Verizon Eyeing Sports on Go90, AOL, Yahoo26 Jul, 2016 By: Erik Gruenwedel
On the heels of its $4.83 billion acquisition of dotcom pioneer Yahoo, Verizon further clarified its recent M&A shopping spree, which includes the $4.4 billion merger with AOL in 2015 and Millennial Media purchase earlier this year.
Speaking on a July 26 fiscal call, CEO Lowell McAdam said the telecom eyes “tremendous opportunity” in the digital mobile video marketplace, which he said could have an estimated addressable revenue market of $180 billion by 2020.
“Today, that marketplace is dominated by two brands [Google and Facebook]. Content creators and advertisers are hungry for alternatives as the market expands for both in-home and mobile consumption. Verizon intends to be a significant player in this space,” McAdam said.
Specifically, Verizon intends to mine Yahoo’s 1 billion monthly views — buttressed by the service’s improved analytics and ad tech capabilities — to enhance existing content holder’s distribution opportunities.
The telecom currently licenses select NBA and NFL content for mobile. It has exclusive rights to the Super Bowl. McAdam believes third-party TV networks, including regional sports networks, could sub-license content to AOL, Yahoo and go90 — the latter the telecom’s upstart ad-supported free mobile app.
With 113.2 million mobile users on both cell and tablet devices, McAdam said recent talks with NFL and NBA commissioners Roger Goodell and Adam Silver have been constructive.
“I expect over the next few months you'll see more details about the plan of what we can do with their content, not only in-season but out-of-season. And there are other sports leagues we have the opportunity to work with. We view this as a waterfall of content moving down through our different properties.”
Verizon’s focus on mobile distribution is due in part to continued downsizing of its pay-TV video bundles and increased consumer appetite for so-called “skinny” TV packages — the latter representing nearly 40% of FiOS video sales in the second quarter (ended June 30).
FiOS lost 41,000 video subs in the quarter, and 83,000 broadband customers. FiOS video penetration was 34.6%, compared with 35.5% in the prior year. FiOS Internet penetration was 40.1%, compared with 39.8% in the prior year.