Pluto TV, Verizon Ink AVOD Streaming Deal

ViacomCBS’s ad-supported VOD service Pluto TV continues its aggressive distribution strategy with a reported deal with Verizon encompassing both mobile and pay-TV.

Verizon, which has struggled to create a proprietary over-the-top video strategy, would use Pluto TV as a entry point into the AVOD market, which includes Fox-owned Tubi, Crackle, Shout! Factory TV, The Roku Channel, Xumo and IMDb TV, among others.

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Verizon, which has 116 million wireless customers and 10 million combined FiOS TV and FiOS Internet subscribers, failed spectacularly with the short-lived go90 mobile streaming video service that resulted in a $1 billion loss for the telecom.

For Pluto TV, which ViacomCBS acquired last year for $340 million, the Verizon deal mirrors other recent deals with TiVo and AMC Networks. Pluto claims more than 20 million monthly active users, 170 content partners for largely catalog programming and more than 30 distribution partners, including Roku, Apple TV, Amazon Fire TV, Comcast’s Xfinity and Xbox 360.

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Verizon Reorganizes Internally; Focus on 5G, Not OTT Video Content

With more than 150 million subscribers, Verizon is the largest wireless telecommunications operator in the United States. It also does not have a proprietary over-the-top video platform – despite spending more than $1 billion on the short-lived Go90 app, which included some original content.

New CEO Hans Vestberg Nov. 5 announced an internal management restructure that focuses on the consumer, business and media (including Oath) – apparently in that order.

“We’re building on our network transformation efforts … to deliver new customer experiences and optimize the growth opportunities we see as leaders in the 5G era,” Vestberg said in a statement. “We’re focused on how our technology can benefit customers’ lives and society at large.”

Verizon says its media group “sits at the intersection of media, advertising and technology,” with the goal of helping people access and receive media, entertainment, gaming, news, commerce and other services.

It will continue to be led by Guru Gowrappan, who was previously announced as Oath CEO. Former boss Tim Armstrong departed the subsidiary – which includes Yahoo, AOL, HuffPost, BrightRoll, and EdgeCast, among others – earlier this year, reportedly over disagreements with Vestberg regarding his decision to focus on technology rather than video content.

Indeed, last month Verizon launched 5G network coverage in four cities: Los Angeles, Houston, Indianapolis and Sacramento, Calif. Rollout included the choice of a free Apple TV with 4K functionality or Google Chromecast device, and 90-days of access to online TV platform YouTube TV.

“The world’s first commercial 5G service is here,” Ronan Dunne, president of Verizon Wireless, said on Oct. 1. Dunne will now also oversee the consumer segment, focusing on wireless and wireline business segments, including wireless wholesale.

The focus on technology over content echoed former CEO Lowell McAdam’s comments on a fiscal call earlier this year.

“We are not going to be owning content,” McAdam said on the Q2 call. “We’re not going to compete with content. We’re going to be the best partner for the content distribution business.”

Those statements were followed up in May when McAdam told Yahoo Finance Verizon was scuttling plans to launch an OTT video service.

“Our view is that we should partner with those that are in the linear game,” McAdam said. “Let them be very good at what they do. We’ll add digital content into that mix, and we’ll position ourselves for where we become more of an over-the-top video culture versus the linear model that we have today.”

Verizon Loses 151K Fios Video Subs, Puts Focus on 5G

Verizon Oct. 23 revealed it lost 151,000 Fios video subscribers in third-quarter (ended Sept. 30), impacted by ongoing consumer shifts away from traditional linear pay-TV offerings. The telecom ended the period with 4.49 million Fios video subs compared to 4.64 million subs in the previous-year period.

Net video sub losses totaled 63,000 compared to 18,000 last year. Year-to-date net losses have reached 122,000 compared to 46,000 during the previous-year period. Broadband connections remained relatively flat at 6.95 million compared to 6.97 million.

More importantly, the wired segment (Fios video and broadband) reported an operating loss of $50 million on revenue of $7.4 billion, compared to operating income of $65 million and revenue of $7.7 billion last year.

