Verizon’s Go90 Will Be Huge

On October 1st, Verizon launched their ambitious mobile video streaming service, Go90 The free mobile app, which is available in Google Play and the App Store, will eventually feature a wide range of original and licensed content, including live sports. Go90 ‘s focus on short form original content and live sports will put Verizon, with their purchase of AOL, in a new position as media publisher and ad platform focused on Millennials.

Well, join the crowd, right? Say hello to Netflix, Hulu, YouTube and Snapchat who all have similar ambition in various forms.

But Go90 has a really good chance to separate themselves from America’s video streaming services. Verizon’s ace in the hole in this game is sponsored data. In June during a conference call with the media, Verizon Communications CFO Fran Shammo said sponsored data will be part of Go90 “down the road”.


Sponsored data is the emerging mobile data business model in which parts or all of a consumer’s mobile data usage fees are paid for by someone else, such as advertisers. Verizon Wireless could give their subscribers Go90 for free. Let me repeat that – Verizon Wireless subscribers could watch Go90 video and incur no mobile data usage fee to do it (known as zero-rating).

Zero-rated data will become an increasingly big deal. Cisco in their last VNI report estimated U.S. smartphone users, who consumed on average 1.8 GB of mobile data per month in 2014 will consume a whopping 7.8 GB of mobile data per month in 2018 (Note: Cisco’s estimates include offload to Wi-Fi, so big chunks of this data use will not be on cellular networks).

Free mobile video will get consumer’s attention, and quite a few will be happy to watch ads in exchange for eliminating the mobile data usage fee associated with the video. In addition to pleasing current Verizon Wireless subscribers, sponsored-data fueled Go90 could become a switching strategy, a very compelling reason Millennials and others will switch carriers to become Verizon Wireless subscribers. So while consumers will be able to download the Go90 app and use it on any mobile network, the free data offers will only be available to Verizon Wireless subscribers.

Go90’s success will hinge on how Verizon executes sponsored data. The cleanest and best deal for subscribers is all you can eat mobile video with no mobile data charge. That isn’t likely to happen for awhile simply because of licensing fees associated with content Verizon doesn’t produce. More likely is selected sponsored data, where some but not all content is zero-rated. The worst execution of sponsored data for Go90 would be to make sponsored content conditional, the way AT&T is going with Daily Perks . In this model the consumer has to “earn” the zero-rated data by taking a survey, signing up for a program or to make a purchase from a sponsor. That model is completely doomed.

Hopefully, Verizon will keep it clean and frictionless for consumers and stick to ad-supported content. If they do, Verizon has a significant opportunity to become a dominant media publisher. If they execute sponsored data for Go90 well, then they can push the sponsored data model out to other third party platforms, like Facebook/Instagram, Twitter, Snapchat, Amazon, Google etc., for Verizon Wireless subscribers.

For more on the outlook for sponsored data, see my market research report, here .

Google is not RCS’s White Knight

On September 30, Google appeared to have switched sides in the carrier vs. OTT war when it announced it had acquired Jibe . Jibe enables carriers to launch RCS without the long-term IMS infrastructure carriers need to deliver all-IP communications. For those who need reminding, RCS, or Rich Communications Services, was trotted out about 5 years ago by carriers as the answer to Whatsapp and other OTT messaging apps which ate text messaging’s lunch. For lots of different reasons including complex interoperability issues, the lack of native clients and public indifference to downloadable RCS apps, RCS has had little market impact. But if Google with its Android muscle were to get behind it in a major way… Is Google the knight in shining armor here to save damsel in distress RCS? Does this commitment mean Google is giving up on competing with Facebook and other players in the OTT messaging app space?

No and no. Google can’t make RCS a success, and they know it. They are in RCS to hedge their bets and nothing more. Jibe as part of Google helps Google placate their OEM and carrier Android partners, creating smoother, better linkage between RCS and the Android OS, native clients in Android smartphones and integration for those devices in carrier networks.

But the troubles that face RCS are too big for even Google to overcome, so you can bet they are still feverishly at work trying to figure out a way to succeed in the OTT messaging app space.

Why such barriers for RCS? First, RCS faces an entrenched foe in messaging apps. Consider these numbers – according to the GSMA Intelligence website , there are 3.7 billion unique mobile subscribers in the world in November 2015. Through my ongoing market research, I estimate there are 2.7 billion unique mobile subscribers using messaging apps (non-SMS) as their primary vehicle for messaging. According to multiple estimates, there are 3.3 billion smartphone users globally, which means there are only 600 million smartphone users who aren’t currently using messaging apps as their primary messaging vehicle.

