How Verizon Could Fix Its Streaming Video Strategy After Shutting Down Go90
Verizon (NYSE:VZ), the largest U.S. wireless carrier, will be pulling the plug on its three-year-old streaming video service Go90 by the end of July. The mobile-focused service, which was available across mobile platforms and carriers, failed to live up to expectations amid low viewership rates and relatively lackluster original video programming that didn’t resonate with its target audience of millennial viewers. While the discontinuation of the app marks a setback for Verizon, which apparently invested about $1.2 billion in its development, the company is unlikely to retreat from the streaming video market considering its growth potential. Below we take a look at why the service failed to catch on, and what Verizon could do to fix its video strategy.
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Go90 was somewhat oddly positioned in the streaming video market, having to compete with well-entrenched providers such as YouTube and Facebook, which count as the de facto destinations for casual online video content, as well as more premium streaming content that is offered at a lower price point than pay TV. The streaming video content provided by Verizon’s rivals has also been improving. For instance, AT&T is including a new offering called Watch TV with its unlimited plans, providing live and on-demand programming with over 30 channels, while Sprint and T-Mobile have been bundling Hulu and Netflix with some of their unlimited plans. This likely posed a challenge to Go90, which had an eclectic mix of content. Moreover, the carrier had a dual strategy of operating both Go90 as well as other distribution channels that come under its Oath division, which holds its merged Yahoo and AOL assets, and it is also possible that this lack of focus hurt the uptake of the service.
Verizon will now fold Go90’s operations into its Oath unit, with some of the content from the app being redistributed among Oath’s properties. Verizon has also indicated that it will now focus on areas including sports, finance, news, and entertainment. The new strategy could also have a greater emphasis on live sports, as the carrier has exclusive agreements with the NBA and NFL for games and content. As Verizon has built a reasonably strong foundation on the technology side via acquisitions in both the streaming video and ad technology space, more targeted content could help the company address its previous shortfalls.
