Crackle, the streaming service owned by Chicken Soup for the Soul Entertainment, is getting a surprising boost from In the Vault, a series that was originally created for go90, the video service shut down by Verizon in 2018

Season one of In the Vault premiered on Crackle on June 1 and has accumulated more than 3.4 million views, making it one of the most-watched new shows on the service. Produced by Complex Networks, it hasn’t appeared anywhere since debuting on go90 in 2017,

Crackle plans to stream season two of In the Vault by the end of the year. Season two was produced in 2019 before the pandemic, but has never aired.

Also: Crackle Launches New App for Roku Streaming Devices

The success of In the Vault on Crackle is reminiscent of the performance of shows created for the short-lived short-form subscription streaming service Quibi that have been appearing as Roku originals on the Roku channel. The series are among the most viewed shows on The Roku Channel, according to Roku.

“We are so excited to see our audience responding to the fun nail-biting edge-of-your-seat thrill-fest that is In the Vault,” said Jeff Meier, head of programming for Crackle Plus. “We thought this series would be a big hit, but the strong word of mouth and social buzz our fans are giving it exceeds even our wildest expectations.” 

Season one of In the Vault is an eight-episode thriller about co-ed who is killed at a party on a college campus. It focuses on the murdered student’s dormmates, each of whom has secrets that could make them a suspect. 

The show stars Audrey Whitby, Claudia Lee, Anthony Granaderos and Sydney Sweeney. 

Season two returns to the college with a new set of students digging into the mystery.

Verizon launched go90 in 2015 as a free, ad-supported service, but it never caught on with viewers. Go90 had content deals with Awesomeness TV, Vice Media, Complex Networks, New Form and Endemol Shine North America. Verizon hung up on go90 on July 31, 2018. ■

Verizon has a long, tortured history with video. 

How else can you describe a twisting, disjointed 15-year journey, in which the company spent billions laying out fiber and launching a highly sought-after IPTV-based pay TV service, Fios TV, only to abandon it when shareholders lost their nerve amid the Great Recession?

What other words can you use for the billions more the No. 1 U.S. wireless company spent buying companies, technology and content for the very first mobile-first video platform, Go90, only to watch consumers reject it outright?

These days, Verizon’s video strategy has been diminished to marketing third-party streaming platforms including Disney Plus and YouTube TV. How’d Verizon get from there to here?

In the Beginning…

Verizon was borne out of the 2000 merger of Bell Atlantic and GTE, its name a portmanteau of veritas (Latin for "truth") and horizon. 

In 2005, Verizon announced the launch of Fios (a contraction for "fiberoptic service"), a bundled internet, TV and phone offering based on a hugely ambitious plan to beat the cable industry with a $23 billion fiberoptic rollout. 

Launching in Keller, Texas, and nationally promoted with an expensive TV ad campaign featuring action-movie director Michael Bay, Fios debuted with the tagline, “This is Fios. This is big.” 

The Verizon Fios triple-play featured an innovative IPTV-based pay TV service—which would soon be parroted by competitor AT&T and its U-verse platform. Fios TV and its state-of-the-art user interface caught the imagination of key consumer markets, notably New York, where users eagerly anticipated an alternative to the James Dolan-led Cablevision. 

“Fios was greatly anticipated when it first launched, to the point where there were protests where people wanted to try and get Fios into their towns. It was noticeably faster and the TV interface was [better than] everyone else,” said Alan Wolk, co-founder and lead analyst for TV[R]EV.

But the will to keep growing the Fios footprint was gone, culminating in Verizon’s deal to sell a huge chunk of its Fios system to Frontier Communications for $10.5  billion in 2016.  

That deal didn’t work out so well for Frontier. For weeks after the deal was closed in April 2016, the switchover from Verizon’s network to Frontier’s was riddled with outages and increasingly poor service. Frontier later blamed the spotty transition partly on insufficient customer data supplied by Verizon. Frontier filed for bankruptcy protection in April 2020 -- it emerged in April 2021 -- and said it plans to spend about $1.4 billion on expanding its fiber network through 2024.  

Fios TV has been in an accelerating decline for several years, losing about 62,000 video customers in Q2 2021 (144,000 customers in the first half of the year) and  finishing the period with about 3.7 million customers. Since Q2 2016, not including the Frontier deal, Fios TV has lost about 1 million subscribers. 

At the same time, its Fios internet service has gained ground, adding 194,000 high-speed data customers in the first half of 2021, to finish the period with 6.4 million customers. The company has said its trailing 12-month total Fios Internet net additions of 440,000 are its best performance since 2015.  

GoFish

The ebbing of Verizon Fios coincided with another ambitious launch—the highly promoted debut of Go90, Verizon’s pre-Quibi attempt to create a video service aimed at mobile phones. 

Named after the mobile viewing behavior of tilting a smart phone from vertical (profile) to horizontal (landscape) modes, Go90 was launched with huge fanfare by Verizon in 2015, billed as a can’t-miss opportunity for the No. 1 U.S. wireless carrier to justify its $4.4 billion purchase of AOL and its copious advanced advertising assets. 

Actually, AOL was among a number of purchases that culminated in the creation of a Verizon operating unit called Oath Brands, which was headed by former AOL chief Tim Armstrong, and ran Go90 into the place many Armstrong business went … into the ground. 

Earlier, in 2014, there was a $200 million acquisition of Intel’s OnCue video tech assets There was the $4.83 billion purchase of online media company Yahoo, and the purchase for an undisclosed sum of Vessel, the online video company founded by former Hulu CEO Jason Kilar. 

Amid anemic audience numbers, Verizon Go90 was discontinued in 2018. Various reports have priced Verizon’s Go90 bath at around $1.2 billion, but who really knows how much higher it goes. Notably, Verizon wrote down its Oath media unit to the tune of $4.6 billion in 2018. 

Also Read: Verizon Set to Double 5G Millimeter Wave Deployments to 60 Cities

At that time, former Ericsson executive Hans Vestberg took over for Lowell McAdam as Verizon CEO, ushering in new priorities (namely 5G) and deemphasizing Verizon’s role as a first-party bundler of video entertainment services. 

'Winning' Without Content

Under Vestberg, Verizon has pulled back from content acquisition and is instead focused on partnerships, such as the agreement with the Walt Disney Company to offer a year of free Disney Plus service to Verizon unlimited wireless customers, as well as Verizon’s Fios fiber internet and 5G fixed wireless subscribers. 

The Disney agreement is similar to one struck by Verizon earlier last year with Google, enabling Verizon to bundle virtual MVPD service YouTube TV along with Fios, fixed 5G and other services. 

On a January earnings call, Vestberg called these partnerships a “win-win” and the strategy “we want to have going forward.”

Verizon hasn’t revealed how much money it’s spent underwriting Disney Plus subscriptions, but the deal appears to have sparked subscriber growth. Verizon added 790,000 unlimited wireless customers in Q4, its biggest increase in six years.

In Q2 2021 Verizon added about 275,000 postpaid wireless phone customers, ending the period with 90.5 million subscribers. 

Verizon further emphasized its commitment to wireless telephony, agreeing to purchase prepaid phone giant Tracfone for $6.25 billion in September 2020. That deal is still being scrutinized by the Federal Communications Commission.  

In November, Verizon got into the OTT device game, quietly launching a new set-top box called Verizon Stream TV, targeted to its fixed 5G customers. 

The device is powered by Google’s Chromecast OTT software interface, with Android TV elements included too, and it features “nearly unlimited” cloud DVR storage space, according to Verizon. Verizon Stream, which retails for $70 and has been given away to Verizon 5G Home customers, also has access to Google Assistant and its voice-control feature.

In addition to providing a platform for its Disney Plus and YouTube TV integrations, Verizon Stream has access to Google Play, so users can download YouTube or pretty much whatever third-party streaming app they want … save for the biggest OTT app of all, Netflix. Indeed, Verizon Stream launched without support for the No. 1 streaming service in the world, causing the tech press to largely scratch its collective head, given the surfeit of OTT device competition that includes Roku, Amazon Fire TV and Apple TV, just to name a few players. 

Also Read: Verizon Declares Disruption on Cable with 'Mix & Match' Model

In January 2020, Verizon announced a new way in which it bundles its wireline Fios services, allowing customers to choose internet, TV and landline phone services a la carte, and ostensibly eliminating hidden fees and contracts in the process.

The so-called “Mix & Match” model lets consumers pick from three internet speeds: 100 Mbps for $40 a month; 300 Mbps for $60; and 1 Gbps for $80. No contracts are required. 

For video, customers can subscribe to Verizon’s virtual pay TV partner, YouTube TV, and get a month free of the $50-a-month service. 

Or they can choose Fios TV--Verizon is now offering a “test drive’ of its full 425+ channel bundle, allowing customers to pay $50 a month for two months, plus $12 a month per set-top. Once that two-month trial is over, Verizon said it will “recommend” what video package its customers should settle into permanently. 

One option is the “Your Fios TV” bundle, which includes around 125 channels for $50 a month (plus $12 per month per set-top). Subscribers, however, can choose the five cable networks they absolutely have to have. Local access to major broadcast networks are included in all bundles. 

