Consumer Insights

How Many Dedicated Content Channels Do Millennials Need?

It took traditional media outlets a few extra years to figure out that millennials don’t quite care for getting their news and entertainment from the same places their parents did, but now that the cat’s out of the bag on these consumers’ on-the-go smartphone habits, brands everywhere are scrambling for a piece of the mobile pie.

The question is: Do the companies engaged in this mad dash to conquer streaming millennial content even know what they’re doing?

It’s an oddly pertinent question given the recent announcement by Verizon and Hearst to launch, a millennial-targeted mobile content platform, The New York Times reported. Aimed at millennials “from the heartland,” RatedRed seems to be angling for a segment of millennial mobile viewers rather than the whole market at once. Its content will include blends of the usual millennial-preferred buckets (music, food, lifestyle, etc.), but its geographical focus also means politics, religion and military topics will be included. It’s a mix that Neeraj Khemlani, co-president of Hearst Entertainment and Syndication, believes can give millennials the authenticity in content marketing that they really crave.

“Every time there is a giant technology shift, you want something that is authentic to that new audience,” Khemlani told NYT. “The new generation wants new brands that reflect their views, their lens on the world. This is a forward investment into a new generation.”

Khemlani’s use of the word “investment” in this situation is peculiar, especially because many millennial-branded content channels have not panned out in the way their “investors” had imagined when the dough was first ponied up. The most noteworthy of those failed campaigns to capture millennials’ hearts and minds through streaming content was Fusion, the joint venture of Disney and Univison that tried to do for Hispanic millennials what RatedRed is attempting to do for Midwestern ones. Fortune reported in Dec. 2015 that Univison had filed documents with the Securities and Exchange Commission outlining the $17.8 million it had lost because of Fusion during the first nine months in 2015 alone.

It’s not as if Fusion was buzzing along with millennials before that, though. The platform’s 2014 losses over a similar period still hovered at $11.9 million. All of which was too much for Disney, which is reportedly looking for a way out of its multi-year contract with Univision — as much of a stake in Fusion’s heart as its lack of millennial viewers.

So, what’s behind Verizon’s and Hearst’s willingness to suddenly put their money and names on the line of a new millennial mobile content service when Disney and Univision, experienced media companies that have brought obscure projects to the forefront of pop culture conversations before, couldn’t make their content work?

While it might look like Verizon and Hearst are just rehashing an old idea, the biggest selling point for RatedRed might not even be the content at first but how it’s delivered. Verizon will be putting everything up on its new Go90 catch-all mobile media app, and everything its prospective millennial viewers watch through Go90 won’t count against their data allowances, making RatedRed a completely free, no-risk experience for new viewers.

“With one in three Americans now watching videos on their smartphone and another 100 million on tablets, the business case for mobile is clear,” Colson Hillier, vice president of consumer products at Verizon, said in a statement. “In today’s digital economy, [free data through Go90] is a departure from the one-size-fits-all approach to marketing. The opportunity to add value and utility to consumers’ everyday experiences will fundamentally transform how brands and businesses connect with their customers.”

Before it even launched, Verizon and Hearst have removed an important obstacle in the way of data-hamstrung millennial viewers. All they need now is something millennials will actually care about watching.


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