To new CEO Hans Vestberg, the video sub/operating income losses apparently don’t warrant mention as the telecom rolls out what it claims is the world’s first 5G wireless commercial network.

“With the beginning of the 5G era in this fourth quarter … we are investing in networks, creating platforms to add value for customers and maintaining a focused, disciplined strategy,” Vestberg said in a statement. “Verizon is best positioned to take full advantage of the opportunities offered by the new game-changing generation of technology.”

Indeed, Verizon ended the period with more than 112 million wireless connections (mobile phones, tablets and related devices), up 2.2% from 109.6 million connections last year. The company added 295,000 mobile phone connections.

Separately, Verizon said it does not expect to meet the previous announced target of $10 billion in Oath revenue by 2020. The media entertainment unit, which includes AOL, Yahoo, Verizon digital media services and related brands such as TechCrunch, Engadget and HuffPost, reported quarterly revenue of $1.8 billion – down nearly 7% from last year.

Tim Armstrong, the former AOL CEO who headed Oath since its inception, exited the unit in September and was replaced by K. Guru Gowrappan, effective Oct. 1.

Finally, go90, Verizon’s short-lived video entertainment app targeting younger mobile users, ceased operations in quarter after generating about $1 billion in losses.

NBC Universal Launches User-Incentivized OTT Video Streaming Service

As expected, NBC Universal has launched an over-the-top video streaming service that rewards users for watching content.

Dubbed “WatchBack,” the marketing app targets mobile phone users with free access to new-release TV shows and related social media topics.

To stream content, users must register and generate a profile on the app. After watching entire episodes of NBC-related (i.e. NBC, Fandango, Bravo, E!, Access Hollywood, and CNBC, among others) content, users are automatically entered in a sweepstakes to win $100.

“The long-term goal of WatchBack is to make it just a little easier for consumers to try out new programs for the first time and create fans for us and our partners,” Andrew Hanna, VP of insights and strategy at NBC Universal The Hollywood Reporter.

The app mirrors Verizon’s short-lived go90 streaming app that attempted to meld younger mobile consumers with target original content. Go90 lasted less than three years, generated about $1 billion in losses for Verizon, and left a stain on former chairman/CEO Lowell McAdam’s legacy.

 

 

Oath CEO Tim Armstrong Reportedly Departing Verizon, Among Other Executive Exits

Verizon’s digital media unit Oath appears to be in a state of change with CEO Tim Armstrong and other executives reportedly planning to leave the company.

Media reports – citing inside sources – said Armstrong’s exit would follow on the heels of Bob Toohey’s recent departure as chief people officer. Other executives said to be leaving include CFO Vanessa Wittman and Natalie Ravitz, chief communications officer.

Oath was founded in 2017 following Verizon’s acquisitions of AOL and Yahoo. Digital media brands folded into Oath include TechCrunch, Engadget, Edgecast and HuffPost, among others.

Armstrong, who headed AOL from 2009 until its purchase by Verizon, has been tasked in part to help the telecom establish an over-the-top video presence.

Indeed, after Verizon spent nearly $1 billion launching Go90, an ad-supported mobile app targeting the 18-34-year-old demo, Oath took over the app after it failed to gain traction. It was scuttled shortly thereafter.

Go90 remains a stain on former Verizon CEO Lowell McAdam, who stepped down in August.

Verizon reportedly declined to comment on the scuttlebutt.

Verizon Go90 Shutdown Cost: $1 Billion

NEWS ANALYSIS — Verizon’s short-lived attempt at over-the-top video targeting millennials on wireless devices has a price tag: $997 million.

The telecom July 24 revealed the pre-tax charges in second-quarter (ended June 30) fiscal results, which include $339 million in severance charges.

The oddly named ad-supported mobile-centric video app launched in 2015 with much fanfare and hundreds of millions of dollars invested.

One of the app’s first (and expensive) series was a reality-competition show produced by Ben Affleck and Matt Damon, dubbed “The Runner” – which had the misfortune of bowing at the same time of the global Pokémon Go craze.