For $70 a month, customers can get the “More Fios TV” bundle, which features around 300 channels, including regional sports networks, and waives the $12 charge for the first set-top. 

The Full Monty is the $90-a-month “The Most Fios TV” package, which is includes more than 425 channels, one set-top gratis and a $12 DVR service credit. 

“Customers have been loud and clear about their frustrations with cable, and we’ve listened. As a result, we’re transforming our approach to Internet and TV offers by giving customers more choices and more transparency,” says Frank Boulben, senior VP of consumer marketing and products at Verizon, in a statement.

Mix and Match received notable praise from one consumer group. “Finally, a major cable company has gotten the message,” said Jonathan Schwantes, senior policy counsel for Consumer Reports, seemingly unaware that Verizon is not a cable company.

Chip Canter, the former GM of Verizon’s ad-based go90 service, has been named global chief revenue officer of Massive Interactive, a U.K.-based maker of user experience products.

Canter, also a former NBCUniversal exec, most recently was GM of Verizon’s Digital Entertainment business.

At Massive, he will lead the company’s global sales, business development and marketing growth strategy, and will play a major role in Massive’s U.S. expansion plans. Canter will be based out of Massive’s New York Office.

Massive’s customers include AT&T, BBC, SKY, Telecine, YouView, Foxtel, Channel 5 UK, Bell Media, Sony Pictures Television, DAZN, Deutsche Telekom, Telstra, and Freeview.

“Few people understand our market landscape and technology environment like Chip does. He has dealt with the pressures faced by OTT businesses and has first-hand experience working with global media companies,” Massive CEO Ron Downey said, in a statement. “Chip joins us at a time of great growth and change and there’s no doubt he will prove to be a valuable asset in helping Massive double down on its recent success.”

go90, Verizon’s free, ad-based OTT, said it has scored a multi-year deal to be the exclusive streaming partner for the National Women's Soccer League (NWSL) in the U.S. for all games save for the league’s Game of the Week on Lifetime.

go90 said it will feature 98 NWSL games live and via on-demand for the 2017 season, offering them at go90.com or the service’s iOS and Android apps. Viewers with go90 version 3.0 or later can also cast the games to TVs in tandem with Apple AirPlay and the Google Chromecast streaming adapter.

The NWSL matches streamed on go90 will be produced by Vista WorldLink in HD and feature halftime shows and pre- and post-game shows. In addition to the NWSL Game of the Week carried by Lifetime (via its network, Web site and mobile apps), Michael Cohen, a veteran broadcaster of nine Olympic Games and three FIFA World Cups, will serve as the league’s executive producer for all digital broadcasts on go90, which will kick off its coverage with four games during the league’s opening weekend (April 15-16).

Outside the U.S., NWSL games are offered at NWSLsoccer.com and the NWSL iOS app.

go90, which is coming of a relaunch of its underlying platform but has not released usage metrics, said it has rights to stream more than 1,000 live soccer matches each year.

“We are pleased to team up with NWSL and bring 98 live women’s soccer matches to fans in the U.S. on go90 and across our owned and operated AOL and, soon enough, Yahoo properties.  This complements our existing commitment to soccer on go90,” said Chip Canter, GM of Verizon Digital Entertainment, in a statement.

Rooster Teeth, a digital content specialist that recently took a bigger bit into the world of SVOD, is diving deeper into the free, ad-based world of OTT with an exclusive series for Verizon’s go90 service.

What Do You Know?, a series billed as a “comedic roundtable” hosted by Rooster Teeth co-founder and personality Joel Heyman, is slated to premiere exclusively on go90 on Jan. 30.

The 24-episode series will premiere new 30-minute episodes each Monday, Wednesday and Friday on go90, the free, ad-based OTT service from Verizon that launched in October 2015 and is geared for younger audiences.

RELATED: Verizon Launches go90 App for iOS, Android

Rooster Teeth said Heyman will be joined by other Rooster Teeth personalities such as Barbara Dunkelman and Ashley Jenkins, comedians and experts to discuss topics ranging from robots, online trolling, genetic engineering, catfishing, time travel, urban legends and augmented and virtual reality.

“You know that friend in your circle that seems to have endless reams of useless knowledge stored away in their head? We’re hoping to make every viewer into a version of that guy with this new show,” Heyman said in a statement.

Rooster Teeth said it has a global footprint that includes more than 28 million subs on its YouTube network, 3 million visitors to its RoosterTeeth.com hub and 1.8 million registered members.

In July, Rooster Teeth launched a two-pronged subscription strategy designed to appeal to its current base of fans as well as subset of “super fans” who are willing to pay a heftier premium for VIP tickets to events, merchandise and other ancillary perks and benefits.

RELATED: Rooster Teeth Expands its SVOD Play 

go90, Verizon’s curated, ad-supported OTT service for millennials, started off as a mobile app when it launched last fall, but has begun to extend a bridge to the TV.

Verizon confirmed that the latest version of go90, version 2.0,  for iOS and Android mobile devices supports video casting to Apple TV boxes as well as the Google Chromecast streaming adapters.

It marks the first time go90 content has been optimized for the big screen. Watchable, Comcast’s similar, ad-supported OTT service, is offered on mobile apps to all-comers and on X1 boxes for its pay TV subscribers.

go90 is also removing some friction with version 2.0, as the app no longer requires users to register in order to watch videos, which can now be viewed via curated “networks” such as Action, Comedy, Drama, and Reality. However, registration is required to use other features such as commenting on content or setting favorites. Additionally, go90 now lets registered users comment on videos while viewing, and has added a simplified way for users to share clips or full episodes from shows and live events via email, text, Facebook or Twitter.

The new app, launched on June 20, introduces “a few new design and navigation enhancements… to help users discover, watch and share content even easier,” the company said, noting that the updates will begin to roll out widely on the platform over the next few days.

The new app could help to drive more usage of go90. Verizon has not announced usage figures for it, but CEO Lowell McAdam acknowledged in May that go90 “did get a little over-hyped,” but added that the company remains bullish about go90’s longer-term prospects.

 “[It’s] one of those things you have to work into, and we’re on pace,” he said at the time. “So, bottom line is Go90 is in a good spot from our perspective we’re going to continue to pursue it, but our expectations are realistic.”

The six-week long strike at Verizon Communications will drive broadband subscribers into negative territory in the second quarter, chief financial officer Fran Shammo said at an industry conference Tuesday.

About 46,000 Verizon wireline employees went on strike on April 13 over pay and healthcare issues. The walk-out lasted about six weeks, with the unions involved and Verizon management agreeing to a tentative pact in May. The contract still needs to be ratified by the rank and file, which is expected on June 17.

At the Bank of America Merrill Lynch Global Technology, Media & Telecom conference in London on Tuesday, Shammo said that because most of the striking employees were in maintenance and installation units, new service installations were drastically reduced during the work stoppage.

“Net additions of wireline will be negative for the quarter,” Shammo said. “Our employees will be back to work, we're doing installations for the month of June, so I don't actually know the exact number that we'll end in the quarter because now we're in catch-up mode. Because we did have a pipeline built during the strike, it's a matter of how much we can get to that pipeline, but I would expect broadband [additions] to be negative.”

Shammo wouldn’t comment directly on a report in the Wall Street Journal that Verizon was readying a $3 billion second round bid for Yahoo’s web assets, but said that the company has embarked on a mobile-first strategy with its purchase of AOL last year and the launch of its go90 free mobile video service.

Shammo said in the next three-to-six months, Verizon intends to “cross pollinate” its products, including integrating go90 and AOL to help it broaden viewership.

“When you get down to it, viewership matters because viewership drives advertising dollars, which drives the top line revenue,” Shammo said. “Yahoo has viewership. We’ll see whether we do move forward or we don’t move forward.”     

Verizon still isn’t sharing a lot of usage and ad revenue results for Go90, the “mobile-first” OTT service tailored for millennials launched last fall, but company CEO Lowell McAdam acknowledged that it has yet to live up to the early buzz. 

“I think it did get a little over-hyped, and I’m sure we contributed to that to a certain extent,” McAdam said Tuesday at the J.P. Morgan Global Technology, Media And Telecom Conference. “But we didn’t believe it was going to move the needle on a $130 billion revenue stream overnight.” 

But he said there’s been enough good signs around Go90 to remain bullish about its prospects. 

“[It’s] one of those things you have to work into, and we’re on pace,” McAdam said. “So, bottom line is Go90 is in a good spot from our perspective we’re going to continue to pursue it, but our expectations are realistic.

McAdam also discussed Verizon’s wired and wireless approaches to broadband access, including its work around emerging 5G technologies and its ability to deliver fast speeds in a fixed wireless setting. 

McAdam reiterated that Verizon has demonstrated 5G-based tech at its Basking Ridge facility delivering 1.8 Gbps. 

“The key for us and I think the rest of the industry is making that a user experience [that] customers really enjoy…whether they are on Wi-Fi, whether they are on LTE-Unlicensed, whether they are 3G or 4G or 5G or whether they want to move back and forth between the fiber in their home or business.”

