The logic is pretty simple: As technology evolves and cell phones ultimately morph into portable home entertainment centers, subscribers (at least the younger generations) will make choices based less on nighttime minutes and text messaging charges and more on what video (and music) they can download to their "third screens."
So Sprint has a deal with the NFL, Cingular with HBO, and Verizon is offering behind-the-scenes peeks at "Pirates of the Caribbean" on its V Cast programming service. While the wireless carriers are still spending to promote differentiators like the "Fair and Flexible" plan, their content offerings are generating an increasing portion of their marketing dollars. Verizon upped spending in this year's first quarter by 46.1 percent, partly due to a heavy emphasis on pitching V Cast, according to Nielsen Monitor-Plus.
In Verizon's case, it clearly knows who its audience is. It's not Boomers who still remember when people used pay phones, but those 12- to-24-year-olds who wouldn't mind changing their ringtone every other day.
So, in order to plug its V Cast service to this tech-savvy group--no doubt an elusive target well-versed in DVRs and ad-skipping--Verizon is increasingly employing product placement and branded entertainment.
Its tactic is to integrate the V Cast programming into a show's content, then give it a more direct plug with a billboard and voiceover at a commercial break.
This spring, Verizon integrated the V Cast content it offers related to the Fox show "The O.C." into the show itself. So, a series of webisodes related to "The O.C." were touted in an episode when one character mentioned them to another--then at a commercial break, viewers were referred to V Cast for the "never-before-seen" content.
A similar ploy was put into action on the July 5 episode of MTV's new reality show "Cheyenne" (one of the top-ranked product placements of the week, according to measurement firm iTVX). The series chronicles 15-year-old Cheyenne Kimball's attempts to become a pop star.
Part of Verizon's move to lock up compelling content for V Cast includes a series of exclusive concert performances from acts such as the band Live, Gavin DeGraw and--Cheyenne.
So in the July 5 episode, Cheyenne is seen watching a clip of herself performing. "There's me, there's me," she exults. Members of her band and entourage, including her mother/manager Shannon, also go nuts.
Then Shannon, who often acts much more like a rebellious rocker than the mother of a 15-year-old (who's not really that rebellious), delivers the coup de grace. Excited about the streaming video of Cheyenne on stage, she tells the entourage, "Verizon phones rock. You all need these phones because the phones that you use suck."
The somewhat salty plug is followed up at the break with a shot of a Verizon phone and a plug for Cheyenne videos, songs, and ringtones on V Cast.
While Shannon's salty plug for Verizon phones might make some in the phone giant's C-suite cringe--perhaps anyone over 35--credit Verizon for an attempt to speak to its target audience in their vernacular. No doubt if the product placement leads to increased V Cast subscribers, there'll be a little less wincing.