First, the good news: the app for Verizon’s new mobile video platform Go90, launched last October, has already been downloaded more than 2 million times, revealed Fran Shammo, Verizon Communications EVP and CFO, during a call with analysts on Thursday discussing the company’s Q4 2015 earnings.
However, “the key to us is not the downloads, the key is viewership,” Shammo said.
“We’re looking at how many times individuals revisit the platform in one day and we’re starting to see some positives there,” Shammo added later. “People will come in multiple times during the day and that’s important because that’s what’s viable to the advertising community.”
But while Go90’s performance has surpassed Verizon’s expectations, both it and AOL — which the company acquired for $4.4 billion in June 2015 — are not likely to be profitable “within a one- to two-year horizon,” Shammo said.
Verizon has a lot of ground to cover, monetarily-speaking. As VideoInk noted earlier this month, Go90 reportedly spent upwards of $500 million to acquire one-year domestic first window exclusivity to original content for a year, doling out $180 million to AwesomenessTV alone and spending nearly $12 million on a six-series deal with New Form Digital. On top of that, Verizon spent roughly $100 million to market Go90 over the last quarter of 2015, with a campaign that encompassed both social platforms such as Instagram and linear television. Industry insiders have told VideoInk that, in 2016, Go90 will spend close to a billion dollars on content acquisition and begin developing its own slate of programming.
To achieve profitability, Go90 will continue to pursue a broad content strategy that “is favorable to all generations of population,” Shammo said. “Obviously, we have a lot of content there for millennials, but sports,” such as the NBA programming it added in November, “and music pertain to a lot more than just millennials, so we are attacking all viewership with this product. And we will have more to say about that probably midyear.”
In the meantime, there’s good news for AOL. Verizon reported that for AOL was up $300 million in Q4 2015 over the previous quarter.
“It goes to the strength of the advertising model under AOL, which is why we bought them,” Shammo said. “Now some of that is seasonal, but we believe that they will continue to have strong growth into 2016.”