Verizon’s Fios video customers
Verizon (VZ) Fios is a fiber-optic network service that provides Internet, voice, and video services. Fios subscribers have been contributing significantly to the company’s wireline segment revenue, which declined ~1.6% YoY (year-over-year) to $7.6 billion in 1Q18. Excluding the effects of new revenue recognition standards, its total wireline revenue fell ~1.8% YoY.
While Verizon’s net Fios Internet connections have been growing, the mobile operator has seen a net loss of Fios video connections over the past five quarters. Intense competition from popular and less expensive OTT (over-the-top) video streaming services has dented Verizon’s Fios video connection growth.
In 1Q18, Verizon reported a net loss of 22,000 Fios video connections. At the end of the quarter, Verizon had 4.6 million Fios video connections—flat quarter-over-quarter but down ~1.8% lower year-over-year.
The OTT market
OTT providers deliver video streaming services directly to users over the Internet at a cheaper rate than cable or satellite providers. The growing popularity of OTT offerings has impacted traditional pay-TV subscriber growth, with many customers opting to “cut the cord.”
Netflix (NFLX), Amazon (AMZN) Prime Video, and AT&T’s (T) DIRECTV Now are major players in the video streaming market. In 1Q18, Netflix added 7.4 million customers, while DIRECTV Now gained nearly 312,000 subscribers.
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