Media companies may be happy with the growing audience on Verizon’s mobile-first go90 streaming service, but many advertisers are wondering why the service provider decided to launch a standalone online video app at all, The Wall Street Journal reports.
Ad buyers told WSJ that the service provider is “disappointed” with slower-than-anticipated audience growth, and some are wondering if a video play was the best strategic choice for Verizon. Go90 is “like YouTube but not as good,” quipped Warren Zenna, EVP and managing director of Mobext, in the article, who added the streaming service is “a bit of a mystery” to advertisers.
While free to any viewer thanks to its ad-supported model, go90 is up against tough competition from video-heavy social media companies like Facebook and Snapchat which are go-to smartphone apps for many consumers.
But Verizon SVP of consumer product portfolio, Brian Angiolet, countered that as a growing digital property, it shouldn’t be compared to huge digital video providers like Netflix or Facebook.
Verizon said back in January that it did not expect go90 to be profitable in 2016. But its purchase of Yahoo’s assets and the recent announcement that it has integrated AOL’s advertising platform, ONE, into go90, may better position the provider to attract ad buyers and sellers over the next few months. CEO Lowell McAdam told investors on the company’s second-quarter earnings call that the Yahoo acquisition would provide “meaningful” cost savings by merging Yahoo’s assets with AOL, although he didn’t give details on how much those savings would be. “By acquiring Yahoo, we are scaling up to be a major competitor in mobile media,” he said on the call.
Further, AOL saw revenues of $713 million in the second quarter, which Verizon noted as strong growth for the division that it acquired in mid-2015 for $4 billion.
Verizon may take advantage of Yahoo’s existing content licensing deals, such as those with Major League Baseball and the National Hockey League, among others.
In the meantime, Verizon is continuing to try and attract a larger audience to go90. The provider ditched required registration in June, added curated channels, and made it possible to cast content to a larger screen using Apple TV or Google Chromecast.
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