Verizon CFO: Company’s Media Group is ‘Building Momentum’

Verizon saw promising results in the Verizon Media Group during the company’s third quarter (ended Sept. 30), according to company executives.

That business division is “building momentum in key areas,” Verizon CFO Matthew Ellis said on an earnings call Oct. 25. “We are migrating customers to our recently integrated native and demand side advertising platforms, with double-digit growth” seen from a year ago, he told analysts.”

Among the strongest signs: “For the first time, we are seeing mobile traffic increases outpace desktop traffic declines in our core owned and operated products, including sports, finance, news, entertainment, home and mail,” he pointed out.

Meanwhile, “although it’s early in the NFL season, customer engagement has doubled over a year ago in terms of minutes watched as more and more fans are using their mobile devices to watch games on Yahoo! Sports,” he said.

The company is also “diversifying our monetization streams in Media Group, including additional customer engagement opportunities on Yahoo! Sports and fantasy platforms and the launch of new integrated content-to-commerce capabilities,” he noted.

Verizon Digital Media revenue was $1.8 billion in the quarter, which was a 2% decline from a year ago, but represented “improvement in revenue trends,” he said, adding: “Gains in native and mobile advertising continue to be offset by declines in desktop advertising.”

Total Verizon revenue grew 0.9% to $32.9 billion, while profit increased 5.4% to $5.3 billion ($1.25 a share).

“We are focused on our 5G rollout strategy, looking to deploy next-generation networks while enhancing our industry-leading 4G LTE network,” Hans Vestberg, Verizon CEO and chairman, said in the company’s earnings release.

He went into more detail on Verizon’s 5G strategy once again on the call, telling analysts: “We’re now up to 15 markets where we have deployed our 5G Ultra Wideband” and the company is on track to reach 30 markets by year-end.  It’s continuing to deploy 5G Ultra Wideband in stadiums and is up to 13 National Football League (NFL) stadiums ready for 5G coverage, he noted.

The company is also preparing to launch the first 5G mobile edge compute center in the fourth quarter, he told analysts, noting that was “in progress, and we’re going to announce that later this quarter.”

Verizon Fios Internet net additions of 30,000 in Q3, meanwhile, were relatively flat compared to Q2 this year and down from a year ago, Ellis also said on the call. “Fios Video results continued to be impacted by the ongoing shift away from linear video offerings, with losses of 67,000” subscribers, he told analysts. But he added: “Our customers see value in our high-quality broadband offering paired with multiple choices for video through linear TV bundles or over-the-top options, such as YouTube TV and the recently announced Disney Plus” direct-to-consumer streaming service.

Vestberg called the recently announced deal with Disney in which all Verizon wireless unlimited customers, new Fios Home Internet and 5G Home Internet customers will get 12 months of Disney Plus for free a “win-win” for both companies. Disney Plus is scheduled to launch Nov. 12 at $6.99.