Verizon Communications Inc will launch a trial version of its new mobile video service on Tuesday, aiming to prove that telecom players can compete with mobile ad industry titans Google Inc and Facebook Inc. Verizon said its service, a mobile app dubbed "go90", will be offered initially to a select set of its own customers, with advertisements from well-known brands, which it declined to name, but without newly acquired ad technology from AOL, the media company it bought in June for $4.4 billion.
Verizon is targeting young viewers or millennials with about 100 to 200 hours of exclusive content from online video networks such as AwesomenessTV and Machinima, said Brian Angiolet, Verizon's senior vice president, consumer products. The free service will drive revenue from data usage and targeted advertising.
Verizon's best chance to prove its advertising potential rests on technology from AOL, which has built tools to deliver targeted Web and mobile ads. That, combined with Verizon's customer data, should improve targeting, analysts say.
The AOL technology is in the process of being integrated with Verizon's video service, and targeted advertising tools will be available over time, Angiolet said. The service will launch officially to all users as soon as later this month, a Verizon spokesman said.
Companies from Netflix Inc to Dish Network Corp already offer Web-based video services through subscriptions, but the No 1 U.S. wireless company's ad-supported, short-form video model is unusual.
Go90 pits Verizon against Internet advertising industry heavyweights Google and Facebook, and advertisers will take a "wait and see" approach to determine how many viewers Verizon captures, telecom industry consultant Tim Farrar said.
"Pretty much without exception telecom operators have not been successful as third parties in exploiting the Internet access service, whether it's video or anything else," Farrar said. "What percentage of people's app viewing is going to be over a Verizon app versus YouTube or Facebook...That's the biggest uncertainty."
Verizon's rival AT&T Inc has said it has mobile video services targeting young viewers in the works. Smaller rivals Sprint Corp and T-Mobile US Inc have said they are watching their competitors' efforts closely.