Verizon Looking to Bundle Third-Party OTT Video with 5G Rollout

Still smarting from its $1 billion write-down of the short-lived Go90 video app, including forays into original content production (“The Runner” reality TV series), Verizon is embracing high-band 5G spectrum, which claims to offer wireless network speeds 100 times faster than the current 4G spectrum.

But rather than create and market an online TV platform featuring third-party content pay-TV channels, Verizon will help market third-party over-the-top video services – similar to what Amazon Channels does.

Last month, Verizon launched 5G network coverage in 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 access to online TV platform YouTube TV.

“You should expect to see us continue to look for ways to be disruptive to the distribution model,” CFO Matthew Ellis told attendees Nov. 14 at the Morgan Stanley European Technology, Media & Telecom confab in Barcelona.

In terms of overall content, Ellis said Verizon would focus internally on the newly restructured Verizon Media Group subsidiary (formerly Oath), which features three units targeting consumers, business and media, respectively.

The latter, headed by current Oath CEO Guru Gowrappan (who replaced departing Tim Armstrong),is fixated on news, sports, entertainment and finance via Verizon subsidiaries such as Yahoo!, AOL, HuffPost, TechCrunch, Engadget, and Tumblr.

Verizon earlier this year partnered with the NBA for video content streamed, including live games, original programming, fantasy leagues and interactive experiences on Yahoo! Sports and other platforms.

The deal mirrored an earlier agreement with the NFL to stream in-market and national games, including national pre-season, regular season, playoff games, and the Super Bowl nationwide – regardless of mobile network.

“You’ll see us continue to do some things in content, but it’s going to be focused on those super channels within the [Verizon Media Group] platform as opposed to the kind of more traditional video [movies, TV shows] content,” said Ellis.


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.

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 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 “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

“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 Eyes 5G Future as Fios TV Ups Sub Losses

Verizon Jan. 23 announced it plans to roll out 5G wireless functionality in upwards of five major cities in the second half of this year – the first wireless carrier to do so.

The technology should dramatically increase streaming video speeds, with 5G download speeds up to 10 gigabits-per-second compared to one gigabit-per-second for 4G LTE. The higher speed could result in downloading a HD movie in seconds.

Verizon aims to harness 5G technology with its new Oath platform, whose content brands include Yahoo, HuffPost, AOL, Tech Crunch and Engadget, among others.

The telecom, which recently inked license deals with the NBA and NFL, added 47,000 Fios high-speed Internet customers to end the fourth quarter (ended Dec. 31, 2017) with 5.9 million subs.

“The next industrial revolution will be on Verizon’s [5G] network and will positively impact society like no technology we have seen before,” CEO Lowell McAdam boasted on the fiscal call.

Meanwhile, Verizon’s pay-TV platform, Fios video, lost 29,000 subs in the quarter, to end the year down 75,000 subs at 4.6 million.

When asked whether Verizon would follow in the footsteps of AT&T and Walt Disney seeking to acquire a media company, McAdam punted. The executive admitted Disney’s acquisition of 20th Century Fox underscores the value of scale in the market place.

McAdam said the jury is out regarding the merits of Verizon acting as an independent distributor of content compared to owning and creating content.

“I think until all of this media consolidation [AT&T/Time Warner, Disney/Fox] shakes out, you really can’t determine whether that’s a path we would be interested in,” he said. “But I can say unequivocally there is nothing going on right now without considering a large media play [involved].”

“In fact, if you look at our actions like the NBA and the NFL announcement … we think being able to monetize through advertising and being independent is a very good place to play for us right now.”

Wall Street remains on the fence regarding Verizon’s first-mover 5G strategy.

“5G is going to be a hundred times faster than your typical Internet service, so not only is it going to be faster, it’s going to have better margins and give Verizon a ton of opportunity for new customer growth,” Michelle McKinnon, analyst with Payne Capital Management, told CNBC.

Jonathan Chaplin, analyst with New Street Research, said that while 5G enables Verizon to bridge technology divides in the market, doing so comes at a major fiscal cost.

“We’ve pegged it at least at $35 billion dollars,” Chaplin said. “That’s going to [more than] absorb the gains [Verizon is] going to get in tax reform savings over the next four or five years — which I don’t think the market is anticipating.”