Second, RCS is not easily deployed or ubiquitously available across a market. An OTT messaging app like Whatsapp is available to any smartphone user in a market as a downloadable app on Google Play, the App Store or other app stores. By contrast, consumers who want to use RCS have to belong to a RCS-enabled carrier network, have a native client or have downloaded the mobile app and hope whoever they are trying to reach has an RCS-capable network that’s interworked with theirs, that the consumer has a native RCS client or downloadable app. Android OEMs have started to become RCS friendly for native clients, but Apple to date has not. In other words, RCS is hard to do until competing carriers completely enable interoperability and solve the client side issues.

Even the industry cheerleaders for RCS, the GSM Association, see RCS success as a long slog. In their RCS white paper published in March, they predict that only 50% of smartphones shipped in 2020 will have RCS clients. Not exactly a recipe for ubiquity.

But here’s the thing – RCS is a key component of mobile operator’s migration to all-IP networks and services, which means it is eventually inevitable. Over the next 10 years mobile operators will retire circuit-switched calling and comm for IP packet-switched networks and services. Your voice calling and messaging will be through apps, with the kind of capabilities we can get today in Skype, Whatsapp, WeChat, Facebook Messenger, etc.

So don’t expect Google’s increased commitment to RCS to unleash RCS consumer adoption over the next few years, it’s more of a long term commitment to IP communications.

Snapchat: Millennial Media & Marketing Juggernaut

In 2015, person to person communications has completed it’s swing from real-time voice conversations to time-shifted, mobile message-based conversations. The increasingly dominant vehicles for these conversations are messaging apps. This is a trend, not a fad.

Meanwhile, marketers are facing a reality in which consumers seeking relevant, nuanced interaction with businesses increasingly refuse to accept the value proposition of legacy advertising.

These two behaviors make the reach, scale, personalization and engagement of messaging apps the ideal platform for new era marketing strategies.

Consumers spend so much time engaged with messaging apps it makes sense that media publishers are seeking to distribute content through them.

But to succeed in engaging Millennials and Post-Millennials, media publishers will have to change what they publish and how they deliver it. As messaging app platforms are starting to prove, these generations are responding to curated, bespoke media delivered in short form video.

Hands-down the pioneer of curated, bespoke short form video media for Millennials is Snapchat Not only are they creating the right kinds of media, but they are also delivering the right kinds of marketing and advertising for their audience. Lessons abound!

Fledgling Media Publisher

Live Stories are short-form, real time crowd sourced documentaries made daily by Snapchat’s 100 million daily users. Snapchat users send videos and images to Snapchat in the hopes of being included. The stories range from “a day in the life” city stories to behind the scenes narratives from music festivals and sports events.


Snapchat Live Stories      

Live Stories are becoming media of choice. Time Magazine reports that some of the more popular stories are being seen by more than 20 million viewers in a 24 hour period . Each story contains 2-3 full-screen video ads between the snaps.

So they are off to a great start as a media publisher. As a media channel, Snapchat again keeps audience in mind.

In late January 2015, Snapchat launched their Discover media channel. Snapchat invited only a small number of publishers — CNN, People magazine, Buzzfeed and a few others – to produce bespoke, short form, vertically shot videos. Snapchat believes young viewers rarely watch TV, and that carefully curated, short form video content suits Snapchat’s demographics. In addition, Snapchat is being proactive in their curation, using data to decide what media publishers to keep.

To further tailor content, Snapchat encourages its media partners to shoot vertical video. Vertical is a more natural way to view video on a smartphone. Snapchat says the vertical videos get nine times more views than horizontally shot videos. Production studio Tastemade even built a set for their facility specifically designed for shooting vertical video for Snapchat Discover.

Snapchat videos are generating 4 billion views per day , which is nearly equal to Facebook video volume. Buzzfeed told Recode September 16 that 21% of their content views come from Snapchat , which is remarkable since Buzzfeed has only been on Snapchat since late July.

Sponsored Geofilters

Again showing how they have re-thought marketing strategies for better engagement, Snapchat introduced a feature called Sponsored Geofilters. Sponsored Geofilters enable consumers to doodle or place stickers or video features on a Snap, but only in designated locations. Nike used sponsored Geofilters around the Women’s World Cup, and Target recently ran a campaign at 1,800 locations to allow Snapchatters to shoot short videos and add images of Darth Vader and other Star Wars heroes as a way to promote new Star Wars toys. The creative, exclusive self-publishing nature of the feature is a great way for brands to engage and develop longer-term relationships with consumers.


Snapchat Sponsored Geofilters

Given the valuation discussions that have swirled around Snapchat, I for one believe they have the potential to reach significant monetization goals and will open the doors for other messaging apps to follow suit as successful advertising vehicles, media publishers and channels.