UPDATED at 9:30AM ET Matt Ellis, Verizon’s EVP and CFO, said the timing of the company’s planned launch of a new over-the-top video service is still being determined, but the company does still envision becoming a bigger video player.
“This is a space where we feel there is an opportunity for us to play,” Ellis said. “But we don’t want to launch another ‘me too’ service.” The offering will “probably be around live programming, but as to when we launch it’s TBD.” Verizon already operates the Go90 OTT service, though it has been viewed as a non-starter, and also has a partnership with Hearst in the young-male-skewing, video-rich digital brand Complex.
Ellis made his comments during a conference call with Wall Street analysts to discuss third-quarter results. Verizon reported net income of 89 cents in the quarter, flat with the year-earlier period but matching the consensus estimate of analysts. Total revenues came in at $21.6 billion, down 2.4% from a year ago.
Asked to provide an update on statements last month by CEO Lowell McAdam about an imminent video content partnership, Ellis said “we are continuing to work that particular transaction,” at the “dotting the ‘Is’ and crossing the ‘Ts’ phase.” As AT&T gets set to close its $85 billion acquisition of Time Warner, McAdam has said Verizon would also be pursuing content deals but likely through partnerships or investments rather than acquisition. He has dismissed speculation that Verizon could be a buyer of a major content player such as CBS or Comcast.
Ellis declined to weigh in on the imminent merger of Sprint and T-Mobile.
The company’s “wireline” unit, which includes FiOS residential video and broadband service, reported the addition of 66,000 net Internet connections and a loss of 18,000 net Fios Video connections. The losses exceeded the 15,000 in the second quarter and 13,000 in the first. In the third quarter of 2016, Verizon gained 36,000 video subscribers.
The company said the numbers reflect “the ongoing shift from traditional linear video to over-the-top offerings.” At the end of the quarter, Verizon had 5.8 million Fios Internet connections and 4.6 million Fios Video connections.
Despite the video subscriber erosion, total Fios revenues grew 4.8%, and consumer Fios revenues grew 4.6%, comparing this year’s period with 2016 and including the impact of two marquee pay-per-view events in the current quarter.
In the media unit, Oath (the new name for holdings including AOL, Yahoo and Huffington Post), revenues were $2 billion, and the company said the integration of AOL and Yahoo is “ahead of internal expectations.”