Commentary

Verizon's Mobile Video Service May Be The Game Changer In Your Back Pocket

It’s not hard to get excited about another over-the-top service, though they do seem to be announced just about daily, but this is turning into a well-heeled fight that should be fun to watch. Someday, there will be a shoot-out, or maybe not, if every service finds its niche.

Verizon will begin offering its over-the-top service sometime this summer or fall, aided by its new acquisition, AOL. Everybody believes Verizon was attracted to AOL mainly for its online advertising platforms and not so much for Huffington Post and some pretty well done AOL content. I'm not so sure. But it seems clear that once Verizon gets going, interesting things might happen.

Last week, Verizon signed a deal with the Scripps Networks to be able to offer channels like HGTV and the Food Network via mobile. Zacks Equity Research reports it expects to launch with 20 to 30 cable offerings, plus streaming fare from Awesomeness TV and DreamWorks TV, and 200 hours of original content.

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In addition, and perhaps most importantly, sports via deals with some big suppliers like ESPN and CBS Sports. Verizon wireless has also been playing around content it could offer from inside stadiums and has tested some of that already.

The Donohue Report, a pay site that does an especially good job mining patent applications, reports Verizon intends to offer targeted advertising to consumers who order the new service. It will serve as a discounted way to obtain both expanded data and access to programming.

In its application, Verizon says, “in return the user agrees to accept advertising and/or to an advertiser’s terms prior to gaining access.”

The application goes on to explain: “The user may also be presented with options for selecting from multiple sponsors, choosing among various Over The Top (OTT) services and their corresponding sponsors. 

"Selection of sponsors associated with network carriers may provide tie-in benefits, such as being placed on a ‘Preferred System Access List,’ or a ‘Hierarchial List of System Access.’ Alternatively, selections may be based on QoS [quality of service] considerations, where different levels of QoS may be provided based upon the amount of advertising the user is exposed to, and/or the amount of activity the user partakes. with interactive advertising content of a particular sponsor.”

Supposedly, Verizon thinks its plan doesn't violate net neutrality regulations. (But when you read about such grey phrases as  Hierarchial List of System Access, you do know you're around people who grew up in the phone business.)

Last week, as the Verizon/AOL deal was formally completed, Verizon gave some details about the service, that will be headed AOL’s CEO Tim Armstrong. For one, it will work on competing wireless networks. But only Verizon customers will see Verizon’s LTE Multicast technology during sports events, which, pardon the pun, might be a game changer.

This pay to play thing isn’t all brand new. Internet users often land at sites that make you pay by watching an ad or answering a survey. But given Verizon’s size and its apparent commitment to making a grand entrance, this optional pay in, could be especially attractive to users. Already, some leading video sites report 60% of their views come from mobile phones and that stat keeps tipping up.  

Advertisers would be advantaged by targeting mobile users who theoretically could be reached as they’re walking down the center aisle of the big sales funnel. It will be interesting.

pj@mediapost.com

1 comment about "Verizon's Mobile Video Service May Be The Game Changer In Your Back Pocket ".
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  1. Leonard Zachary from T___n__, June 29, 2015 at 1:44 p.m.

    The obvious observation is Verizon targeting the Mobile Ad Revenue pie. Question: it appears Google and Facebook are at a disadvantage by not having Strategic Control of Integerated Connectivty to the Consumer so is this the Big Game Changer for Verizon in terms of competitive advantage?

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