McAdam also weighed in on cable industry’s complaints raised at last week’s INTX show in Boston about being under heavy attack from regulators. 

“I would just say to those that were complaining, welcome to the pool,” McAdam said. We’ve been swimming in this pool for a long, long time and look our view is when you over regulate an industry there’s so many unintended consequences that it’s usually worse than better, but if you’re going to regulate, then our view is you got to have a level playing field.”

McAdam said Verizon would rather not have to deal with the special access rules for business broadband that could potentially regulate rates for MSO. 

“But I don’t think that’s the kind of regulation that should only be AT&T and Verizon and CenturyLink and Frontier and the traditional telcos,” he said. “If you’re a broadband provider then you need to be over those, you need to be governed by those rules.” 

McAdam was also asked about how the ongoing contract dispute with Verizon wireline workers on the East Coast have impacted the company’s business. 

“We have pushed off installations or doing a lot of installations, but we’re not doing the same volume that we have before,” McAdam said. “We won’t be driving similar numbers in second quarter that we would in first from an installation perspective.” 

Last week, Verizon and representatives of the CWA and IBEW communications workers unions agreed to federal mediation of their current contract dispute.

As the pay TV industry as a whole continues to weather the cord-cutting threat to its business, Dish Network could be readying what some analysts have been calling for all along — the eventual shift of its traditional satellite-TV customers to cheaper and more easily managed over-the-top offerings.

Dish had its fourth consecutive quarter of net subscriber losses in Q1, shedding about 23,000 total customers.

But because Dish lumps its Sling TV over-the-top service results in with satellite figures, the losses on the traditional side were much heavier. Depending on the analyst, those losses were between 158,000 and 165,000 in the first quarter.

Even at the smaller number, it would be the worst first quarter ever for Dish on the subscriber front — on the heels of its worst third quarter ever and its worst Q4 since 2010.

BLEEDING OR SHIFTING?

The losses could be intentional, according to Morgan Stanley media analyst Ben Swinburne. In a recent research report, he noted that the company could be slowly migrating its traditional base of direct broadcast satellite subscribers to its potentially more profitable Sling TV over-the-top platform.

Moving traditional subscribers to a new platform isn’t unprecedented: AT&T seems to be shifting its U-verse TV telco subscribers to its DirecTV satellite platform, and even Verizon Communications has hinted that its go90 mobile platform, rather than Fios TV, is the future.

Such a move would not be without risk, though. A shift from satellite to Sling TV would help lower costs and would appear to target higher-end customers, but Sling TV has a significantly higher churn rate than Dish Network.

In a note to clients, Swinburne estimated that subscriber-acquisition costs (SAC), or the amount of money Dish invests to attract a customer, is expected to fall from $875 per gross satellite customer addition in 2015 to about $840 per customer this year, in part because of lower advertising costs.

But the larger and more sustainable reason, Swinburne said, is a dramatic shift in capitalized SAC — mainly equipment costs — to $125 per gross satellite addition in the first quarter, mainly from recycling returned set-top boxes instead of buying new ones. It was the lowest level of capitalized SAC Dish has reported since it started leasing boxes to customers in 2009.

In a research note, MoffettNathanson principal and senior analyst Craig Moffett said blended SAC for both services was about $648 in the first quarter, down from $727 in the fourth quarter.

The managed shift to Sling TV also appears to be reducing programming costs. Swinburne estimated that programming costs rose 2% to 3% in the quarter for Dish.

“We also believe Dish will be able to moderate any growth in customer service and retention spend as it shrinks its satellite sub base and pivots towards the lighter-touch Sling business,” Swinburne wrote.

But the churn rate for Sling is nearly three times that for a traditional customer — 4.3% vs. 1.6% for traditional satellite TV.

Gross subscriber additions, an important metric for satellite-TV companies, were about 496,000 in the first quarter (less the Sling TV estimates), Moffett estimated, representing a 10.5% decline year-over-year.

“Either the core business is rapidly losing its appeal to consumers or Dish is actively pushing consumers to its online Sling alternative,” Moffett wrote.

He added that it is unlikely Dish would push its customers to Sling, but if they did, they would have huge hurdles to overcome. While there will be invariable comparisons to Netflix’s transition from mail-order DVDs to streaming media, there are two key differences: Dish’s business is much larger and its fixed-cost infrastructure — the billions of dollars of satellites currently orbiting the Earth — is enormous.

“All that means is that the transition will be much, much harder than Netflix’s,” Moffett wrote.

TOUGH TRANSITION

Swinburne doesn’t think it will be easy, either. Making Sling TV more attractive — Dish said it was trying to entice The Walt Disney Co.’s ESPN to join its recently launched multistream service — would likely result in a price increase to at least $30 per month from its current $20 per month. At that price point, Sling TV and a broadband connection will cost about the same as the traditional triple play, which would make it a harder sell to cost-conscious consumers.

Still, the analyst said that Dish shouldn’t be underestimated.

“Two years ago, Disney-Dish birthed Sling and the product was roundly dismissed by media companies as niche to the consumer and benign to the bundle, but many now are demanding to be distributed on Sling,” Swinburne wrote. “Two years from now, perhaps Dish will be dictating content cost terms on Sling, not the other way around?”

Verizon Communications said Wednesday that it has reached an agreement to purchase a 24.5% interest in AwesomenessTV in a deal that will values the multi-platform programmer at $650 million.

DreamWorks Animation, which formed AwesomenessTV in 2013, will remain is majority shareholder with 51% ownership, while Hearst will own the remaining 24.5%. Brian Robbins, AwesomenessTV founder and CEO, and Brett Bouttier, AwesomenessTV’s president, will continue to lead the Company.

In addition to its equity investment, Verizon will enter into an agreement with AwesomenessTV to create a premium short-form mobile video service, which will operate as an independent brand.  The new service will launch as part of the go90 offering and Verizon will fund the initiative through a multi-year agreement with AwesomenessTV.

 “In addition to delivering compelling scripted and non-scripted series with high production values, AwesomenessTV has demonstrated an ability to zero in on programming that Gen Z and millennials want to watch,” said Verizon executive vice president and president of Product & New Business Innovation Marni Walden in a statement . “The content AwesomenessTV has produced for go90 has exceeded all our expectations with shows such as Guidance and Top Five Live. That’s why we want to be in the AwesomenessTV business."

The new premium content service will initially be exclusive to Verizon platforms in the United States, while AwesomenessTV will retain rights for the rest of the world.

 “This deal gives us the resources to work with the biggest talent in front of andbehind the camera to create this new branded service and produce the most premium short-form content ever, made specifically for the device racking up the fastest growing viewership – the mobile phone,” Robbins said in a statement. “With Verizon joining DreamWorks Animation and Hearst as part of our equity ownership group, we benefit from the strategic insight and resources of the entertainment and communications industries’ most visionary companies and leaders. Our goal is to be the media company of the future, where content and distribution go hand in hand – we are now one giant step closer to that future."

  “The creation of this new branded service represents a transformational step, not just for AwesomenessTV, but also for the entire mobile video landscape,” said DreamWorks Animation CEO Jeffrey Katzenberg in a statement.  “This agreement is clearly impactful for AwesomenessTV – with annual revenues expected to more than double in the first 12 months of content delivery – and even more exciting is the expansion of our relationship with Verizon, one of the world’s most powerful marketers and content distributors, and their commitment to explore with us this incredible opportunity.”

LionTree Advisors LLC acted as advisor to Verizon during this transaction and J.P. Morgan Securities LLC advised DreamWorks Animation. The transaction is expected to close in the next 60 days.

Verizon Communications, a little more than a decade after it launched its Fios TV and Internet service, is moving quickly toward what it believes is the future of the video industry.

It’s a future that hearkens back to TV’s over-the-air origins, where consumers can get all the bandwidth and content they want with no strings attached.

Verizon appears to be banking that mobility — long a buzzword in the video business, but one that hasn’t yet made a big dent in overall viewership — will take a dominant position in the next several years.

For the past year, the New York-based telco has been on a tear to remake itself into a 5G powerhouse:

• In February of 2015, Verizon agreed to sell Fios assets in Florida, California and Texas with more than 1 million video customers to Frontier Communications for $10.4 billion, a deal that is expected to close March 31;

• Verizon bought XO Communications’s fiber network in February for $1.8 billion;

• It launched FreeBee data, a sponsored data service that allows customers to download and watch certain video content without using up their wireless data plans, in January;

• It launched Custom TV — one of the first successful “skinny” video bundles — in April of 2015, revamping the package this February;

• It launched mobile-only, ad-supported over-the-top video service go90 in October of 2015;

• It purchased online icon AOL in June of 2015 for $4.4 billion.

BIG SHIFT AHEAD

Verizon’s recent moves point to its belief that a major shift in the video business is coming, Craig Moffett, principal and senior analyst at MoffettNathanson, said.

“It seems like they’ve made a complete reconceptualization of the video business inside of Verizon and have decided if there is an opportunity in video, it’s in wireless, location-based advertising,” he said. “If they’re going to win in that business, they’re going to have to disrupt the video ecosystem. It seems to me that they have decided that any ties they have to the status quo are a liability.”

