Verizon has a sketchy past with their own media products:
- Verizon flopped (along with AT&T & T-Mobile) in their pursuit of a mobile payment platform of their own and ended up selling their share of SoftCard to Google.
- In 2012-2013, Verizon shut down their Vcast video service due to its limited content and idiotic restrictions.
- In 2013, Verizon shut down their own app store after they tried competing against Apple/Google.
- In 2014, Verizon shut down Redbox, their streaming media service.
- Does anyone use Verizon Messages?
But Verizon is going ahead with this new mobile internet video service. Recently Verizon CFO Fran Shammo revealed that the service would be coming later this summer and also revealed why the service will likely flop.
First, Shammo discussed the importance of advertisements being a significant revenue stream of the service. Meaning, expect a lot of ads, even if the service costs a monthly amount.
Second, Shammo also discussed the idea of having companies “sponsor data” so that customers wouldn’t have their data caps effected by the video usage. Shammo also added that sponsored data program was “very appealing to advertisers.” Sponsored Data programs benefit the wireless providers. That’s it. The content providers with the biggest wallet gain an immense advantage of companies without that same financial backing. Also, who will the content providers then pass the new charges onto? Customers.
For years, AT&T has tried pushing off their own sponsored data program and it has failed miserably to catch on. As venture capitalist Fred Wilson has stated, startups can easily be harmed in a world where giants like ESPN, Facebook and Google get to pay to have their services and content higher on the food chain.
Third, the lack of programming content will still be an uphill battle for Verizon. Much like Intel and really any video service, getting TV networks to offer their service at a price that won’t kill the service instantly has become difficult if not impossible. At the moment, Verizon has struck deals with the National Football League, DreamWorks Animation’s AwesomenessTV unit and Vice Media. Will Verizon be able to sign up significantly more programming on additional TV networks?