Go90 did score a creative hit with Kobe Bryant’s Oscar-winning short film Dear Basketball.

The end of Go90 underscores Verizon’s (and exiting CEO Lowell McAdam) failure to create a standalone streaming video platform capable of competing against Netflix, Amazon Prime Video, Hulu — or even OTT video.

Earlier this year, the telecom folded Go90 into its Oath platform, which includes ’90s relics AOL and Yahoo, in addition to HuffPost, Engadget, Tumblr and TechCrunch.

Indeed, Verizon reported acquisition and integration-related charges of $120 million, primarily related to Oath in Q2.

Separately, Verizon disclosed it lost 37,000 net Fios Video subscribers in Q2, citing ongoing consumer cord-cutting of pay-TV service for competing over-the-top video platforms not named Go90.

The telecom lost 15,000 net Fios Video subs during the previous-year period. Through the first half of the year, Fios Video shed 59,000 net subs compared to 28,000 subs last year.

In total subscribers, however, Fios Video ended Q2 with 4.56 million subs – down 106,000 subs from 4.666 subs last year.

Reflective of consumer adoption of OTT video, Verizon said Fios broadband added 43,000 net subs, down 12.2% from 49,000 broadband sub additions last year. Through the first six months, broadband subs increased nearly 30% (109,000) from 84,000 last year.

Verizon ended the period with 5.959 million broadband connections, up nearly 4% from 5.737 million connections last year.

Perhaps sensing his unexercised stock options, McAdam – who regularly skipped fiscal calls in favor of kowtowing investor events – said Verizon is “extremely well-positioned” for the future.

“Our financial and operating results for the first half of 2018 were strong, as evidenced by service revenue, earnings and operating cash flow growth delivered in a highly competitive marketplace,” he said.

McAdam conveniently ignored Go90’s after-tax impact of about $900 million, or 20 cents per share.

Verizon Officially Pulling Plug on Go90 Streaming App

As expected, Verizon is reportedly calling it quits on Go90, the oddly named ad-supported mobile-centric streaming video app launched in 2015 with much fanfare and hundreds of millions of dollars to the Millennial market.

“Following the creation of Oath [which includes Yahoo and AOL], Go90 will be discontinued,” Verizon said in a statement first reported by Digiday.com. “Verizon will focus on building its digital-first brands at scale in sports, finance, news and entertainment for today’s mobile consumers and tomorrow’s 5G applications.”

Tim Armstrong, CEO of Oath, earlier this year alluded to Go90’s pending demise at the Recode tech confab in Southern California.

The end of Go90 underscores Verizon’s (and exiting CEO Lowell McAdam) failure to create a standalone streaming video platform capable of competing against Netflix, Amazon Prime Video, Hulu – or online TV.

While Verizon still has exclusive mobile streaming access to the Super Bowl, the nation’s largest wireless telecom with more than 150 million subscribers continues to struggle in OTT video.

In 2014, the company – along with Redbox – shuttered Redbox Instant, an ambitious platform aimed at melding disc rental with streaming video.

With both companies unwilling or unable to enter the content arms race against Netflix & Co., Verizon – backed by a dedicated staff of Go90 employees – reportedly spent more than $200 million on original short-form content for the platform.

One of the service’s first big series was a reality-competition show produced by Ben Affleck and Matt Damon, dubbed “The Runner”.

The series offered a $1 million prize to one contestant capable crossing the country unnoticed over a 30-day period while eluding eight two-person chase teams following clues.

The show had the misfortune of launching just as the Pokémon Go augmented reality game was becoming a summer cultural phenomenon among smartphones’ biggest target market: teens and Millennials.

Go90 did score a creative hit with Kobe Bryant’s Oscar-winning short film, Dear Basketball. Less so, apparently, with targeted audiences.

 

 

Verizon, Samsung Ink Content Distribution Pact

Verizon and Samsung have signed an agreement enabling original content from the telecom’s Oath subsidiary to be distributed on mobile devices.