Nowhere in the product set is that more evident than with go90. Launched in October, go90 has been downloaded by about 2 million users, has according to some reports. It was ranked No. 300 among all apps on the iTunes Store and No. 20 against all entertainment apps, according to UBS Securities telecom analyst John Hodulik.

Go90 is different than the other millennial-targeted mobile services in that — for now — it is fully ad-supported, meaning Verizon isn’t charging a monthly fee for the service. Customers can watch about 8,000 on-demand titles and stream content from MTV, Comedy Central, ESPN, Food Network, Discovery Channel, AwesomenessTV and others.

Increasing the number of go90 users is a priority, but it’s not the main point of the service, Verizon chief financial officer Fran Shammo said on a January earnings call.

“The key to us is not the downloads; the key is viewership,” Shammo said. “It’s around content and we will continue to add content that is favorable to all generations of population.”

Later, at the Deutsche Bank Media, Internet & Telecom conference on March 8, Shammo said that the addition of AOL’s 350 million users could help add needed scale to the service.

“Eyeballs will be the winner at the end of the day because the more eyeballs I can get to that platform, the more advertisers that are going to come and want to advertise, and therefore I can monetize the usage,” he said.

That strategy has emerged from Verizon’s past eff orts to pay more and more for additional wireless usage — efforts that haven’t worked in part because disposable income in the U.S. hasn’t really grown since 1991, Moffett said.

“Go90 is not about trying to create a substitute for Netflix,” Moffett said. “They’re not out competing with other video services in the traditional sense; they’re trying to create advertising inventory.

“They need to get customers to spend some time looking at their phones. If they can get customers to spend time engaged with the device, they are highly confident that there is a long list of advertisers who will pay for reaching those customers.”

In a research note, Hodulik recounted a meeting with AOL CEO Tim Armstrong, saying the company estimates there is an $80 billion near-term incremental opportunity in the ad space — $40 billion from video and $40 billion from mobile. AOL held 40 meetings for go90 with advertisers during the fourth quarter, Hodulik said. It will spend 2016 building an audience for the service and expects “real traction this year.”

All this seems like a huge departure from when Verizon launched Fios as a means to tap into the lucrative TV market and preserve what at the time was a rapidly declining wireline business.

When Verizon introduced Fios in Keller, Texas, in May of 2005, it — along with AT&T’s U-verse — was supposed to be the last nail in cable’s coffin. It spent $20 billion on a massive fiber upgrade and unleashed unheard-of data speeds (up to 50 Mbps!) on a bandwidth-hungry public.

Now cable is enjoying a resurgence — Charter Communications and Time Warner Cable both had their first positive video-customer growth in nearly a decade in 2015 — and Verizon’s Fios TV has seen its growth slip.

But Verizon’s reversal of fortune doesn’t mean the Fios experiment was a failure. For many people who follow the company, Fios will remain a key component in Verizon’s new direction and will play an additional role. Verizon’s new mantra is mobility.

Lowell McAdam, Verizon’s CEO, said as much in 2014, telling an industry conference its then-recent purchase of Intel’s OnCue video service would enable it to take Fios content over-the-top and make it mobile on a nationwide basis.

The telco’s strategy is to use its existing network to deliver wired broadband and television service throughout its territory while also serving as a backhaul network for its wireless assets. Chief network officer Kyle Malady said Verizon fiber currently passes about 20 million homes, and the telco has already started trials for the next generation of wireless technology — 5G — with its promised 1 Gigabit-per-second speeds.

In the meantime, the company still sees opportunity in wireline service.

“From what you’ve seen from us, obviously there is no one answer,” Verizon spokesman Ray McConville said. “There is no ‘one-size-fits-all.’ We’ve adapted ourselves to have something for everyone.”

In some ways, Verizon is a walking contradiction. It has said it wants to grow the Fios TV business, yet it sold a huge chunk of video and broadband subscribers last year to a CLEC. In an era when rival cable companies are scrambling to accumulate greater and greater scale, Verizon appears to be taking the opposite stance.

BEEFING UP REGIONALLY

The main thrust behind the recent asset sales has been to cluster its operations in the more densely populated Northeast and Mid-Atlantic regions, Malady said. In addition to being able to target a bigger pool of homes for service, the concentration also makes its network more efficient to operate.

Both video and broadband growth have slowed. Fios TV added just 20,000 video customers in the fourth quarter, its lowest quarterly growth ever, and Fios Internet added 99,000 subscribers, down from 145,000 additions in the prior year.

Shammo said Verizon still sees growth opportunity even in its more-mature Northeastern markets. At about 5.8 million video customers at the end of 2015, Fios TV has about 35% penetration throughout its footprint. That’s about the same as Charter Communications, the cable operator that many in the industry believe has the greatest video-subscriber growth potential of any U.S. incumbent.

Shammo isn’t the only one who believes Verizon can squeeze more growth out of the wireline network.

According to Barclays telecom analyst Amir Rozwadowski, Fios TV is expected to grow to about 5.9 million customers by 2017, up 5% from 2014. At the same time, Fios broadband customers are expected to rise 18% to 7.8 million customers by 2017.

The Fios fiber network isn’t just tethered to residential TV and broadband service; it also carries data traffic between wireless cell sites. That means that Verizon will be ready when video traffic increasingly shifts to wireless, a move many pundits see coming.

According to Cisco Systems’s Visual Networking Index, mobile video traffic accounted for 55% of all mobile data traffic in 2015; by 2020, 75% of the world’s mobile data traffic will be video. That means robust backbone networks will be more important than ever.

“The next five years are projected to provide unabated mobile video adoption,” the report said. “Backhaul capacity must increase so mobile broadband, data access, and video services can effectively support consumer usage trends and keep mobile infrastructure costs in check.”

That’s where the Fios backbone network and the telco’s eff orts to make 5G wireless technology a reality come in.

“At the bandwidths they’re talking about [for 5G], the nodes are going to need to be close together, and they are going to require fiber,” Malady said.

Fiber also becomes an extremely important factor once wireless video traffic increases, as anyone who has tried to stream the season premiere of a popular show like Game of Thrones knows. Wireless streaming is only as good as the pipes behind the towers transferring the data.

“The network behind it is the key, because that’s where a lot of these things get choked at peering points,” Malady said. “It all comes down to having good fiber connections between these places to move the bits.”

But in the bandwidth business, demand eventually outpaces supply. Verizon’s purchase of the XO Communications fiber network will mainly help its enterprise business, but it will also help with wireless backhaul, particularly between smaller cell sites. It’s capacity that Malady said is more than needed in today’s environment.

5G’S FIBER FOUNDATION

“I have been around for 27 years and I haven’t seen the growth curve stop,” Malady said. “It just keeps going up and up and up, and people’s demand for bandwidth continues to grow, and that’s why we think we’re pretty well-positioned with our fiber assets, and that’s why we’re requiring more.”

Touted as the next generation of wireless, 5G still has a way to go, as standards still haven’t been created for the service. But like its predecessors before it — 4G and LTE — 5G is the next evolution in wireless technology, offering speeds 30 to 50 times faster than 4G, reduced latency and improved power efficiency. Verizon has been at the forefront of the technology, beginning field tests of the technology earlier this year and predicting a limited commercial rollout as soon as next year.

“Just like we were out ahead of the market on LTE, we’re ahead of the market on 5G,” Malady said. “By definition, at the bandwidth we’re talking about, cell sites and nodes require a lot of fiber. Fiber is a big piece of the equation.”

Shammo is equally enthused.

“We believe that 5G is near-term, not far-term, and it is going to bring a whole different dynamic to the industry,” Shammo said at the Deutsche Bank conference. “It is going to give another growth profile for this industry.”

Actors Ben Affleck and Matt Damon will team with with Adaptive Studios and Pilgrim Media Group to launch a new competition series to run on Verizon's mobile-first video service, go90.

The series, The Runner, will depict an individual’s attempts to make it across the United States unnoticed over the course of 30 days while eluding technology being used to track his or her whereabouts, said company officials.

The series, scheduled to launch this summer, will allow go90 users who provide tips, sightings and evidence of the Runner’s location are also eligible to win big money.

“We’ve been busy bringing a lot of original content to go90, but to deliver on an original with this level of interactivity for users excites us,” said Shawn Strickland, head of product innovation at Verizon in a statement. “Go90 is inherently social and producing content that supports those elements of the platform creates a pairing for something unique.” 

Verizon is giving Go90, its new “mobile-first” OTT service some time to catch on and evolve in the coming years, but the company acknowledges that it would like to see the offering attract more eyeballs.

Go90 offers a new strategic direction that’s pleasing for advertisers, “but we have to get the viewership up,” Fran Shammo, Verizon’s EVP and CFO, said Tuesday at the Morgan  Stanley Technology, Media and Telecom Conference in San Francisco.

He said Go90’s ability target younger audiences is worth more than a “blanket TV ad” that spans multiple segments to some advertisers that are trying to connect with millennials.

 “This was not something launched last year that would take off immediately like a new smartphone,” Shammo said of Go90, noting that the service has seen some traction around its NBA coverage, music offerings and content from partners such as AwesomenessTV. “This is going to be a progression and evolution for us over the next two to three years.

