Brief:
- Verizon announced it will end its Go90 service on July 31, Variety reported. The telecom giant in February said it would fold Go90, which provides free, ad-supported video service, into Oath, Verizon's content company whose brands include Yahoo and AOL. Many said that move pointed to doubt on the future of the video service.
- Go90 launched three years ago as a mobile-first video service for tech-savvy millennials, but was unable to grow a mass audience and secure major advertising dollars. After promoting Go90 programming on Oath sites and apps in the past six months, the total audience reached an average of more than 17 million unique viewers a month, per Variety.
- Verizon invested about $1.2 billion in technology and content for Go90 since its 2015 launch, Digiday reported. Now, Go90's shows and content will be returned to its production partners.
Insight:
Verizon had high hopes for Go90, which was given that name because smartphone users typically tilt their devices 90 degrees to watch video on a horizontal screen, but the mobile video market has gotten more crowded in the past few years as wireless provides offer unlimited data plans and smartphone screens get larger and more sophisticated. Facebook, Twitter, Snapchat and Google are among the companies that are ramping up video content to appeal to advertisers and younger viewers, but they also have had their share of difficulties. Since its rollout last August, Facebook has struggled to drive viewership on its Watch video service. A study by social video analytics company Delmondo found the average viewing time to be just 23 seconds.
Go90's end comes as telecom companies like Verizon have spent billions of dollars on content strategies to boost the value proposition of a mobile subscription, most recently culminating in AT&T's $85.4 billion acquisition of Time Warner. The strategy makes sense, especially as households cancel cable service in favor of video streaming services like Netflix. But video can be expensive to produce, which means reaching a mass audience and booking advertising spots is critical for profitability. Even without Go90, Verizon continues to invest in content, as seen with its exclusive agreements to distribute NFL and NBA games and related content through Yahoo Sports. The company also is looking to boost news and entertainment mobile content, per Variety.
In addition to sports programming, Verizon bought content from AwesomenessTV, Complex Networks, Vice Media, New Form and Endemol Shine North America. Verizon also spent heavily on technology, with the $200 million acquisition of OnCue, a former division of Intel that had developed an over-the-top video service that never rolled out. Verizon later acquired Vessel, a struggling internet-video startup and laid off most of the former OnCue team to give the former Vessel team control of Go90's development. Chip Canter, a former executive in NBCUniversal's digital distribution group, was hired in 2016 as Go90's general manager but left the company last year.
