LAS VEGAS -- Verizon Wireless (NYSE: VZ) sent out private invitations to 5 million customers for its Go90 over-the-top mobile video service ahead of a nationwide launch later this month, according to a senior Verizon executive. Verizon had 103.7 million retail postpaid connections at the end of the second quarter, so around 5 percent of the carrier's postpaid customer base has been invited to join.
Marni Walden, EVP and president of product innovation and new business, disclosed the details during her keynote appearance at CTIA's Super Mobility conference. Verizon said earlier this week that it planned to send invitations to millennials, generally considered to be around 30 years old or younger, according to CNET, the target audience for Go90. Later this month the Go90 application, whose name refers to the act of turning a phone 90 degrees to watch video in landscape mode, will be available to customers on all wireless carriers and over Wi-Fi.
The service will start as a mobile-first product, but Verizon executives said they were thinking about creating streaming options that would work on traditional TVs as well. Walden told Reuters that Go90 needs to be successful on mobile before the company can think about branching out. "The thought is that there could be a companion product that would come at some point in the future that could be in-home" for TVs, she said.
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.
During her appearance here, Walden spoke about Go90 and also spoke to two of Verizon's partners in the OTT effort: Jeffrey Katzenberg, the CEO of DreamWorks Animation, and David Penski, chief commercial officer at VivaKi, which is part of the Publicis Groupe, a global digital advertising firm.
Walden noted that Verizon is launching Go90 into a changing video landscape, and as advertising is changing as well. Verizon is going to serve up targeted advertisements by leveraging the ad technology it acquired from AOL in a $4.4 billion deal to bolster the ad-serving capabilities of the service by accessing subscribers' location and interests.
Walden said one-third of Americans watch content on mobile devices every day. She noted that two-thirds of millennials consider mobile to be the primary way they access video content and 40 percent have never paid for traditional pay-TV service.
Katzenberg said the wireless and entrainment industries are at an "amazing inflection point that is going create a genuine revolution," akin to when TV arrived in a mainstream way in the 1950s and with the advent of cable TV.
"I believe what we will see in the next handful of years is a revolution in the types of entertainment that we are going to consume, and it's all going to be made for mobile," he said. "Mobile is going to be the platform for the next decade or two."
Katzenberg said that high-quality content will be developed specifically for mobile platforms, and that this content will be delivered in four-to-10-minute bites that users can snack on. "Because that is the way in which we, in terms of our lifestyles and how we go about our lives today… can best consume it when it's on a" mobile device, he said.
Katzenberg added that the industry needed to make "a quantum leap beyond what we know today" and that if content is delivered in such small bites it cannot be a long-form TV show that gets chopped up into smaller segments, or have linear TV content altered for mobile. It's a revolutionary thing, it's not a repurposing thing," he said.
Penski said that VivaKi is seeing a "massive" increase in mobile advertising spending, and that half of the 3 to 5 percent growth in overall ad spending the firm thinks will occur in the next few years will come from mobile.
Penski also said advertisers need to improve their commercials and ads for mobile, and that even though the ads can be targeted, that often leads advertisers to create numerous variants of ads, which often leads to poor-quality ones. "How do we make sure ads are equal in quality to the content you're watching?" he said.
Katzenberg said that advertisers can't think of mobile video ads as traditional TV commercials, but should look to integrated sponsorships. Penski said advertisers will likely be slow to adapt to that and many struggle with a sponsorship model, since they traditionally place ads on an econometric model, in which they know that serving a certain number of ads will lead to a certain amount of sales.
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