Verizon CEO Sees Decision on Online TV Service in 6 Months
Verizon CEO Sees Decision on Online TV Service in Next 6 Months
(Bloomberg) -- Verizon Communications Inc. will decide in the next six months how to deliver an online TV service, Chief Executive Officer Lowell McAdam said.
Although web-based TV is becoming “a crowded field,” the telecommunications giant needs to participate to take advantage of the advertising capabilities of its AOL and Yahoo! acquisitions, McAdam said Wednesday at Bloomberg’s Sooner Than You Think conference.
“An over-the-top platform is absolutely critical for us,” McAdam said. Verizon may offer the service in partnership with someone, he said. Even so, “there’s no big M&A planned for us.”
Verizon offers traditional pay-TV service over its fiber-optic lines in parts of the U.S., with 4.7 million subscribers, but growth has stagnated as competition heats up with streaming-video providers such as Netflix Inc.
In March, people with knowledge of the matter said Verizon was planning to unveil an over-the-internet TV service this summer to compete with Dish Network Corp.’s Sling TV and AT&T Inc.’s DirecTV Now. As of last month, Verizon was struggling to sign up TV networks to get the service started, people said.
AT&T gives mobile-phone subscribers a discount on DirecTV Now, an online collection of cable channels such as ESPN and HGTV. Google and Hulu LLC are among other companies selling web-based television.
Unhappy Investors
Verizon rose 1 percent to close at $47.25 in New York. The shares have fallen 11 percent this year, while the S&P 500 Index has gained 12 percent.
Long term, Verizon has its work cut out for it. Almost all Americans already have a wireless subscription or two, leaving little room for growth and putting pressure on the company to come up with a growth strategy for the future. Analysts project sales will fall this year.
The company is focusing on a media venture, Oath, that includes the assets acquired in the purchase of AOL Inc. and Yahoo! Inc. Verizon wants to challenge Google and Facebook in mobile advertising by building a big audience with streaming-video offerings like go90.
To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net, Olga Kharif in Portland at okharif@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Bruce Rule, Rob Golum