Telecom giant Verizon on Tuesday said it lost 22,000 net pay TV subscribers for its Fios video service in the first quarter, compared with a loss of 13,000 in the year-ago period.
Fios competes with cable and satellite TV services. The subscriber losses were “indicative of the continued cord-cutting trend regarding traditional linear video bundles,” Verizon said.
Its broadband service added 66,000 subscribers in the first quarter. Verizon, looking to keep pace with a new wireless generation of cord cutters, has for some time planned to launch a live TV streaming service.
But during a morning analyst call, Verizon CFO Matt Ellis gave no indication on when any over-the-top TV service in the works will launch after a series of delays. “We’ve got that underway. We continue to look at OTT options. And as we continue to say, we’re not looking to launch a me-too product, but certainly expect to have an overall product offering…that will be compelling and meet their needs,” he said.
Ellis stressed that Verizon, as it competes against Netflix, Hulu and Amazon, aims to launch an OTT offering different from industry forerunners like AT&T’s DirecTV Now and Dish’s Sling TV. Verizon also needs to negotiate with the major studios and other producers for news, sports and entertainment content to drive its planned OTT offering.
And the phone giant is looking to align its upcoming video streaming service with Oath, which drives its media and advertising businesses.
CFO Ellis also reiterated that Verizon isn’t eyeing any major mergers or acquisitions to increase scale against rival phone and digital players. “I’m not going to say never, but in the foreseeable future, I don’t see this as the right time to jump in,” he told analysts.
Ellis touted recent deals like streaming video agreements for NFL and NBA matches to maintain and grow Verizon’s digital distribution partnerships while remaining an independent player without pursuing a major merger or acquisition.
After its acquisitions of AOL and Yahoo, Verizon last year created a new division, Oath, which encompasses all of its media and advertising businesses. Oath gross revenue for the quarter, excluding the impact of a new revenue recognition standard, decreased sequentially, as expected, by about 13 percent from the fourth quarter to $1.9 billion “due to seasonally lower display advertising performance.”
Verizon said that “the integration of the Oath assets is accelerating Verizon’s mobile-first media strategy and positioning it for global reach and future growth from premium content distribution and programmatic advertising capabilities across key verticals.”
April 24, 9:45 a.m. Updated with comments by Verizon CFO Matt Ellis made during an analyst call after the release of the company’s latest financial results.