FiOS TV Sub Growth Drops 83% in Q4

21 Jan, 2016 By: Erik Gruenwedel

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Cord-cutting is more than a talking point at Verizon.

The telecom Jan. 21 reported it added 20,000 net new FiOS TV subscribers in the fourth quarter (ended Dec. 31, 2015), down 83% from 116,000 net additions in the previous-year period. The telecom’s linear TV service saw year-over-year net subscriber additions fall 54% to 178,000 in 2015, compared with 387,000 in 2014. FiOS TV ended the year with 5.8 million subs, compared with nearly 5.6 million at the end of 2014.

“We are seeing slowing of market demand,” CFO Fran Shammo said on the company's fiscal call. “We are starting to see more and more customers coming into FiOS on a broadband-only basis, so just a single-play strictly with broadband.”

Verizon, which has been steadily shifting emphasis to its wireless business, sold wireline operations, including long-distance telephone, broadband and video, in 14 states for $8.6 billion to Frontier Communications. It expects to close the transaction at the end of the first quarter of 2016.

Last year, it acquired AOL, Millennial Media and launched the free go90 video app, underscoring the company’s wireless focus. Media reports suggest the go90 app has been downloaded more than 2 million times, which Shammo dismissed as immaterial compared to viewership.

“The key to us is not the downloads, the key is viewership,” he said. “I will tell you internally we have surpassed what we thought we would have at this point in time. We are encouraged by the use of go90, not only on the Verizon network, but off of the Verizon network as well.”

To combat criticism go90 and other wireless services ultimately want to tax subscriber data caps, Verizon Jan. 18 launched FreeBee Data, a new sponsored data service that enables wireless subscribers to stream content on their mobile devices without impacting their data limits.

Shammo said Verizon is working to eventually transition its lower-priced Custom TV platform, which includes select channels, Internet and telephone, to an over-the-top skinny TV bundle.

“Custom TV [in its current form] has a limited life, but you're going to see us refresh [it] and continue to do what consumers want, which is they don't want to have to pay for [channels] they never use.”

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