Verizon is gambling $10 billion on building a digital media business to compete with Facebook and Google.
Verizon’s new executive vice president, Marni Walden, said to analysts earlier this year the company is trying to “create (the) Viacom of tomorrow,” reports the WSJ. Viacom is a media conglomerate with some $13 billion in revenue.
Verizon picked up Hollywood producer Craig Piligian’s reality show “The Runner.” Verizon gave Piligian the green light to produce 100 short episodes; contestants on the show race across American with the goal of not being seen by fellow contestants or viewers, reports The Wall Street Journal.
“The Runner” has garnered in excess of a million viewers, and Verizon executives have said they are pleased with the performance thus far.
Verizon’s mobile video app, go90, is off to a less than stellar start. It currently ranks 55th in the Apple App Store. Described as an app that allows users to “Stream original series, live sports and more from your favorite digital celebs, athletes and artists for FREE,” go90 grew out of market research the company conducted where focus groups allowed Verizon executives to “record them in their living rooms while interacting with content on their TVs, computers and smartphones.”
Advertising agents have criticized Verizon’s pricing for ad time on go90, saying its price listings are “too high.” Advertising experts reported the company was “seeking $10 million minimum commitments for individual marketers last year and $50 million deals for large ad-agency holding companies.” One advertising agency, Publicis Groupe, according to people familiar with the deal, has stated its ad purchase has been a “disappointment for Publicis as go90 hasn’t delivered the audience it promised.”
Although a dominant force in the wireless market, Verizon has seen profits and growth flatten. Following labor strikes and the arduous acquisition of Yahoo last month, Verizon has seen a 5 percent decrease in revenue (RELATED: Union Strikes Adds To Already Negative Quarter For Verizon)
Verizon is reportedly reaching outside “its comfort zone,” and is trying to give itself a leg up in “navigating the media world,” reports the WSJ.
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