverted to wireless (which makes sense from a ROI and future-proofing perspective). But Verizon executives honestly believe that if they spend enough money they can become an ad empire akin to Facebook or Google. But not even Verizon’s experience with shady privacy violations, notably anti-competitive behavior and PR distortion fields appears capable of turning the company’s legacy telecom empire into a sexy new media brand. Still, it should prove entertaining to watch Verizon spend billions trying.