AT&T, Verizon see poor Q2 video results

AT&T, Verizon see poor Q2 video results
Michelle Clancy
| 26 July 2018

US telcos aren’t doing so well on the pay-TV front: Verizon lost 37,000 pay-TV subscribers in the second quarter of 2018, while AT&T saw big losses for its DirecTV satellite service.
Verizon 20 oct 2017
For Verizon, the IPTV loss is more than double the 15,000 it lost in the year-ago period. The company cited "pressures from cord-cutting of video bundles" as the reason for the acceleration in FiOS video losses.

On the broadband side, the Fios internet service added 43,000 subscribers in the latest quarter, marginally up from the 49,000 it added in the year-ago period.

Lowell McAdam, who is stepping down from his role as CEO next month and will be succeeded by chief technology officer Hans Vestberg, noted, "We are not going to be owning content. We are not going to be competing with other content providers. We are going to be their best partner from a distribution perspective, and that makes a lot of great sense." He added, "we are not fans of linear [content]”.

Verizon late last month said it would shut down its go90 video app, and the earnings reflect this: the carrier took a $900 million charge for the move. The adjusted second-quarter earnings included "a pre-tax charge for product realignment of $658 million, mainly related to the discontinuation of Verizon’s go90 platform and associated content, severance charges of $339 million, and acquisition and integration-related charges of $120 million, primarily pertaining to [digital division] Oath."

Oath, the unit created by merging Yahoo with AOL, keeps Verizon in the content business – for now.

For its part, AT&T’s DirecTV satellite offering meanwhile lost about 286,000 net subscribers in the period, although the U-verse IPTV service added about 24,000 customers.

However, it added 342,000 new customers to its over-the-top video service DirecTV, bringing the total to more than 1.8 million subscribers; even so, overall video gains across the three services were just 80,000.

In broadband. AT&T had a net gain of 76,000 IP broadband subscribers, but lost about 53,000 DSL customers, resulting in overall broadband customer growth of 23,000 in the period.

Overall, the Entertainment Group’s revenue was down 8% to $11.7 billion.