Verizon's Go90 video service will rise or fall on its content lineup -- and almost nothing else matters

Phil Goldstein

Verizon Wireless (NYSE: VZ) is preparing the nationwide rollout of its Go90 over-the-top mobile video service to customers of all wireless carriers. The company clearly has high hopes for it and has spent years and billions of dollars to get to this point. Executives at other Tier 1 wireless operators are skeptical or dismissive of Go90. I haven't had a chance to test the service (I'm not one of the 5 million Verizon customers who have received invitations) but I'm pretty skeptical as well -- and, as a millennial born in 1987, I'm in Verizon's target demographic for Go90.

Unless Verizon can assemble and deliver a compelling lineup of video content that appeals to an audience that will continue coming back to Go90 day after day and week after week, I don't have a ton of confidence that it can succeed where other carrier-led OTT initiatives have failed. Go90 needs a large audience to deliver to advertisers, since the vast majority of the service is going to be free and monetized through advertising -- hyper-targeted programmatic advertising that needs a lot of mobile eyeballs to deliver solid results for marketers. To get that large audience and hold it, it needs addictive, absorbing and entertaining content. 

There are signs that Verizon understands all of this. The company's brand is nowhere to be found in Go90's website, which is full of purples, pinks and yellows. The message is clear: This isn't just for Verizon customers, it's for everyone.

The Go90 service does not include entire networks' roster of shows, but rather includes popular shows from Comedy Central, Food Network, ESPN, Scripps, HuffPost Live, NFL Network and Discovery, as well as popular online series from DreamWorks Animation's AwesomenessTV, Vice Media, Tastemade, Maker Studios and Machinima. Go90 will also feature National Football League games and live concerts. Verizon has contracted for hundreds of hours of exclusive content for Go90, according to Verizon Communications CEO Lowell McAdam, who said last week at a Goldman Sachs investor conference that Go90 will support both long-form content and "snackable" content of much shorter durations.  

Other carrier executives are skeptical. Here's a sampling of what they said at the same conference:

  •  "Verizon is not going to have the broadband capabilities," AT&T (NYSE: T) CFO John Stephens said, according to a Seeking Alpha transcript of his remarks. "They don't have the satellite or the scale in delivering and negotiating with content providers. So our approach is this integrated model."
  • Sprint (NYSE: S) CEO Marcelo Claure said that he applauded Verizon and said "it is a very, very brave move of a carrier trying to be and act like an over-the-top, like an OTT" and then in the next breath said "every single carrier in the world that has tried to be an OTT with much simpler service structures -- music, app stores, others -- have miserably failed, but I love the fact that Verizon is taking on, that they're innovating and they're going to try to basically appeal to millennials utilizing a video delivery. So for that that's great." Claure said Sprint is going to use its spectrum-rich network and is "partnering with different OTTs to build a video strategy," but that carriers "don't have the ability to act at the speed that's necessary to compete with the Hulu, Netflix and others that have a specific DNA."
  •  T-Mobile US (NYSE:TMUS) CEO John Legere was characteristically blunt. "I do think that this Go90 could be the biggest debacle," he said. "I mean, it's right up there with the Amazon Fire phone, the Facebook phone, you remember that one?... This is this company saying, I'm going into content. And they wouldn't know a f--ing millennial if they bumped into them on the street."

This is mostly just the carping of executives at competitors, but some skepticism is warranted. McAdam discussed how Go90 incorporates social networks by letting users share clips or parts of clips including from sporting events. He also noted how Go90 users can follow other Go90 users and see the shows that others are watching, and share and interact with "crews" or social groups within the app. Again, I haven't had a chance to test it, so I don't know exactly how it will work but it sounds like a 50-year-old designed something to appeal to a 20-year-old.

I might not be the target audience Verizon is going for with Go90. I'm 28 and have a monthly cable TV subscription. I tend to watch a lot of content on HBO, so I'm excited that some HBO programming is coming to Go90. I've watched some episodes or clips from Vice News on HBO. But I had never heard of AwesomenessTV until Verizon announced its partnership earlier this year with the YouTube video specialist, which seems more geared toward teens than people in their 20s. Verizon's ability to use LTE Broadcast technology to deliver NFL games and concerts will broaden the appeal of Go90, but it will only work for Verizon customers with LTE-Broadcast-capable phones. That will be a meaningful benefit to Verizon customers, but non-Verizon customers will only get access to non-LTE-Broadcast content, which will be the vast majority of the content. 

Having the ability to share content or pieces of content is great, but that's only worthwhile if the content is worth sharing. Verizon might have more content partners up its sleeve that will blow me away. Or maybe all of the content Go90 has assembled is already massively appealing to millennials and I'm just not hip enough to get it.

The market is littered with failed or half-baked attempts by carriers to try to be like OTT services, especially in messaging (how many people in the U.S. used joyn or RCS-based services?). Additionally, Go90 is also reminiscent in some ways of Qualcomm's (NASDAQ:QCOM) MediaFLO service, which Verizon began selling in 2007 under the V CAST Mobile TV brand. While that service was designed around linear TV channels and was subscription-based, it was geared toward the same audience with the same sort of content -- and it was a clear disaster. Qualcomm discontinued the MediaFLO business in the fall of 2010 due to lack of interest. I hope Verizon learned its lessons from that. 

The Go90 initiative will rise or fall on the strength of the video content it delivers, and almost nothing else matters. Verizon will surely spend a lot to market the service, but it will be useless to advertisers if no one tunes in. I'm looking forward to reporting back after I've had a chance to try Go90.--Phil