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CFO Says Verizon Seeking OTT Option as Video Subs Depart

19 Oct, 2017 By: Erik Gruenwedel

Verizon continues to search for an over-the-top video business that is unique and an alternative in a growing market of online TV and subscription streaming video services, according to CFO Matthew Ellis.

If that sounds familiar, it is. Verizon in 2015 launched go90, the underperforming video app offering a selection of TV shows, movies, clips, and other streaming media.

Despite $80 million reportedly spent marketing go90, and another $200 million invested in the platform, average monthly users hover around 2.1 million per month.

Meanwhile, Verizon lost 18,000 Fios TV subscribers in the third-quarter (ended Sept. 30), to end the period with 4.6 million video subs. The telecom cited an ongoing shift from traditional linear video to OTT, as well as competitive promotional activity.

Speaking Oct. 19 on the company's fiscal call, Ellis reiterated CEO Lowell McAdam’s pledge to launch an OTT product in the near future.

“Look, this is a space where we think there is an opportunity for us to play,” he said. “We think that makes sense for us to play in that space, but we don’t want to launch just a me-too type product.”

The executive said any streaming product would likely revolve around online TV programming.

“But how and when we launch something will be [determined],” he said.

Prior to go90, Verizon partnered with Redbox bowing Redbox Instant, a hybrid SVOD/disc rental service that lasted less than two years.

Ellis stressed that regardless of OTT venture, having a requisite broadband infrastructure is paramount.

“When you move to over-the-top for your video entertainment, the quality of that broadband connection becomes more important than ever,” he said.

And Verizon added 66,000 broadband subs in the quarter, to end the period with 5.8 million Fios Internet connections.

“We continue to see strong numbers on the broadband side of the business, and as a result of that we are very confident that the Fios Internet offering will continue to be very strong in the marketplace,” Ellis said.


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