Verizon Teams Up with Vice for New Video Service

Verizon Communications Inc. (NYSE:VZN) has struck a deal with Vice Media to license food, travel and tech programming, the carrier's latest content deal as it prepares for its upcoming mobile video service.

Vice will supply curated content from its existing digital channels, as well as create new content exclusive to Verizon's service. The financial terms of the multiyear deal weren't disclosed.

Verizon has been licensing programming aimed primarily at millennials and younger viewers ahead of the launch of its mobile video service later this year. The carrier also has agreements with AwesomenessTV, a content producer popular among teens, and several sports networks for live streams of college games. Verizon's recent $4.4 billion acquisition of AOL Inc. was in part to support the advertising feature of its mobile video service.

Verizon is joining the rush of companies that are setting up video services as more viewers watch videos and television on mobile devices and streaming services instead of paying monthly cable subscriptions. Vice Media has also seized on the opportunity signing content partnerships with companies from Spotify and HBO as well as various licensing deals for its content in several countries in Europe, Asia and Latin America.

Founded in 1994 as a punk-rock magazine in Montreal before expanding into online content, Vice has succeeded in attracting younger, mostly male, viewers -- an audience coveted by advertisers. Its programming runs the gamut from war reporting to music reviews to documentaries about the global drug and sex trades.

In March, Vice signed a deal with HBO to dramatically expand its programming there, increasing the number of annual episodes of its documentary news program to 35 from 14, plus adding a five-day-a-week, 30-minute news broadcast. Vice will also have a daily newscast and a branded channel on HBO's Internet streaming service, HBO Now.

Vice signed an agreement in May with Spotify to provide short-length video for the music site's new video service. It also inked an agreement with Samsung to provide exclusive content for a mobile video service for Galaxy users.

The video upstart also may be on the verge of getting its own channel. A+E Networks -- which owns a 10% stake in Vice — is trying to get an agreement with cable and satellite providers to turn its History channel spinoff, H2, into a Vice channel, people familiar with the matter have said. But some providers haven't yet signed on and the deal remains on hold.

Verizon's upcoming video service will be available to anyone with a mobile phone, even those who aren't Verizon customers. The carrier has said the service will have some free content that is supported by advertising, some that counts against a user's data plan and some pay-per-view for live events.

The live events on its new service will be supported by a technology called multicasting, which allows the carrier to broadcast a single video feed from cell towers to cellphones in the same way old fashioned broadcast television functions. That will allow the carrier to stream things like concerts and sporting events without causing congestion on the network.