Under terms of the deal, Samsung will embed apps from Yahoo Sports, Yahoo Finance, Oath Newsroom and Go90 on Samsung Galaxy S9 and S9+ smart phones.

Oath becomes Samsung’s premiere content partner on the consumer electronics manufacturer’s updated personal assistant software – Bixby Home in the U.S., with plans to expand worldwide later this year. Oath’s top mobile apps and native ads will now be distributed across eligible Samsung devices with Bixby.

The agreement is breakthrough for the nine-month-old Oath platform, which arose following the merging of Yahoo, AOL, HuffPost, EdgeCast and BrightRoll brands.

“The amount of content consumption on phones is continuing to skyrocket,” Tim Armstrong, CEO of Oath, told Reuters. Samsung and Oath will share ad revenue under the deal.

Indeed, video consumption on mobile phones is projected to top 196 million users by 2020, according to eMarketer.com.

“Our advertiser and publisher partners will benefit from increased mobile visibility,” Dave Bottoms, VP, product management and John DeVine, chief revenue officer at Oath, wrote in a May 1 blog post announcing the deal.

Not disclosed in the deal is the fact Oath in April reportedly updated user privacy policies, enabling it to mine AOL, Yahoo emails to better direct third-party advertisers to consumers. The company does allow users to opt out of ad targeting.

 

 

Verizon Loses 22,000 Video Subs in First Quarter

Verizon Communications April 24 announced it lost 22,000 video subscribers in the first quarter, ended March 31. It lost 13,000 video subs in the previous-year period. The telecom said the losses were “indicative” of the continued cord-cutting trend regarding traditional linear pay-TV bundles.

Verizon shed 84,000 Fios TV subs over the past year. It ended the period with 4.59 million subs compared to 4.68 subs last year.

Meanwhile, Verizon added 66,000 high-speed Internet customers in the quarter, ending the period with more than 5.9 million subs. That 228,000 more broadband subs than a year ago.

In Verizon’s media business, Oath, gross revenue decreased about 13% from fourth-quarter 2017, to $1.9 billion, which the telecom attributed to seasonally lower display advertising performance.

In February, Verizon melded its struggling mobile streaming video app, Go90, into Oath, which also includes AOL, HuffPost, Engadget, TechCrunch, Tumblr and Yahoo.

Oath represents Verizon’s mobile-first media strategy targeting global audiences and future growth from premium content distribution and “programmatic advertising” opportunities.

“We began 2018 with strong momentum, and we expect it to continue throughout the year,” CEO Lowell McAdam said in a statement. “We are positioning Verizon for long-term growth while executing our strategy today and leading the way for the next cycle of growth for the industry.”

Verizon Melding Go90 Streaming Video Service Into Oath Platform

Verizon’s struggling mobile streaming video service, Go90, is being folded into the telecom’s Oath platform, which includes AOL, HuffPost, Engadget, TechCrunch, Tumblr and Yahoo, Tim Armstrong, CEO of Oath, told a technology group.

Speaking Feb. 13 at Recode’s Code Media confab in Huntington Beach, Calif., Armstrong admitted rollout of ad-supported Go90 had its share of challenges.

“We had two separate strategies, now it will be one strategy,” Armstrong said.

Launched in 2015 with much fanfare, Go90 offered select TV shows, movies, video clips and related media, including a reality TV series from Ben Affleck and Matt Damon.

The platform targeted millennial demographic, in addition to Gen. Z and gamers with mobile content that would not count against monthly data caps.

But challenges quickly surfaced as the platform struggled to gain traction in a market filled with myriad social media options, in addition to Netflix, Amazon Prime Video and Hulu.

Verizon CEO Lowell McAdam in 2016 admitted to obstacles with the service, including taking blame for over-hyping Go90 in the media and on Wall Street.

The platform reportedly laid off 155 staffers in January 2017, including GM Chip Canter, consolidating operations under Vessel, a separate platform founded by former Hulu CEO Jason Kilar.

“Go90 was a super ambitious project, which was essentially trying to start an Internet mobile video service from scratch,” Armstrong said. “The [Go90] brand will remain [for] I don’t know how long.”