Here's another well-heeled pay video service coming at you.
Just as Fullscreen is now using its links to AT&T to launch its own SVOD service, announced late last month, Verizon today announced it
had acquired a 24.5% stake in AwesomenessTV and plans its own stand alone, too.
Fullscreen and AwesomenessTV, born and bred on YouTube, aim squarely at young viewers, though probably
Awesomeness grabs a younger set than Fullscreen. Both cultivated a stable of young stars that kids know (and you probably don’t), and so they’re fertile areas for mobile peddlers like
Verizon and AT&T.
Today’s Awesomeness link up with
Verizon is described as groundwork for a “first-of-its-kind premium short-form mobile video service,” though it appears the service they envision isn’t what will be there at
beginning.
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Right now, Awesomeness is already a part of Verizon’s nascent (and so far, apparently fairly buzzless) Go90 mobile-first platform, which features programming
by well-known video makers. They include Whistle Sports and Funny or Die and many others, and a good amount of content from AwesomenessTV.
“In addition to delivering compelling
scripted and nonscripted series with high production values, AwesomenessTV has demonstrated an ability to zero in on programming that Gen Z and millennials want to watch,” said Marni Walden,
executive vice president and president of product and new business Innovation, Verizon in a statement this morning, adding later, “That’s why we want to be in the AwesomenessTV
business.”
But the plan is to soon launch a separate, ad-free, pay version “on par with the highest-end content seen on television today,” according to the
companies. There will be more money and more emphasis on higher-quality productions.
DreamWorks retains 51% of AwesomenessTV, and Hearst holds the approximately 25% (they bought in
in 2014) that Verizon doesn’t.
When DreamWorks Animation bought in for $33 million (with incentives that could take it far higher than that), it was widely believed it was CEO Jeffrey
Katzenberg’s relatively foolproof way for DreamWorks to build up its own beach head on YouTube.
Though it was only a few years ago, it seems way back then, there was still a lot of
confusion and wariness about this thing called YouTube.
That was then. This partial acquisition by Verizon puts the value of AwesomenessTV at $650 million, which makes AwesomenessTV
profoundly well named. Good deal, Jeffrey!
There’s a lot of category-dubbing out there, but The Diffusion Group’s Joel Espelien is the first one I’ve seen
refer to a new group he calls “the cord barelys,” viewers who may buy into subscription services that are cheaper and much more
narrowly focused bunch of consumers.
He wrote: “The idea (from AT&T’s perspective) seems to be to create a bottom rung on the pay-TV ladder that young millennials
both want and can actually afford. Having a video customer at $5/month is a whole lot better than not having a video customer at all. The notion of a “cord-barely” offer is a good one, but
also reveals a huge economic gap between the young-and-struggling and the comfortably-affluent.
"There is a big difference between paying $5/month and $100/month for video entertainment, and
it’s neither obvious nor inevitable that today’s young adults can or will cross that chasm anytime soon. My own view is that video ARPU among this group is more likely to remain
permanently “stunted” at lower levels."
He wrote that prior to the Awesomeness TV/Verizon announcement, but the broad strokes seem to be the same.
What
is also true, though, is that figuring who's paying for SVOD is tricky business. The youngsters who may actually pay out of their pocket for Awesomeness TV or Fullscreen don’t have to choose
between either of those two instead of Netflix or Amazon. Mom and dad are paying for those.
pj@mediapost.com