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Telecom giant Verizon on Wednesday reported that it lost 62,000 net pay TV subscribers for its FiOS consumer video service in the second quarter, compared with a loss of 81,000 in the year-ago period and a loss of 82,000 in the first quarter.
The company has in the past often cited “the ongoing shift from traditional linear video to over-the-top offerings” as a key driver of video subscriber declines.
Verizon, led by CEO Hans Vestberg, gained 92,000 consumer broadband internet subscribers, compared with 10,000 in the year-ago period. “The company’s trailing 12-month total FiOS internet net addition performance is the highest since 2015,” the company highlighted.
The telecom giant has been shifting its video focus away from FiOS TV to partnerships with third-party streaming services as it positions itself as a key distribution platform for them. For example, Verizon has a deal with The Walt Disney Co. for the Disney bundle, which gives customers with select Verizon wireless unlimited plans access to Disney streaming services Disney+, Hulu and ESPN+.
The Verizon Media unit, which includes the likes of Yahoo and AOL, posted second-quarter revenue of $2.1 billion, up 50 percent from the year-ago $1.4 billion and up 13 percent from the pre-pandemic second quarter of 2019. “Media continued its recent trends and delivered strong performance driven by high customer engagement with its brands and demand for its advertising platforms,” the company said.
In May, Verizon struck a $5 billion deal to sell Verizon Media to private equity firm Apollo Global Management. The new company will be called Yahoo and will continue to be run by CEO Guru Gowrappan, with Verizon retaining a 10 percent stake.
“We are excited about our momentum leading into the second half of the year,” said Vestberg, adding the company was “on track to close” the Verizon Media transaction.
During Wednesday’s earnings conference call, Vestberg discussed what he called Verizon’s “unique” strategy of teaming with content partners that have brands that “we really think resonate with us.” He added: “We use the best network, the best distribution and the best brand to work with, companies like Disney+ etc., to give our customers a premium experience on top of the differentiation we already have.” That provides a chance to make these customers into “paying customers” and get Verizon its share of “incremental” revenue.
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