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The Many Generation Z Video Services Are Due for a Shakeup

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Can you tell Go90 from Fullscreen? Can you name one original production or star on YouTube Red? Do you know which of these has folded: Vessel or AwesomenessTV? (Vessel folded shortly after Verizon bought it.) If you work in the online video industry, you’ve probably heard of all of these online video services, bundles, and channels, which are aimed at that advertiser-coveted Generation Z demographic. But unless you’re a tween or teen, you probably don’t know much about them. I’m guessing even the target audience feels overwhelmed.

The big players include Go90, which is free and run by Verizon; Fullscreen, which is partly owned by AT&T and has a $6 per month subscription service (currently available for free to DirecTV Now customers); Watchable, which is owned by Comcast and also free; and YouTube Red, which costs $10 per month and lets subscribers skip YouTube commercials (I’ve heard that’s actually the chief appeal for paying customers). Several niche, over-the-top (OTT) services play to the same market, including Crunchyroll ($7 per month), Alpha (from $5 per month), and Seriously.TV and RatedRed, both of which are owned by Verizon Hearst Media Partners and are free.

From my terribly aged perspective, these could all be the same service. But do they really have a differentiation problem? To find out, I spoke to Brendan Gahan, founder of Epic Signal, a marketing agency that helps brands grow online audiences. Prior to that, he was vice president of brand strategy at Fullscreen, back before it joined with AT&T.

“For me personally, they blur together,” Gahan says, confirming my suspicion. He thinks they probably blur together for Generation Z viewers as well. But from his perspective, that’s only the first problem these competing offerings face. These services, built on subscription models, compete with a legion of free content that’s already available.

“If you’re a kid and you can see these guys every single day for free on YouTube, how do you convince your mom or dad to then go pay for the exact same thing?” Gahan wonders. “I could picture the parents being like, ‘You’re already watching so much TV. Why am I going to pay for you to watch the same content?’,” he says, especially when the parents may already pay for services like HBO, Netflix, and Hulu.

It’s a difficult value proposition to communicate: When there are plenty of YouTube stars with follower counts in the millions putting out multiple videos per week, why would a young person need to pay for exclusive content?

The next problem is that, even for the free ad-supported services, there are only so many hours in a day.

“There’s all kinds of stats about how many apps people are willing to use in a given day, and oftentimes people will download an app and then just keep it on their phone and never open it after the first time,” Gahan says. “It almost seems as though we’re always defying the odds and consuming more and consuming more and consuming more. I think these guys have a difficult job ahead of them and it’s by no means a slam dunk.”

If differentiation is the problem, then differentiation is also the solution. These services need to craft clear identities that are distinct from the competition. Right now, they’re all mobile-friendly bundles serving similar shows to young people. All their content looks like it came out of the same pitch meeting. That’s not enough.

“It seems like Go90 has been probably the one that’s done the most to build their brand, that to me personally is the most recognizable. I think that alignment with Verizon plays a big part in that,” Gahan suggests. Yes, Go90 is a recognizable brand, but it also just had layoffs and is reorganizing. Some have already written it off.

Good luck to it, because there’s a shakeup coming. Gahan compares the current crop of Gen Z video services to the YouTube competitors in the mid-2000s. Remember Revver, Google Video, and MetaCafe? YouTube had the lead, but these and other video destinations mounted a challenge. The market couldn’t sustain them all, and YouTube is the survivor. Likewise, only a few of today’s Gen Z services are going to find a lasting audience.

Thanks to their associations with Verizon and AT&T—and the built-in distribution that gives them—Gahan thinks Go90 and Fullscreen have the best shot. Quality content matters, but so does the ability to get in front of people.

“There’s clearly an opportunity in the market, but it’s not going to be for everyone. There’s going to be a few that will come out ahead,” Gahan predicts.

I can’t wait for that shakeup to occur, because once it does I’ll finally be able to remember all the players.

This article appears in the April/May 2017 issue of Streaming Media magazine as "Gen Z Video Services Are Due for a Shakeup."

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