Verizon execs Tuesday touted partnerships with A-list streamers, talked up their a slimmed-down media group and defended linear television even as traditional video subscribers continue to erode.
“We’re not going to have a hundred different type of offerings, but you know Discovery+ and Disney+, they are so-called Super A brands we want to work with. We will look for more of these [as we see customers] willing to upgrade and to migrate,” CEO Hans Vestberg said on an investor conference call following the release of fourth-quarter earnings.
The giant telco recently added Discovery+ to a roster of distribution partnerships that also includes Apple and Disney. “As the early cohort of Disney+ customers have come off of the initial free 12-month period, more than two thirds have maintained their subscription either through their Verizon direct billing relationship or by opting in to one of our newest Mix & Match plans with the Disney bundle included,” Vestberg said.
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The Disney bundle offered with select Verizon plans includes Disney+, Hulu and ESPN+. “We are happy with it on retention, and on the bottom-line side. We are making money from that” partnership. Disney reported 86.8 million subscribers to Disney+ as of December. Discovery+ launched in the U.S. earlier this month.
Verizon posted net income of $4.7 billion, a decline of 9.6% from fourth-quarter 2019, on revenue of $34.7 billion, about flat form the year earlier. The results were in line with Wall Street forecasts but the stock dipped as the company added fewer than anticipated new phone subscribers. Shares were down nearly 3% in late-morning trade. Execs said the pandemic kept consumers from stores and may have discouraged some from switching carriers.
There’s been some curiosity about the future of Verizon’s media business after it agreed to sell HuffPost to BuzzFeed (taking a $119 million write-down last quarter for the transaction). Vestberg insisted the media division, which includes Yahoo and AOL, is not on the block or being dismantled.
“We started this journey in 2018, re-assessing the overall strategy of Verizon Media Group and started to take out costs… The team has done an outstanding job,” he said. “We are in a position we are really happy with. We are now in the position where we wanted to be.”
Media posted fourth-quarter revenue of $2.3 billion, up 11.4%, representing the first quarter of year-over-year growth since the Yahoo acquisition in 2017 with gains fueled by strong advertising. Revenue from the demand-side ad platform grew 41% year-on-year. Execs cited political, consumer products, tech and retail. Daily active users for Finance and News grew, respectively, 52% and 11% for the quarter.
As cord-cutting continues its march, the company’s FiOS service, the No. 6 U.S. pay-TV operator, reported a fourth-quarter net loss of 72,000 pay TV subscribers. That was wider than the loss of 51,000 the year before and 61,000 in the previous quarter. Broadband demand remains healthy, though. Verizon added 92,000 net new internet customers, way up from 35,000 a year ago.
Asked if still makes sense for the company to continue offering a traditional bundle, Vertberg said yes, because the company wants its customers to have choice. “If they want DTC or linear or OTT they should be able to choose it.”
This article is auto-generated by Algorithm Source: deadline.com