Verizon insiders describe the fight to save go90, the video service that has spent $200+ million trying to catch the eye of millennials
go90go90's biggest hit so far has been teen drama "Guidance"The anticipation was palpable inside Verizon in the weeks leading up to the big launch.
The forthcoming video service, to be called go90, was a quarter-billion-dollar bet that Verizon could evolve from a staid telecommunications company into a hip, Netflix-like digital native - and everybody wanted a piece of the shiny new toy.
The top brass from Verizon's old guard jockeyed a bit with the executives at Verizon's new AOL internet business for control of go90, but eventually it fell under Verizon veteran Brian Angiolet.
And while some insiders were skeptical that a millennial-focused app trying to bridge the gap between YouTube and Netflix would be commercially viable, many on the team also saw the magnitude of the opportunity.
"What attracted me was the potential reach, turning on the firehose" of Verizon, a former go90 staffer told Business Insider.
But in the first few months after go90's October 2015 debut it became clear that the video service was not getting the expected traction, and the sentiment shifted inside Verizon from who could get the glory, to who would get the blame.
But building an internet startup within the giant telecom company is no easy task and Verizon's struggles are a case study in what can go wrong at the start. Go90's launch was hampered by a lack of focus at a company eager to spend cash, but without a clear understanding of its audience, according to more than a dozen current and former members of the go90 team interviewed by Business Insider.
Verizon has taken steps in the last year to try and rectify the situation, including hiring key executives with experience in online video, as well as a total overhaul the guts of Go90's technology, which debuted Wednesday, and is intended to fix some of the tech flaws that constrained the app.
That tech reboot came at a price: the firing of over 150 staffers in January, most of whom were the remnants of Verizon's ~$200 million acquisition of OnCue in 2014. These OnCue staffers never saw their internet TV product go to market, but were the force behind the original go90 tech and product.
Verizon is trying to close that chapter.
This, as go90 GM Chip Canter puts it, is "go90 3.0," and it's probably the app's last real shot to make it.
Just make it work
To understand why Verizon stumbled out of the gate with go90, a good touchpoint is a small team of around a dozen members, hired shortly after launch in New York to watch videos and input metadata.
When Verizon debuted go90, it had tens of thousands of videos ready for users to watch. Except, they weren't exactly ready.
Verizon ran into its first big go90 tech problem immediately. It was nearly impossible for people to sift through videos on the app, since they weren't tagged with enough data to make them easy to find. If the video wasn't being featured on the front page, it was lost in the swamp. The triage was to hire contractors, most in their early to mid twenties, to solve it with mainly brute force data entry.
That project was supposed to last for only three months, but stretched on over a year before finally being completed in December 2016.
Beyond the length, there was a haphazard and confusing nature to the whole operation, according to multiple members of the team. Partway through the metadata project, all the team's contracts were supposed to end, but it was clear the job wasn't complete. Management asked part of the team to stay on, but pretend like everyone was getting the axe.
"We all had to act like we were all leaving," one former contractor said. "They asked us not to say anything." Another former contractor confirmed that the half-dozen people on the metadata team who were staying on were told to lie, and act like the whole team was being let go.
From lying to coworkers to being unsure how long the project would last, it was an often baffling and disjointed experience for these contractors, and reflected an organization that was not prepared for the task at hand.
Guns blazing
Money was never the worry for the go90 team as it scrambled to create an advertising-supported video app designed to appeal broadly to "millennials."
The idea was to serve up a mix of original shows and content licensed from other web and TV outlets. With a big checkbook and little oversight, Verizon spent more than $200 million on programming for the service, according to a former employee with knowledge of the matter.
Multi-million dollar content deals were made quickly, sometimes for big packages of shows that would run multiple years, another source explained. "They overpaid a lot," the source said.
According to one former go90 staffer the large, rushed deals were a product of Verizon's corporate culture. There was a sense that if the budget was not used, that money might be lost.
"They went in guns blazing [and] spent all the money," a former employee said. The thesis was that if Verizon shelled out real money for quality shows, it would attract people to the platform. But the problem was that Verizon didn't have a thorough understanding of the marketplace at the start, a former staffer explained.
Many go90 employees also felt a lack of focus in the target audience, which a former staffer said was once represented by a blue balloon and a pink balloon during a meeting.
And the initial studios producing shows for go90 were varied in how they viewed the platform. Some cared about viewership and the long-term prospects of the app, while others saw it as an opportunity to churn out one-off shows and grab the cash.
