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Why Did Verizon’s go90 Video Service Fail?

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Verizon ends go90 video service

Verizon Communications (VZ) has decided to shut down its mobile video service, go90, starting in August this year, as the app could not attract young customers or generate sufficient ad revenue.

A soft response from Millennials led the wireless carrier company to discontinue its video service, which it launched in October 2015 for young users who prefer to watch videos online.

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Why did go90 not do well?

Verizon’s go90 enabled users to watch video on a mobile device regardless of the carrier. It offered premium content from top digital creators and offered sports, comedy, music, gaming, lifestyle, news, and entertainment events to attract young users amid a declining pay-TV subscriber base. Verizon, therefore, targeted cord-cutters and cord-nevers who had either moved from their cable subscriptions to web-based offerings or never used a cable service and solely relied on the Internet for videos.

According to a Cisco Systems’ Visual Networking Index report, global mobile data traffic reached 7.2 exabytes per month in 2016, which is expected to increase sevenfold by 2021 to reach ~49 exabytes per month, as we can see in the chart above. 

Verizon expected go90 to catch up with the booming online video streaming market through targeted video content and advertisements. However, the service failed to generate enough ad revenue. Verizon now plans for its media and advertising unit, Oath, which owns AOL’s and Yahoo’s online products, to focus on Verizon’s video operations going forward.

Rising demand for OTT content

The over-the-top (or OTT) online video streaming service has enormous growth potential. The rise of OTT content has driven subscribers away from traditional linear TV, primarily due to high monthly bills that users are paying to cable and satellite TV providers.

Currently, major players in the video streaming market are Dish TV’s (DISH) Sling TV, AT&T’s (T) DIRECTV Now, Netflix (NFLX), and Alphabet’s (GOOGL) YouTube.

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