Verizon Loses 18,000 Pay TV Subs, Signals Delay for Live TV Streaming Service

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Verizon chairman and CEO Lowell McAdam

The telecom giant, which earlier in the year closed its acquisition of Yahoo, provides updates on a planned online TV service and possible content deals.

Telecom giant Verizon on Thursday reported that its FiOS video service lost 18,000 net pay TV subscribers in the third quarter, compared with the addition of 36,000 subscribers in the year-ago period and a 15,000 subscriber drop in the second quarter.

The company said the drop in the latest quarter was "reflecting the ongoing shift from traditional linear video to over-the-top offerings." Verizon, led by chairman and CEO Lowell McAdam, ended the third quarter with a total of 4.6 million subscribers to its FiOS video service, which competes with cable and satellite TV companies.

Verizon earlier this year closed its acquisition of Yahoo to form, together with AOL, its new Oath unit. Oath expects to realize more than $1 billion in  operating expense synergies through 2020, the company has said.

Verizon, after previously acquiring AOL and Millennial Media and last year launching millennials-focused mobile video service Go90, has said millennials remain a core focus for the company. It also previously acquired a stake in AwesomenessTV and partnered with Hearst to jointly acquire male-focused media company Complex.

Verizon CFO Matt Ellis was, on Thursday's earnings conference call, asked about recent McAdam comments about a planned big content partnership after T-Mobile unveiled one with Netflix. "Now we’re putting together some content deals that we like that will not only play across the Oath assets but play across mobile and play across FiOS as well," McAdam had said. "We are continuing to work that particular transaction," which has progressed more slowly than thought, Ellis said Thursday.

Asked about a planned over-the-top (OTT) TV service from Verizon, Ellis said that the company continues to feel that "there’s an opportunity for us to play,” but signaling a delay, he emphasized that the company “doesn’t want to launch a me-too product."

He didn't provide any guidance on when the OTT service would launch, saying that was still "TBD" (to be determined), or what content it could offer beyond saying it was likely to be built "around live programming."

When questioned about the planned combination of Sprint and T-Mobile U.S., Ellis said he wouldn't comment "on other people’s business," but reiterated that Verizon feels that “we have the right set of assets to compete."

Verizon also reported Thursday that it added 66,000 net new FiOS broadband connections in the third quarter to end it with 5.8 million.

Verizon reported quarterly earnings of 89 cents per share, in line with the year-ago result, or 98 cents per share on an adjusted basis on revenue of $31.7 billion, up 2.5 percent.