Verizon and Hearst to Create TV for Mobile Millennial Viewers
Seeking to entertain the elusive millennial, Verizon Communications and Hearst announced on Wednesday the formation of a joint venture to develop programming for young adults to watch on their phones.
Called Verizon Hearst Media Partners, the enterprise will kick off this spring with two channels: RatedRed.com, aimed at "millennials from the heartland," with programming about music, food, outdoors, politics, military and faith, and Seriously.TV, offering a comedic take on current events at the speed of breaking news. Other networks are planned.
The programming is intended for viewers to watch on mobile devices and will be available via Verizon's Go90 streaming service and also on computers and TV.
The partnership brings together the technical know-how of Verizon, the telecommunications company that has been expanding into entertainment and advertising technology with the start of Go90 and recent acquisition of AOL, and the expertise of Hearst, the traditional media company that has made a number of investments in digital outlets. Hearst owns stakes in the cable TV networks ESPN and A&E, publishes the magazines Cosmopolitan, Elle and Esquire and also has invested in digital brands including Buzzfeed, Vice and AwesomenessTV.
Verizon Hearst Media Partners is a 50-50 venture, and both companies are investing capital. The companies are recruiting new management and staff for the service. Advertising sales and ad technology will be handled by Verizon. Other terms were not disclosed.
"Every time there is a giant technology shift, you want something that is authentic to that new audience," said Neeraj Khemlani, co-president of Hearst Entertainment and Syndication. "The new generation wants new brands that reflect their views, their lens on the world. This is a forward investment into a new generation."
The venture lands in a crowded market of streaming services and other entertainment offerings, all trying to appeal to millennials. This generation, born between 1980 and 2000, is highly desirable to advertisers yet is abandoning traditional media. This week, for example, Verizon's rival AT&T said that it planned a new streaming TV offering that would not require a subscription to a traditional pay TV service. The development comes after AT&T's $48.5 billion takeover of the satellite company DirecTV last year. The satellite provider Dish Network last year introduced a similar offering called Sling TV.
HBO, Showtime and CBS have introduced stand-alone streaming offerings that do not require subscriptions to pay television. Univision and Disney started the joint venture Fusion, an English-language digital news service and cable channel aimed at millennials. And Time Inc. recently started Motto, a site for younger women.
It is still early days for many of the ventures, and the viability of the businesses remains to be seen.
Verizon did not disclose subscriber counts or viewership numbers for its Go90 offering, which was introduced in the fall. Brian Angiolet, Verizon's senior vice president of consumer product and marketing, said the service has had a strong start, bolstered by the new programming it continues to add to its offering of live events, prime-time TV and original web series. In November, for instance, Verizon formed a partnership with the National Basketball Association.
Mr. Angiolet said Go90 viewership patterns have shown that original digital series are equal to traditional brands in enticing young viewers, encouraging the company to strike a partnership with Hearst to develop more networks.
"At a growing rate, that audience is never building an affinity with a pay TV network or brand — that is the opportunity," he said.