“We’ll continue to evolve this product through 2016,” he said.

And it will continue to monetize Go90 via advertising models, including FreeBee Data, a sponsored data service that Verizon’s been trialing, but will launch commercially on March 5.

“Advertisers are excited about the prospects around Go90,” he said.

Shammo was also asked to discuss Custom TV, FiOS TV’s slimmed-down offering that was  recently reshaped and split into two packages, including one that now includes ESPN.

Shammo said the take rate under the revised Custom TV offerings are at about 40%, noting that FiOS TV is also seeing some uptake of its add-on packages.  

Looking ahead, the exec sees “more conflict between content and linear TV providers…I think it’s just the nature of what’s going to happen in this ecosystem.” But he was likewise hopeful that content distribution deals for Go90 will give Verizon more leverage in its carriage negotiations for FiOS TV.

Shammo also said Verizon was interested, but not yet ready to commit, to making a move for some Yahoo assets that are on the block.

“We’ll look at every single opportunity, whether it's an opportunity to divest some of our portfolio or whether it’s an opportunity to acquire that we believe will increase our shareholder value,” he said. “Yahoo falls into that bucket.”

He said it’s premature to commit to anything beyond that “because I don’t think anybody knows what’s under the hood yet…That’s just an opportunity that we’ll look at.” 

WASHINGTON — Depending on who’s doing the talking, zero-rating plans are either potentially anti-competitive violations of the Federal Communications Commission’s new network-neutrality rules or an innovative business plan that could help drive broadband adoption and benefit low-income Web users.

But the key to the future of those toll-free or sponsored data plans, which are becoming increasingly attractive, is what the FCC decides they are after it completes an inquiry into the practice.

The FCC is still vetting the information it requested in December from major Internet-service providers — the mid-January deadline for data in the inquiry was pushed back by Winter Storm Jonas, which buried the nation’s capital.

The inquiry appeared to be a reaction to pressure from zero-rating plan critics after FCC chairman Tom Wheeler in November praised T-Mobile’s new “Binge On” offering, which allows the mobile phone provider’s subscribers to access video from certain providers without it counting against subscriber data caps, as just the type of innovation the FCC’s new Open Internet order would not discourage.

When Wheeler seemed to backtrack on that praise and said the agency wanted more information about Binge On, Comcast’s Stream TV service and AT&T’s sponsored data plans, AT&T responded, “We remain committed to innovation without permission, and hope the FCC is too.”

AN INQUIRY, NOT A FIAT

Wheeler insisted two weeks ago that the FCC’s inquiry was merely that, telling reporters he had not sat in on any of the meetings, nor had any of the members of his staff.

But the chairman controls the agency’s bureaus, Republican commissioner Michael O’Rielly countered. “We do all know that the bureaus are at his discretion because otherwise, I would get a lot more information,” O’Rielly said.

O’Rielly said he is still trying to find out more information about the inquiry, but said that he was troubled by the direction in which the FCC was heading. He said he was troubled by the “mother may I” approach of the agency’s having to bless — or reject — new business models. That was concerned him about the net-neutrality rules, he said.

The new Open Internet rules do not prevent zero-rating plans, but they do prevent paid prioritization and also give the FCC some wiggle room through a general-conduct standard with which it can essentially review any business practice it thinks might have the effect of favoring some content over others for anti-competitive purposes.

“Because the Internet is always growing and changing, there must be a known standard by which to determine whether new practices are appropriate or not,” Wheeler said back when he proposed the Title II-based rules.

At the Internet Education Foundation’s 12th annual State of the Net conference in Washington two weeks ago, people on both sides of the issue were trying to help the FCC decide.

Roslyn Layton, a visiting fellow at the American Enterprise Institute’s Center for Internet, Communications, and Technology Policy, made the case for why zero rating plans were not the threat to Internet openness that some have claimed.

She said that there is no good or service that is not subject to a differential price and said it was “strange” to her why Internet service would be singled out.

She said the one of the best things about the history of TV, radio and the Internet was that advertisers and sponsors were allowed to lower the cost to end users. That’s a key difference between media industries in the U.S. and Europe, she said, saying Europe’s license-fee model has meant fewer channels and less content.

The Internet also benefits from third-party subsidization, she said, pointing out that edge provider Google effectively zero-rates its search by displaying ads.

One criticism of the FCC’s approach to its new Internet rules is that they target ISPs while leaving edge-provider business practices alone. ISPs aren’t explicitly asking the FCC to regulate the edge, but point out that there are opportunities for edge providers to interrupt the virtuous circle that the FCC appears to gloss over in focusing on regulating ISPs. Wheeler has said edge providers are outside the scope of the rules.

On the other side is Stanford University law professor Barbara Van Schewick. The key to the issue is whether a zero rating plan has the effect of “picking winners and losers online,” she said. The bright-line net neutrality rules are about doing that with technology, via slowing or blocking traffic or by buying a technical advantage for a fee, aka paid prioritization.

Zero-rating is just a different form of favoring some content over others, she argued — via business plan, rather than technical limitations or advantages.

WATCHING FOR ‘COMPETITIVE ADVANTAGE’

Comcast’s Stream TV, for example, was not about subsidizing access, but instead about “giving a competitive advantage to [Comcast’s] own application,” she said. That is a key net-neutrality concern, she said.

Kevin Martin, former FCC chairman and now an attorney for Facebook, which has its own zero-rating program to try and boost basic connectivity, said he didn’t have any problem with the FCC taking a case-by-case approach to vetting business plans under its new rules, but said zero-rating can be beneficial.

Martin signaled the FCC was right to be vetting the plans, but did not throw cable operators under the bus. He said MSOs would argue their customers have already paid for the programming ISPs are zero-rating.

But unlike cable operators, which have issues with the FCC’s case-by-case approach under the general conduct standard, Martin was all for it. “I think an analysis of what’s actually going on with each program is appropriate, and the FCC got that component right,” he said.

Layton argued zero rating plans aren’t just for the big dogs. She said they benefit smaller network providers who can’t compete with larger providers in terms of speed, but need another way to differentiate themselves.

Verizon has begun to zero-rate streaming of go90 content for postpaid customers when they are connected to the mobile carrier’s LTE network.

That’s according to a new customer agreement distributed this week by Verizon, caught first by DSL Reports.

“Beginning on or about February 4, 2016, if you are a Verizon Wireless post-paid customer and you download the current version of go90 (release 1.4), you can watch any video on go90 without incurring Verizon Wireless data usage charges so long as you are connected to LTE," the agreement states. "Other activity that does not involve watching videos, such as downloading go90 from an app store, browsing or searching for shows, posting comments, sharing clips and viewing settings will incur data usage charges.”

Verizon, which launched the ad-supported go90 OTT service in October 2015, has already been experimenting with zero-rated policies that have gotten the attention of network neutrality advocates. Last month, it began to test FreeBee Data, a sponsored service that is exempt from mobile data-usage policies.

The current go90 agreement also makes note that Verizon may also offer  “promotions and/or plans that allow you to watch some or all go90 Content without incurring data use charges” from Verizon and other wireless providers.

Update: Verizon told Re/code that the new policy for go90 does “take advantage of Verizon’s FreeBeeData 360 service, which allows them to pay for customer’s data usage associated with watching videos on the Go90 app….“FreeBee Data 360 is an open, non-exclusive service available to other content providers on a non-discriminatory basis. Any interested content provider can use FreeBee Data 360 to expand their audiences by giving consumers the opportunity to enjoy their content without incurring data charges.”

Those data usage costs, the carrier added, “falls to Go90 and we wanted to give our users an opportunity to watch everything in the app without it counting against their data plans.”

Verizon's FreeBee approach followed the launch of “Binge On” from T-Mobile, which uses a proprietary, bandwidth-efficient encoding system that delivers mobile video in 480p format (DVD quality), and zero-rates streams from several content partners, including Netflix, HBO, Starz, Sling TV, and Hulu. AT&T, meanwhile, has dropped hints that it is evaluating sponsored-data services.

Verizon gave the FCC the heads up about FreeBee Data prior to the launch of the sponsored-data offering. The FCC, which will take a case-by-case approach on new sponsored-data and zero-rated policies and services, noted that it "will continue to communicate with the company [Verizon, in this instance] on this issue.”

 In the meantime, the FCC is on a fact-finding mission for services such as Comcast’s "Stream" IPTV service, an in-home, managed IP-based service tailored for cord-cutters that’s not delivered “over-the-top” and, therefore, not tied into the MSO’s usage-based broadband data trials, as well as T-Mobile’s Binge On service.

go90, Verizon’s new ad-based mobile video service, will bring more live and on-demand content to its platform with the addition of Fight Sports.

The addition will stream in Fight Sports’s lineup of content from championship boxing, kickboxing, martial arts, MMA, news, documentaries and other original fight-related content, including Knockouts and Wide World of Fights, and Fight Quest, a reality series produced by Discovery Networks and acquired by Fight Sports parent CSI Sports.

