AT&T’s joint venture with Chernin Group and subsequent $500 million investment in content distribution network Fullscreen portend its future interests in media, according to Peter Csathy, CEO of business investment advisory Manatt Digital Media.
Verizon needed to make a sizable ripple in order to counter AT&T’s adjacent moves into similar territories.
“AOL gets distribution and access to unique user data at scale from Verizon in the US and Verizon gets content and ad monetization through AOL’s technology assets,” Videology’s Ferber said.
Csathy added that with AOL, Verizon could become “vertically integrated with a massive distribution platform to pipe heaps of content.”
"Clearly Verizon has been doing their own investments in content and video and I think our platforms offer real monetization potential for Verizon overall, so it's one of those things we feel very strongly about – that this is a very strong outlook for the systems and visions we’ve built," AOL Chairman and CEO Tim Armstrong, told AdExchanger.
Verizon’s acquisition of AOL could also help it monetize the former’s Video On Demand services like FiOS on Demand and FiOS TV, which has almost 6 million subscribers accessing more than 485 channels. Additionally, FiOS Internet enables about 9.2 million broadband connections and many customers watch live TV channels via the FiOS Mobile app.
Verizon has definitely experimented with advertising in these channels. For instance, it has sold ads alongside FiOS TV streams in select markets since 2009.
But Verizon’s growing push into content across all channels means it also needs to compete with digital-first companies like Google and Facebook (who are in turn encroaching into territory once held by the telcos), which is why Ferber expects more deal activity between telcos and ad tech platforms.
Google recently stepped up its own efforts in TV ad forecasting. It acquired mDialog, a video ad platform that connects DoubleClick buyers with over-the-top inventory from Amazon Fire, AppleTV and Roku. It also revealed early-stage trials for addressable ads via broadband service Fiber.
“One of Facebook’s claims to fame is they can tie devices together deterministically and Verizon can too, with the addition of AOL’s technology and platform layered on top,” Nail said. “I think that starts to shift the playing field a bit and maybe there’s a boost for Google Fiber if they can scale their broadband service. They probably figure if they don’t do it soon, their opportunity may be lost.”