The initial content push was not an immediate success in attracting a lot of viewers, but did produce a few hits, former employees said. Originals "Guidance" and "t@gged," a pair of high-school thrillers by Verizon investment AwesomenessTV, which appealed mainly to teen women, were touted as examples of what worked. Live sports, especially soccer, also proved popular.
But still, the general consensus on the team was, "Why would anyone come here?"
A different point of view
As the months wore on, however, go90's management seemed to get a better handle on how to approach the market, insiders said. This was fueled by key hires of execs like Chip Canter, Ivana Kirkbride to run content acquisition in Los Angeles, and Steve Woolf, who all had deep experience with online video in places like NBCU, YouTube, and AwesomenessTV.
Canter agreed that, to some extent, the original go90 mandate was also too broad. Based on what has worked, go90 is now doing more specific targeting in areas that have show promise: live sports (and original shows around sports), sci-fi and gaming, music, and dramas (primarily focused on young women).
It took some experimentation to understand that. "Some of the current-season TV that we thought would do really well" ended up flopping, Canter said, for example.
Go90 is also doing fewer "output deals," which are for an entire slate of shows, and instead looking at individual shows or franchises, according to Canter. This more granular view works in tandem with a desire by go90 execs to program the service more like an entertainment company, where one show leads to another.
A few isolated hits isn't going to cut it.
Another change in Verizon's thinking was to not being so maniacally focused on the smartphone.
"I don't think the position we will take over time is mobile-only," Canter said.
Young people are watching a ton of video on their phones, but the freedom to watch on any screen is valuable as well. In this change in sentiment, it helps go90 that Verizon is eyeing a 5G future, where things like watching actual TV on wireless data could be more common.
3.0
But apart from the content, one aspect that has plagued go90 since launch is "discovery," or how people actually navigate the app to find shows.
"The search functionality was very poor early on," one former employee said. "A lot wasn't searchable," another agreed. Go90 had tens of thousands of videos, but people were ignoring 90% of them, partially because of the tech.
Now Verizon has a new weapon it hopes will knock out a bunch of its go90 tech woes in one swoop: Vessel.
In 2014, Verizon bought OnCue from Intel for about $200 million, but never actually went on to launch OnCue's internet TV service. That San Jose team served as the backbone for go90. But in January, it was cut loose by Verizon, when the company laid off 155 people.
The reason: Verizon is betting that the tech team of another ill-fated video service, Vessel, will provide the needed spark for go90. It's a pivot to the "small, amazing [Vessel] team that we brought on," Canter explained.
Vessel, which was cofounded by former Hulu CEO Jason Kilar, and launched in early 2015, was widely praised for its recommendation and discovery engine. The problem was it simply failed to find a big enough audience for its $2.99-a-month subscription model built around YouTube stars.
In October, Verizon bought Vessel, which had raised over $130 million from venture capitalists, for an undisclosed amount. Verizon then shut Vessel down.
In the few months since then, the Vessel team has "rebuilt the entire [go90] service," Canter said, and the tech side is now run out of San Francisco instead of San Jose.
On Wednesday, go90 debuted the new tech, which Canter said will serve not just go90, but help fuel an entire suite of video apps Verizon will launch in the future. And while it does look different on the surface, many of changes aren't things users will see, but are rather features on the backend.
It's a "platform we can build upon," Canter said.
Time to get going
With "3.0," Go90 is at a crucial point in its existence. It has to distinguish itself - soon - as something that has long-term viability, as opposed to just something Verizon tried for a few years that didn't work out.
One former go90 staffer described the cynicism of some veteran Verizon content people, on the go90 team, who felt they had been burned before. These people thought that, after its initial stumbles, go90 would "slog around for two to three years, and then die" when the money ran out.
"If you try to do everything, you don't really do anything," one former go90 team member explained. There's no point in spending hundreds of millions of dollars if people can't watch it, or don't develop a specific love for your brand.
Now Verizon is hoping to shift that vibe back to optimism, with a clarity about what audience niches it's serving, and an ability for those audiences to easily find shows they'll like. The tech and the content are finally coming together, with specificity and personalization, Canter said.
At least that's the hope.
Go90 had over 2.1 million monthly active users in the US, on iPhone and Android, in February 2017, and grew 2.2x year-over-year, according to app analytics firm App Annie. (Verizon does not disclose user numbers.) But it will have to get a lot more than that to be considered a success.
This "3.0" reboot could be go90's last chance to get that right.