Verizon Wireless Hopes Content Companies Will Pay for Users’ Data Access

Wireless carrier launches 'FreeBee' sponsored-data beta test

Verizon Freebee
Courtesy of Verizon

Verizon Wireless has a new offer for media firms and advertisers: pay the freight for delivering video and other content so consumers don’t have to worry about racking up data charges.

The carrier has launched a 1,000-user beta test of FreeBee Data, a sponsored-data program that will let content providers opt to pay per-click or per-gigabyte fees to deliver mobile content to Verizon Wireless customers, who will not be billed for the usage.

How many takers Verizon will have for FreeBee is unclear, particularly because the telco did not announce pricing for the service. Content owners may balk at being asked to subsidize the cost of mobile bandwidth. Meanwhile, network neutrality advocates fret that such plans are unfair because it lets large companies set up the data equivalent of toll-free phone numbers to gain an advantage over smaller rivals.

Verizon Wireless currently does not offer an unlimited-data plan, so users must pay for any usage that goes above preset limits. AT&T last week introduced a new pricing plan for unlimited wireless data, but that’s available only for customers who have DirecTV or U-verse TV service, while T-Mobile’s Binge On feature exempts a select group of streaming-video services from data charges.

For the FreeBee beta test, Verizon said it has signed up Hearst Magazines, Gameday and AOL — which Verizon acquired last year — to sponsor some mobile content on a pay-per-click basis. The service lets companies sponsor up to 30 seconds of mobile video streaming (such as for movie trailers), up to 30 minutes of mobile audio streaming or an app download.

Hearst, for one, is eager to see how the toll-free data program might affect audience reach. “We’re excited to have Cosmopolitan, Esquire and Popular Mechanics be a part of the FreeBee Data trial,” said Brian Madden, VP of audience for Hearst Magazines Digital Media. “As we continue to see an increase in video consumption, especially on mobile devices, understanding the impact of sponsored data on viewership and sharing is particularly important to us.”

For pay-per-click campaigns, the FreeBee bee icon appears next to sponsored content to let Verizon Wireless subscribers know that when they click on that content they will not incur data charges. With the per-gigabyte model, businesses can sponsor some or all of their app or website.

“By building capabilities to help brands promote their content and applications, our new FreeBee Data service is a powerful tool designed to help marketers take an active part in consumers’ mobile lives,” Colson Hillier, VP of consumer products at Verizon, said in a statement.

The question is whether media companies will buy into Verizon Wireless’ new approach for making money from content delivery.