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Telecom giant Verizon on Thursday reported that it lost 51,000 net pay TV subscribers for its Fios consumer video service in the fourth quarter, compared with a loss of 46,000 in the year-ago period and a loss of 67,000 in the third quarter.
The company also added more mobile phone subscribers who pay a monthly bill in the fourth quarter than expected thanks in part to its Disney+ promotion. Verizon added 790,000 customers to such plans, up from 653,000 in the year-ago quarter and estimates of around 525,000.
Verizon, led by CEO Hans Vestberg, did not say how many of its users have taken advantage of the telecom giant’s deal with Walt Disney’s Disney+ streaming service. Management had previously said that the deal has exceeded the firm’s expectations. Disney said, a day after the service’s November launch, that it had hit 10 million sign-ups.
The companies’ agreement gives some of the phone giant’s wireless and internet customers a year of Disney+ for free. The offer applies to Verizon’s wireless unlimited customers and new Fios internet and 5G home internet customers. Approximately 17 million Verizon wireless accounts are unlimited, and “a pretty significant number” of those are expected to take advantage of the Disney+ offer, Verizon previously said.
Management on Thursday’s earnings conference call said it was pleased with the early uptake of Disney+, mentioning that phone net adds and other metrics were higher in the latest quarter. Vestberg also touted the benefits of strategic partnerships like the one with Disney, highlighting that the company had its highest wireless phone net additions since 2013 last year.
For all of 2019, Verizon lost 225,000 Fios video subscribers in its core consumer unit, compared with 171,000 in 2018. The company cited “the ongoing shift from traditional linear video to over-the-top offerings.”
Fios, which competes with cable and satellite TV services, ended 2019 with 4.15 million total video subscribers in its consumer unit and 77,000 in its business unit.
Analysts said costs and revenue related to the Disney+ deal also played into fourth-quarter financials. Adjusted earnings per share, excluding special items, rose to $1.13 from $1.12 in the year-ago period, slightly below Wall Street estimates. Revenue rose 1.4 percent to $34.8 billion, just ahead of Wall Street estimates.
The Verizon Media unit, which includes the likes of Yahoo and HuffPost, posted revenue for the fourth quarter of $2.1 billion, nearly unchanged from the year-ago period. “This is a meaningful improvement from the decline reported at the beginning of the year,” the company said. “Gains in native advertising and the demand-side platform continue to be offset by declines in legacy desktop search revenue streams.”
Verizon for the fourth quarter also took another goodwill impairment charge of $236 million related to its Verizon Media unit after recording a $4.6 billion writedown in 2018.