Verizon, Hearst Form Digital Video Joint Venture

Two initial channels, RatedRed.com and Seriously.TV, slated to launch this spring

Verizon Hearst joint venture

Verizon and Hearst have pacted on a 50-50 joint venture to create and launch digital-video channels with original programming aimed at younger, mobile-skewing consumers.

Under the newly formed Verizon Hearst Media Partners, the companies plan to launch two channels this spring: RatedRed.com, a lifestyle brand aimed at millennials in “red states,” and Seriously.TV, a news-comedy channel styled on late-night TV formats.

The companies would not reveal what they are investing in the JV. Both parties will invest capital into Verizon Hearst Media Partners, based in New York City, and contribute personnel and other resources. Verizon said it will bring technology, ad sales and distribution reach to the JV, coupled with Hearst’s digital video content and production capabilities.

Neeraj Khemlani, co-president of Hearst Entertainment & Syndication, said the time is ripe to establish new online entertainment outlets, likening the state of digital video today with the early days of cable TV. “Basically we’re watching history repeat itself,” he said. “When cable started you had the news channel, the business channel, the music channel. We’re in the first innings of building millennial video brands.”

Verizon plans to feed the JV’s channels into the Go90 ad-supported mobile-video service, with select programming distributed across AOL (which Verizon acquired last year). Content from the Verizon-Hearst channels also will be distributed on YouTube and other platforms and licensors, including potentially traditional TV networks.

To date, Verizon has been stocking Go90 with content licensed or acquired from media companies and digital studios. Now it’s going to have a more direct hand in producing mobile-oriented video for the service.

“As our platform for distribution expands, we wanted to shepherd the growth of these digital channels,” said Brian Angiolet, Verizon’s senior VP of consumer product and marketing. “This is an opportunity to get into the ground floor with audiences that aren’t adopting pay TV at all.”

In 2014, AT&T — Verizon’s chief rival — created a similar joint venture with the Chernin Group aimed at the digital-video space. Content from the Otter Media JV will be part of AT&T’s forthcoming DirecTV Preview free over-the-top service. In addition, Otter Media-owned Fullscreen is working on a subscription-streaming service, which is slated to debut in the second quarter, John Stankey, CEO of AT&T Entertainment Group, said at an investor conference Wednesday.

The two first Verizon Hearst Media Partners channels will target what Khemlani argues are “blank spaces,” with content for audiences underserved by the market.

RatedRed.com will be programmed for millennials from “the heartland,” with news, documentaries and scripted and nonscripted series spanning topics including music, food, outdoor life, military affairs, politics and faith. Seriously.TV will serve “comedic news updates” throughout the day as news breaks, which is especially relevant given that 2016 is an election year, Khemlani said.

The companies expect the channels to launch in time for the Digital Content NewFronts in early May, the annual series of presentations for advertisers and media buyers.

Hearst has invested in other millennial-focused digital players, with ownership stakes in Vice Media, BuzzFeed, AwesomenessTV and Complex. Those interests will be separate from the Verizon Hearst Media Partners business, according to Khemlani.