In addition to expanding go90’s content lineup, the distribution deal also expands the reach of Fight Sports. In the U.S., the Fight Sports weekly programming block reaches more than 70 million homes via regional sports networks, according to CSI Sports.

Go90, which recently added One World Sports to its mobile video lineup, launched on iOS and Android phones and tablets on Oct. 1, 2015.

One World Sports has inked an expanded deal with Verizon Communications that will bring its content to go90, Verizon’s new "mobile-first" video offering, while also covering HD  distribution on FiOS TV and TV Everywhere rights.

On the go90 end, One World Sports is offering access to “all the global sports” carried by the programmer, including baseball from Japan, basketball from China, hockey from Europe and Russia, cricket from England and soccer from the UK, Europe and Asia.

Its HD feed is now offered on FiOS TV channel 597, and can be streamed via the FiOS Mobile app for iOS and Android mobile devices.

Speaking on last week’s Q4 earnings call, Verizon CFO Fran Shammo acknowledged that the go90 app had been downloaded more than 2million times, but said the key to the offering is now downloads but around “viewership and…content,” including content that appeals outside go90’s core millennials audience.

“Internally we have surpassed what we thought we would have at this point in time,” he said. “We have set higher targets for 2016, because we need to build the viewership in a much quicker fashion.”

Go90, he said, isn’t expected to turn a profit “within a one to two-year horizon,” he added. “When we launched it, we said two to three, but it’s probably two years before that will become a profit contributor to the enterprise.”

Verizon launched go90 on October 1, 2015.

go90, Verizon’s new mobile-first video service, announced it will offer an exclusive stream of Miley Cyrus’s close out performance of The Milky Milky Milk Tour on Saturday, Dec. 19 at 9:55 p.m PT in Los Angeles.

The performance, tied to the singer’s latest album, Miley Cyrus & Her Dead Petz, is part of the go90 Live streaming concert series, which aims to draw more viewers to the millennials-focused, ad-based OTT offering that launched nationally on October 1 on the iOS and Android mobile platforms.

In addition to the live stream from The Wiltern in L.A., go90 will also offer exclusive behind-the-scenes footage tied to Cyrus’s final performance of the tour.

Go90 will also provide on-demand replays of the performance.

Speaking at an investors conference earlier this month, Verizon CFO Fran Shammo said it was too early to discuss go90 results. While he was happily surprised that the service had amassed a library of about 10,000 titles, he acknowledged that the offering’s search engine had some shortcomings in its early days, but said those problems have since been ironed out.

go90 “is still in its infancy stage,” he said. “We're still working through some early startup issues. But right now we're pretty pleased with what we're seeing.”

If Verizon has any interest in jumping into the rumored sweepstakes for Yahoo’s Internet business, its CFO is keeping those plans pretty close to the vest.

“Yahoo? Who’s that?” Fran Shammo, Verizon’s CFO and EVP said in a joking response to  question about the M&A scuttlebutt from UBS analyst John Hodulik Monday during the firm’s Global Media and Communications Conference. “I think it’s way too premature to talk about Yahoo…their Board and investors have not decided what they're going to do with that asset. I think right now they are trying to figure out exactly what they are going to do.”

The question came up because The Wall Street Journal reported last week that the Yahoo board  is meeting to consider shedding its Internet properties.

But Shammo said Verizon would be willing to look at those assets to see if there’s a “strategic fit and it makes sense for our shareholders” and get a good return value out of it. “But at this point it’s way too premature to talk about that one,” he repeated.

Still, Verizon, through its recent acquisition of AOL,  has demonstrated that it has an appetite for deals that involve other large, Internet-facing businesses.

Shammo also said it’s too early to discuss the early results involving Go90, Verizon’s new “mobile-first” OTT video offering that launched on October 1. 

“We really just started to advertise it in more mass media here starting Black Friday, so it’s really early stages here,” he said.

But Shammo did offer up some things that surprised and disappointed the company in the early going.

The surprise is that go90 has access to about 10,000 titles, he said, but acknowledged that the service had some issues with its search engine in the early going.

It “was maybe a disappointment that we didn't go out with the right search engine in the beginning. But now we've fixed that,” he said, noting that go90’s clipping and sharing feature “is just starting to take off.”

Shammo said he anticipates that Verizon will release some numbers around go90 next year. “But it is still in its infancy stage. We're still working through some early startup issues. But right now we're pretty pleased with what we're seeing.”

He also expects go90 to start monetizing on the advertising front using AOL’s platform next year.

Shammo also outlined a set of monetization models that will come into play for go90, including sponsored data – Verizon Wireless subs, for example, will get the data for free to stream ad-supported video. But Verizon, he added,  will tread carefully into that arena “because that opens up net neutrality issues.”

Go90’s also looking into new types of premium content and some video that is bought by viewers on a  pay-per-view basis and delivered using bandwidth-friendly LTE multicast technology.

Shammo was also asked about Verizon’s interest in using LTE-Unlicensed technology, which  is mired in controversy over concerns by cable operators and others that LTE-U will trample on WiFi.

Shammo said Verizon has not yet deployed LTE-U, but does not foresee any issues. “There is a lot of work being done at the FCC. We're helping to do trials with the FCC to put down some of the claims that LTE unlicensed will interfere with WiFi, which is absolutely not true,” Shammo said. “It’s actually complementary to WiFi, so we're doing trials with the FCC to prove that out."

The Kudelski Group said its OpenTV and Nagra France SAS subsidiaries have filed a patent infringement suit against Verizon Communications and its AOL division over claims that they are infringing on a batch of U.S. patents tied to streaming video services.

The suit, filed in the United States District Court for the Eastern District of Texas, alleges that Verizon and AOL are infringe seven patents owned by OpenTV and Nagra France, and identify a range of products and services, including FiOS TV and its authenticated TV Everywhere services, Redbox Instant by Verizon  (an SVOD service that was shut down in October 2014), Go90, Verizon’s new mobile-first OTT video offering, AOL’s Spot On advertising and streaming video services. Verizon closed its acquisition of AOL on June 23, 2015. 

Update: Verizon said it does not comment on pending litigation. 

Kudelski took control of OpenTV, a company that also specializes in set-top middleware and applications, in late 2009, but sold OpenTV’s advanced advertising business unit to Imagine Communications about a year ago.

The Kudelski Group, headquartered in Switzerland, said it currently holds over 4,500 issued and pending patents worldwide. 

New York – Content for digital short-form and long-form shows is increasingly coming from the gaming and social communities, with a growing list of content creators emerging from online sources like Instagram, Vine and similar sources, a panel of experts said at a Next TV Summit panel session Wednesday.

While online video sites like You Tube are still a major source to find talent, Maker Studios vice president of distribution and strategic partnership Kendra Johnson said during the Next TV session “The New Studios,” that her company is increasingly finding content creators trough other sources.

“Across our creative community we are active in discovering voices as they arise,” Johnson said during the discussion moderated by B&C deputy editor Mike Malone.

She added that Maker, which was purchased by the Walt Disney Co. last year, also casts from traditional sources – Maker is working with actor James Franco’s production company on a project as well as with alumni from Saturday Night Live and ABC sitcom Modern Family.

“Consumers are not consuming one type of content,” Johnson said.

New Form Digital, which recently signed a deal to provide six short-form digital series to Verizon Communications’ go90 mobile video service, also taps talent from several different sources, including You Tube. Senior vice president of development JC Cangilla said that typically New Form signs talent that already has a following on social media.

“We tend to respond to things people have put up and that have been tested,” Cangilla said.

The types of content being produced runs the gamut from horror and drama to comedy and reality shows, but another emerging genre and one that lends itself well to the digital platform is interactive content. At Interlude, a company that specializes in interactive digital content, president and chief operating officer Jim Spare said distributors are learning a lot from the gaming community.

Interlude adds interactive capabilities to programming allowing viewers to directly engage with shows, whether it is by answering questions or choosing specific camera shots and angles to actually determining which direction a particular story will go. Spare said the inclusion of interactivity drives deeper engagement with viewers – in one two-and-a-half minute short that allows the viewer to direct how the main character reacts to a potential home invasion, viewers spend an average of 7 minutes clicking on different outcomes.

“We’re finding that young audiences love the idea of being able to talk to a video and interact with a video,” Spare said. “It’s truly personal and it’s driving retention and engagement rates.”

While the interactive element seems to take some of the creative control out of the content creators’ hands, the panelists said that isn’t the case because the creator defines each scenario. And it provides them with information regarding what their viewers like to see.

“We’re finding a class of creator that loves the notion of enabling the experience,” Spare said.

That mountain of data also is valuable to advertisers.  

“This is very valuable to advertisers and brands trying to deliver a message,” Spare added. “There are incredible applications in testing and being able to test consumer reaction to different choices for talent and story lines.”

Content creators also are becoming increasingly savvy regarding finances, especially since larger companies like AT&T, Verizon, Disney and AOL have begun to invest in the space. But the new breed of content creator isn’t just biding their time before they strike a big network deal.

Johnson said it depends on the creators – some are looking to a network or feature film deal as the ultimate goal, while others would rather keep control of their content and maintain a more personal connection to their audience.

Cangilla agreed.

