Verizon continues to gain FiOS TV subscribers
In the prior parts of this series, we’ve been discussing Verizon’s (VZ) FiOS broadband service and how its Quantum broadband service could help it solve issues with slower Internet speeds during peak hours. Here, we’ll discuss another important business for Verizon’s Wireline segment—FiOS TV, its video service.
As the chart below shows, Verizon gained 100,000 net FiOS video subscribers in 2Q14. Although the pace of growth for Verizon has slowed down a little in the subscription TV market, it still continues to gain subscribers in an otherwise declining pay-TV market.
U.S. pay-TV market continues to decline
According to research firm SNL Kagan, cable, satellite TV, and telecom providers collectively lost 251,000 pay-TV subscribers in 2013. Although satellite TV companies like DirecTV (DTV) and Dish Network (DISH), as well as Verizon’s FiOS and AT&T’s (T) U-Verse pay-TV services, have gained a few subscribers, cable companies like Comcast (CMCSA) and Time Warner Cable (TWC) have lost too many subscribers.
The pay-TV market is undergoing a structural decline both in terms of subscriber numbers and customer satisfaction levels. This market is threatened by the phenomenon known as “cord-cutting.” “Cord-cutting” means viewers have stopped subscribing to traditional TV packages and are shifting to online video streaming providers like Netflix (NFLX), as they help save costs.