Yahoo Finance Verizon Enters into Deal with the NBA for Verizon’s go90
Mid-November Updates: What's Happening in the Media Sector?
Verizon’s deal with the NBA
On November 4, 2015, the Wall Street Journal reported that Verizon Communications (VZ) has entered into an agreement with the NBA (National Basketball Association) for offerings on its mobile video service, go90, which was launched in October 2015. Verizon’s go90 is a free, ad-supported service that features short-form content. The service has already secured a major advertising commitment from Publicis Groupe SA (PUBGY).
Verizon’s deal with the NBA is a multi-year deal. As part of the deal, go90 will show original content from the NBA stable, offer game highlights, and provide access to “live out-of-market games through NBA League Pass.”
This deal is another step for Verizon to attract teenagers and young adults to its mobile video service.
Verizon’s driving rationale
Apart from generating advertising revenue, the service is expected to positively affect the data usage of the telecom (telecommunication) company’s wireless customers. The growth of video traffic is expected to be robust in the United States (SPY) in the medium term.
According to Cisco’s (CSCO) VNI (visual networking index) forecast, video in the United States represented ~60% of overall mobile data traffic in 2014. According to the forecast, this video traffic is expected to rise annually at an average rate of ~54% during the 2014–2019 period.
Comparing Verizon’s go90 with other OTT offerings
During the Wells Fargo Technology, Media, and Telecom Conference held on November 10, 2015, Verizon Chief Financial Officer Francis Shammo highlighted the differences between go90 and the OTT services of Netflix (NFLX) and Hulu related to duration and content type.
Shammo also stated that “Hulu and Netflix are really more over-the-top linear TV products” whereas “go90 is a mobile-only product…very different,” focusing on “short clips.” Shammo also mentioned that Netflix and Hulu do not “do anything live,” adding that this is “not what go90 is meant for.”
Verizon Communications (VZ) makes up 1.69% of the SPDR Dow Jones Industrial Average ETF (DIA). The same ETF also holds 4.45% of The Walt Disney Company (DIS).
In the next and final part of this series, we’ll look at The Walt Disney Company’s latest initiatives.
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