Verizon Loses 81,000 Pay TV Subscribers, Media Unit Revenue Hit by Pandemic

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Verizon CEO Hans Vestberg

The telecom giant's Verizon Media unit posted a 25 percent revenue decline "primarily as a result of COVID-19 related impacts."

Telecom giant Verizon on Friday reported that it lost 81,000 net pay TV subscribers for its FiOS consumer video service in the second quarter, compared with a loss of 52,000 in the year-ago period and a loss of 84,000 in the first quarter.

The company cited "the ongoing shift from traditional linear video to over-the-top offerings." It ended June with nearly 3.99 million video subscribers.

Verizon also added 10,000 net customers for the FiOS internet service, which after a 59,000 customer gain in the first quarter was affected by "temporary restrictions put in place on work inside customers' homes." That meant the company ended June with a total of 5.97 million internet subscribers.

This earnings season is covering results for companies' second quarter of 2020, which includes the first full three months worth of pandemic fallout.

Verizon had early in the pandemic said that U.S. video game usage during peak hours went up 75 percent, while video streaming increased by 12 percent. 

Verizon, led by CEO Hans Vestberg, did not say on Friday 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.

The Verizon Media unit, which includes the likes of Yahoo, AOL and HuffPost, posted revenue for the second quarter of $1.4 billion, down 24.5 percent from the year-ago period. The firm said this was "primarily as a result of COVID-19 related impacts."

Management on Friday's earnings call said the unit had seen revenue trends improve a bit in June and forecast a third-quarter revenue decline in the teen percentage range.

Overall second-quarter revenue fell 5 percent to $30.4 billion, exceeding Wall Street estimates. "This decline was primarily the result of significant declines in wireless equipment revenue in the consumer and business segments, primarily due to limited in-store engagement and the impact of COVID-19 on customer behavior," the company said. Verizon, which temporarily closed its retail stores, said that at the end of June roughly 60 percent of its stores were open. 

Second-quarter earnings rose from $3.9 billion, or 95 cents per share, to $4.7 billion, or $1.13 a share. Adjusted earnings per share fell from $1.23 to $1.18, but came in ahead of analysts' expectations.

Verizon recently joined the growing #StopHateForProfit campaign, with the telecom giant pledging to pull its ads from Facebook and its Instagram. "We have strict content policies in place and have zero tolerance when they are breached, we take action," Verizon’s chief media officer John Nitti said in a statement. "We’re pausing our advertising until Facebook can create an acceptable solution that makes us comfortable and is consistent with what we’ve done with YouTube and other partners."

Vestberg said in Friday's earnings report: "We remain focused on our strategic direction as a technology leader, quickly adapting to the new environment and providing our customers with reliable and vital connections and technology services, while working to keep our employees safe and accelerating our 5G network deployment. We have embraced, engaged in and responded to important social movements happening throughout the world, and will continue to be at the forefront of initiatives that move the world forward for everyone."