“The talent class we tend to work with are entertainers and entrepreneurs; they understand the economics of the business of the business,” Cangilla said. “In some cases the TV deal would be most lucrative, but in other cases it would be the digital one.”

In a study that should provide comfort to Comcast and Verizon as they try to draw eyeballs to their new Watchable (pictured) and go90 over-the-top services, Adobe found that 92% of millennials in the U.S. consider the smartphone to be their primary device for watching TV when on the go. 

That compares to 84% among GenX'ers, 69% of baby boomers, and 67% of the 70-and-older crowd, per Adobe’s survey of cross-section of 4,000 consumers in the U.S., the U.K., Germany and France (the stats cited here are Adobe’s for the U.S.).

Additionally, 38% of those surveyed said they are using mobile devices to watch live sports, well above 9% from  Adobe’s study from last year.

And most consumers aren’t shy about registering personal info in order to gain access to ad-supported content. About 63% of U.S. mobile users told Adobe that they provide their email address in exchange for receiving premium content with advertising.

Among other findings, Adobe said 67% of U.S. respondents favored apps for streaming TV shows and full-length movies. But just 31% of millennials said they were extremely satisfied with that mobile experience, versus 20% of the GenX group, 13% of Baby Boomers, and 9% of consumers 70 years and older.

Adobe also found that millennials and GenX respondents perceive personalized experiences to be just as important as “simplification,” a category that includes elements such as recommendations based on viewing history.

Sling TV, Dish Network’s OTT-TV service for cord cutters, is tacking on some college sports programming with the addition of Campus Insiders to its Sports Extra pack.

Campus Insiders, also offered on Verizon’s new “mobile first” Go90 service, provides access to hundreds of live college sporting events, including the inaugural NOVA Home Loans Arizona Bowl (on December 29), the Seth Davis Show, and sporting events from the Mountain West Conference, Patriot League, West Coast Conference and the Central Intercollegiate Athletic Association (CIAA).

Sports Extra, which sells for $5 per month on top of Sling TV’s core $20 TV package, also features SEC Network, ESPNU, ESPNEWS, ESPN Buzzer Beater, ESPN Goal Line, ESPN Bases Loaded, Univision Deportes, Universal Sports Network, and beIN Sports.

“People flock to Sling TV for live sports and we have seen incredible viewership on sports channels every Saturday, as college football ramps up,” said Roger Lynch, CEO of Sling TV. “ Campus Insiders deepens our college sports offering with conferences that, until today, have been underserved when it comes to watching games live. Everyone deserves the chance to root for their favorite team on the big screen, and we are proud to be the first to offer these fans that premium experience with Sling TV.”

“With our commitment to covering the world of college sports and delivering the live games of our conference partners to a wider audience, Campus Insiders’ growth is a testament to the insatiable appetite of the more than 100 million Americans who call themselves college sports fans,” added Brooks Boyer, CEO of Silver Chalice, the digital sports media unit that owns and operates Campus Insiders. 

Looking to connect with millennials and other younger audience sets, Comcast on Tuesday launched a beta version of Watchable, the MSO’s anticipated online, cross-platform video service that offers a curated selection of shows and content from about 30 partners, including Buzzfeed, GoPro, AwesomenessTV, Maker Studios, Refinery29, Vice and Vox Media, among others.

Comcast’s said the beta version of the ad-supported Watchable service is initially available on iOS smartphones and tablets, at Watchable.com and via the MSO’s X1 platform for set-tops and mobile devices (a Watchable app for Android is "coming soon," an official said). While only Comcast subscribers can access Watchable on X1, non-subs can stream Watchable content via the Web site and the Wathcable iOS app. All content for Watchable, including what's delivered to X1 boxes, will be streamed over-the-top. The beta debut comes about a month after a Web-based demo of Watchable appeared online temporarily. The beta debut of Watchable also comes just weeks after Verizon launched a private, invitation-only trial for go90, its “mobile-first,” ad-driven service that’s also targeted primarily to millennials.

The video below shows Watchable running on  Comcast's X1 interface for set-tops:

“The web has changed the way we all think about video,” Sam Schwartz, Comcast Cable’s chief business development officer, noted in this blog post. “A new class of online creators and producers is developing innovative content that is attracting big audience.  We want to continue to connect creators of compelling content with viewers who want to be entertained, and have been experimenting with new partnerships to deliver more high-quality videos from the web, especially to the television.”

Other content partners on board early on include Comcast corporate cousin NBCU, as well as CelebTV, Collective Digital Studio, Defy Media, Discovery Digital Networks, Fast Company, Flama, Future Today, GarageMonkey, Jukin Media, Machinima, Mashable, Mic Media,  Network A, Newsy, The Onion, POPSUGAR, Red Bull, Scripps Networks Interactive, Tastemade, TEN, TYT Network, and Video Detective.

All Watchable content is ad-supported, and is tied to an interface that lists content by categories spanning Auto, Entertainment, Fashion & Style, Food & Travel, Funny, Gaming, Music, News, Science & Technology and Sports.

“Over time, we’ll add additional network partners, make the experience more personalized, and include new options to share content with friends,” Schwartz added, noting that many of Comcast’s Watchable partners “have not traditionally had distribution on the TV and we can give them a path to reach new audiences and further monetize their content on the biggest screen in the home.” 

Comcast has been building out its advanced advertising capabilities through recent acquisitions of This Technology, Visible World and FreeWheel.

AOL and Publicis Groupe have inked an ad partnership for go90, Verizon’s new OTT mobile video offering.

The deal, they said, grants Publicis’ agencies and brand clients exclusive advertising inventory on go90 for three months beginning in the fourth quarter of 2015, and extends non-exclusively to the third-quarter of 2016. Publicis will also have first access to data segmentation capabilities and new ad units “with full creative support from testing through launch,” and early access to Verizon and AOL data management platform targeting in the first quarter of 2016.

Publicis’ partners will also gain access to a new program from  AOL called Head Start that will provide insight on the look and feel of go90’s user experience as new features are rolled out.

They announced the agreement at AOL’s Future Front event in New York City, kicked off in tandem with Advertising Week 2015.

Go90 recently debuted as an invitation-only beta.Announced content partners include New Form Digital, UphoricTV, ESPN, Comedy Central, VH1, Nickelodeon, MTV, Spike, Food Network, TLC, Discovery Network, NFL Network, HGTV, BET, Investigation Discovery, AwesomenessTV, Collective Digital Studio, Defy, Vice, Maker Studios, Machinima, Fullscreen, StyleHaul, and Tastemade.

“Publicis has been an important advertising partner for AOL for many years, and we are excited to be working together once again to bring new branding opportunities to their customers, as well as relevant and valuable advertising experience to mobile users,” said AOL president Bob Lord, in a statement. “The coming together of premium, curated video in go90, richness in data and automation technology will enable their advertisers to drive conversations with millennial-centric audiences that are, more and more, tuning in through the machine in their pocket rather than in their living room.”

“There is a significant opportunity that sits at the intersection of mobile, video and Millennials, and go90 was developed specifically to connect marketers into this interchange that is quickly becoming the primary screen,” added John Nitti, chief investment officer for ZenithOptimedia, which helped Publicis Groupe lock up the deal. “The consumption shift is rapid and we are happy to be leveraging the lion’s share of this premium real estate on behalf of our clients to help drive their competitive edge.”

Verizon completed its acquisition of AOL in June.

Publicis Groupe offers a a range of services spanning digital (DigitasLBi, Razorfish, Rosetta, VivaKi, Nurun), advertising (BBH, Leo Burnett, Publicis Worldwide, Saatchi & Saatchi), public affairs, corporate communications and events (MSLGROUP),  and media strategy, planning and buying (Starcom MediaVest Group and ZenithOptimedia). 

New Form Digital said it will develop and produce six scripted series for go90, Verizon’s mobile-first video service for millennial audiences that recently debuted as an invitation-only beta.

The following six original series will premiere on go90 over the next year, with 12-episode runs for each:

The Fourth Door: A fantasy adventure about a woman who wakes up in the embattled way-station between this life and the next; populated by mysterious and dangerous creatures who force her to face the past, present and future to save the man she loves. Created and directed by Tony E. Valenzuela.

#DoOver (working title): What if you could repeat the most important day of your life until you perfected it? Allison Lee gets more than she wished for when she's stuck repeating her epic 25th birthday bash which goes up in flames, over and over again. Created and written by Kathleen Grace and Shawn Dempewolff-Barrett.

Miss Earth (working title): An intergalactic sci-fi comedy following Victoria Young, a pageant queen on Earth, who takes the place of her battle-tested twin sister in a competition with all of humanity at stake. Created by and starring Anna Akana.

Mr. Student Body President (working title): A dark political comedy about an incredibly likable and charming teenage dictator. Ferris Bueller meets Frank Underwood. Created and directed by Ryan Hunter and Jack Ferry.

Cold (working title): A dramatic crime series about a teenage girl who seeks out her birth parents only to find that her separation from them occurred due to significant tragedy. In her efforts to uncover what really happened, she explores the town where she would have grown up, finding that although seemingly quaint - it is a place with many secrets. Created and directed by Emily Diana Ruth.

