Verizon Communications Inc. fired a fresh salvo at Netflix, Inc. with an exclusive NBA deal for its ad-supported Go90 mobile video app. The agreement will bring daily league highlights, and give Go90 access to some live games, the New York Times reported on Wednesday.
Following the tie-up, Verizon will now become the official wireless provider of NBA, and also the title partner of the NBA All-Star Slam Dunk contest, the Times reports.
The deal is reportedly valued at around $400 million and will run for three years, according to people familiar with the transaction.
Go90 Bets Big on Live Sports
“Go90 is really targeted at the young, millennial, tech-savvy subscriber, and that is something that we are also hoping to reach,” William Koenig, president of global media distribution for the NBA, said. “We’re really trying to get our games out there to people on whatever device they want to consume them.”
Verizon Communications Inc. launched Go90 more than a month ago with a mix of prime-time TV and live events. The service is primarily targeted at the Gen Z and the Millennials, about 75 percent of whom turn to mobile as their first source of video content. The app is free, and is available to all mobile users regardless of whether they have a Verizon connection.
The U.S. wireless carrier is trying to create a distinct identity for Go90 in the super competitive streaming space that is currently dominated by Netflix, Inc. . And increasing its sports content is a step in that direction.
“We have the opportunity here in the mobile world to go in and work with the leagues, and work with certain networks to bring just the live sports,” Brian Angiolet, senior VP for product at Go90, said. “People ask why Go90 is different than Comcast’s Watchable, YouTube, Netflix and Hulu. Live sports is one major reason why.”
Morgan Stanley Endorses Verizon Content Push
Morgan Stanley analyst Simon Flannery believes Verizon Communications Inc. ’s line up of new products should address changing demand patterns, and help the firm maintain growth. In a recent note to client, the analyst said that addition of new content to Go90 should make the service an attractive proposition.
Morgan Stanley rated its shares as “Overweight” Wall Street however is divided on the stock’s prospects. Out of 34 analysts who cover Verizon, 16 have a Buy call, while 16 recommend a Hold. The consensus price target is $50.56.
Shares of Verizon Communications Inc. closed Tuesday at $46.47. Netflix, Inc. ’s stock ended yesterday’s trading at $109.74.