Verizon (NYSE: VZ) said it will team with Hearst on a joint venture to develop mobile video aimed at millennials that will be distributed across its Go90 and AOL properties as well as through third-party networks.
The 50-50 venture will be dubbed Verizon Hearst Media Partners, and both companies are investing capital. It will initially launch with two multiplatform channels: RatedRed.com, which will target "millennials from the heartland" with news, documentaries and lifestyle content; and Seriously.TV, which will feature humorous news updates throughout the day.
Both channels are expected to launch ahead of NewFronts, a 10-day series of events for advertisers and media buyers slated to kick off in New York May 2. The joint venture will be based in New York, and Verizon will handle the ad sales and ad technology.
The move is the latest effort by Verizon to leverage its own media properties and expand its mobile video offerings beyond its wireless subscriber base. Hearst is also a partner in Verizon's FreeBee Data 360 program, which enables content providers to pay the data costs of transmitting their offerings to users on the carrier's wireless network.
"Verizon Hearst Media Partners represents the next step in the development of our media strategy, which is focused on disruption that is occurring in digital media, content distribution and ad tech, and involves building a video platform for digitization, formatting, delivery and commerce," said Brian Angiolet, Verizon's senior vice president of consumer product and marketing, in a prepared statement. "On the heels of our acquisition of AOL and the launch of Go90, developing a portfolio of content enables us to capitalize on the forces transforming the mobile ecosystem."
Verizon's announcement comes just one day after AT&T (NYSE:T) unveiled an ambitious cross-platform video service for smartphones, tablets, PCs and other connected devices. The three-tiered offering will carry the DirecTV brand and launch in the fourth quarter of 2016.
Carriers have historically failed to monetize mobile video offerings beyond simply charging for data consumption, but both Verizon and AT&T hope increased uptake of mobile video and larger mobile marketing budgets provide opportunities to create new revenue streams. Indeed, Verizon CFO Fran Shammo this week said the combination of mobile video and the carrier's database of consumer information enables marketers to precisely target their ads to on-the-go viewers. Whether Verizon can differentiate its video services through original, made-for-mobile content is far from clear, however.
- see this Verizon press release
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