And one additional series to be announced shortly.

All of those series will be available on go90, starting with The Fourth Door in October 2015. 

Other announced content partners for go90 include UphoricTV, ESPN, Comedy Central, VH1, Nickelodeon, MTV, Spike, Food Network, TLC, Discovery Network, NFL Network, HGTV, BET, Investigation Discovery, AwesomenessTV, Collective Digital Studio, Defy, Vice, Maker Studios, Machinima, Fullscreen, StyleHaul, and Tastemade.

UphoricTV, an OTT digital service dedicated to the “global festival circuit,” said it’s poised to arrive this fall on go90, Verizon’s digital-first video service tailored for millennial audiences.

UG Strategies, in partnership with U.S.-based marketing company Corso Agency, announced the launch of UphoricTV today. UphoricTV will first be offered in the U.S. via go90, and plans to announce other domestic and international distributers and multi-channel networks over the next six to 12 months. UphoricTV said it will also broadcast via YouTube and other social media platforms.

UphoricTV said its focus is to provide an exclusive look into the world of music festivals, as well as coverage from food festivals, film festivals, and other “major global cultural destinations.”  Original fare will span artist and music content, behind-the-scenes footage, documentaries, and interviews.

Go90, a free, ad-supported service,  launched in invitation-only trial form earlier this month, and will later expand to other consumers.  Go90 will initially be offered on iOS and  Android-powered mobile devices.  Other announced go90 content partners include ESPN, Comedy Central, VH1, Nickelodeon, MTV, Spike, Food Network, TLC, Discovery Network, NFL Network, HGTV, BET, Investigation Discovery, AwesomenessTV, Collective Digital Studio, Defy, Vice, Maker Studios, Machinima, Fullscreen, StyleHaul, and Tastemade.

“After more than a decade of working with festivals from around the world, we have seen the demand for festival content rise exponentially,” said Parag Bhandari, CEO of UG Strategies, in a statement.  “Festivals of all kinds have become critical to pop culture, with enthusiasm for them rivaling that of major sporting events, each offering so much more than music and thus creating endless sources of creative and unique video content. UphoricTV’s debut on digital, ‘cord-cutting’ platforms such as go90, alongside major content providers like ESPN, Vice Media, Viacom, and others, manifests how important these events have become.”

“After 25 years in the festival experiential space, I cannot tell you how many fans have begged for us to let them in on what we know and what we see,” added David Corso, CEO of Corso Agency. “UphoricTV is the answer to their demands, and is perfectly aligned to strengthen the burgeoning global festival circuit. We’re excited to access our extensive network in music, entertainment and festivals to help bring this to life.”

NFL games and live concerts will be among the video fare offered by Go90, a free, “mobile-first” over-the-top offering from Verizon Communications targeted to millennials that will debut this week, according toThe New York Times.

Go90 is expected to be a free, ad-supported service that offers a blend of live and on-demand content. Though initially developed for mobile devices (the name of the service is about rotating a smartphone 90 degrees to view video in landscape mode), Verizon’s also noodling TV-based streaming strategies, the paper said.

Announced partners for Verizon’s new service include Discovery Communications, Vice Media, Scripps Networks Interactive, ACC Digital Network, Campus Insiders, CBS Sports, ESPN, 120 Sports,  Awesomeness TV, and AOL, which Verizon acquired in June. The New York Times noted that the offering will also feature shows from Comedy Central, NFL Network, Tastemade and Machinima.

Brian Angiolet, Verizon’s senior vice president for consumer products, told the  Times that Verizon struck mobile rights for specific shows rather than crafting deals that provide access to entire networks. Expanding on its NFL mobile exclusive, Verizon Wireless announced last week that all current and legacy price plans will include live streaming of Sunday local NFL games as well as Thursday Night Football, Sunday Night Football and Monday Night Football matchups, plus mobile streaming access to NFL Network.

Verizon’s new mobile video offering will be network-agnostic, but will “work best” on Verizon networks, Marni Walden, EVP and president of product innovation and new business at Verizon, said on a conference call in June. She also confirmed that “ad-sponsored data” will be part of the offering.

Variety reported that the launch of Go90 could happen as soon as Tuesday (September 8), noting that a splash page for the service showed a customer agreement that temporarily read: “Effective date: September 8, 2015.”

Verizon has been asked for further comment about the apparent imminent launch of the Go90 service.

Comcast, meanwhile, appears to be nearing the debut of Watchable, an ad-supported OTT service tailored for younger audiences, but has not announced a launch date for the service, nor confirmed that Watchable will be the name of the service when it does go live.

Indicating that the launch of Comcast’s new online video offering, dubbed Watchable, is drawing closer, Varietylocated a Web-based demo of the service and uncovered some additional details on what’s to come.

Comcast isn’t commenting on the apparent sneak preview, which looks to have been a beta demo that was left out in the open temporarily. The operator also has not announced a launch date nor confirmed that Watchable will indeed be the name of the service when it goes live.

But a person familiar with the plan said earlier that Watchable is being developed as a curated, ad-supported OTT video service that will be offered on Comcast’s IP-capable X1 platform, which is delivered on set-tops as well as browsers and mobile apps, and will also become available to non-Comcast customers. It’s expected to offer a variety of professional and semi-professional content from several sources, including Maker Studios, GoPro, Fullscreen, Vox Media (now backed by Comcast’s NBCU), AwesomenessTV, The Onion and Vice Media, and NBCU.

From that standpoint, it appears that Watchable will share similarities to go90, Verizon’s coming mobile-first, ad-supported OTT offering.

According to Variety’s spin with Watchable, the service emphasizes “editor-driven curation,” and featured playlists with labels such as “Obama Nation,” “Epic Fails” and “Foodie Delight,” but the demo version (a snap of the home page, posted by Variety, is shown above), did not include a section for user comments.

The report noted that the service initially for the U.S. audiences, though the help section indicates that Comcast is “working to bring Watchable to additional countries.”  Other content providers featured on the demo site included the Verge, Popsugar, iFood.tv, Machinima, Smosh, Jukin Media, Discovery Digital and Fox Sports Digital, Variety said. 

Go90, Verizon’s ad-supported “mobile first” OTT video service is inching toward its commercial debut, with a launch expected in the “coming days,” Bloomberg reported Tuesday, citing a person familiar with the situation.

Verizon has said previously that the service is poised for a late summer debut.

Update: Verizon has not pinpointed a launch date, but offered this statement: “Stay tuned, go90 will not be like anything you’ve seen from us before.”

In the meantime, Verizon has announced several content partners for Go90, including Discovery Communications, Vice Media, Scripps Networks Interactive, ACC Digital Network, Campus Insiders, CBS Sports, ESPN, 120 Sports,  Awesomeness TV, and AOL, which Verizon acquired in June and brings with it key programmatic advertising technology. 

According to Bloomberg, Go90 will start off with a smaller subset of content from partners such as AOL, DreamWorks Animation SKG, Awesomeness TV, Vice Media and Viacom.  That jibes with what Verizon CFO Fran Shammo said on the company’s second quarter earnings call last month: “It won't be the full entire of everything that we contemplate within the product set,” he said then.

Verizon Digital Media Services, Verizon’s cloud video unit, is expected to play a key role in the packaging and distribution of Go90.

“When I talk to our clients, one of the big priorities is how do they monetize and create value for their content online,” Bob Toohey, president of VDMS, told Multichannel News in a recent interview (subscription required). “We all know the ad dollar spend from TV to digital is moving and it’s just at the early stages. That’s where there’s a very large opportunity.”

Verizon’s coming “mobile-first” video service for millennials will be called Go90 and initially be launched under a free, ad-supported model, Varietyreported, citing details found on a pre-launch staging site that has since been taken down.

Before the site was removed from public view, Go90 was being characterized as a service that will offer “live music, exclusive events, best of web content, sports, prime time and more,” according to the report. "We wanted to create a mobile-first, video-based app that can keep up with you and your on-the-go social life, One that features completely immersive live and on-demand content, no matter where you are or where you’re going. No cord required."

Verizon hasn’t announced a launch date for the service, but company CFO Fran Shammo said on this week’s earnings call that it will debut in the “late summer” and that content from AOL, which Verizon just acquired, will also be featured.  However, the service “won't be the full entire of everything that we contemplate within the product set,” he said.

Other announced content partners for the coming service include Vice Media, Scripps Networks Interactive, ACC Digital Network, Campus Insiders, CBS Sports, ESPN, 120 Sports and Awesomeness TV.

The site discovered by Variety also featured content from others, including Victorious, GoPro and Vevo, and references to shows from Fox and AMC and NFL fare (Verizon has mobile distribution rights for NFL games and other content), but a Verizon official told the pub that not all content shown on the staging site is accurate.

Verizon has already said the mobile-first offering will include “ad-sponsored data” (expected to be so-called “zero-rated” content that won’t count toward a wireless sub’s monthly usage cap) and feature both live and on-demand content.  The service will be network-agnostic, but will be optimized for Verizon’s mobile network. Verizon will use bandwidth-friendly LTE multicast technology to deliver some live content.