Verizon expands YouTube TV deal as Fios video losses continue in Q1

Verizon announced it has expanded its deal with Google and will sell YouTube TV directly to all its wireless and broadband subscribers.

Verizon will begin reselling YouTube TV on a wider basis later this year and, while the company didn’t specifically mention pricing or packages for the service, it did say it would “offer unique, high-value YouTube TV promotions to customers across platforms.” The YouTube TV offering will be targeted at Verizon’s wireless, 5G home broadband and Fios broadband subscribers.

Verizon CFO Matt Ellis said the new deal with Google gives his company the opportunity to combine YouTube TV with Verizon’s core wireless offering.

“[Ronan Dunne, president of the Verizon Consumer Group] and his team will make sure that’s relevant to our wireless mobility customers, having that additional functionality available to them,” Ellis said during today’s earnings call.

Today’s announcement somewhat confirms reports from last year that Verizon was looking to expand availability of YouTube TV to more of its subscribers after earlier setting a deal to provide the service to its new 5G home broadband subscribers.

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Pricing for any YouTube TV deal at Verizon will be of interest to consumers and investors considering that YouTube TV recently joined most of its competitors in the virtual multichannel video programming distributor (MVPD) arena in raising the cost of its entry-level service tier.

Verizon’s plans with YouTube TV reflect the slow but steady declines to Verizon’s Fios pay TV subscriber base. For its most recent quarter, the company reported a net loss 53,000 Fios video connections, which the company again attributed to the “shift from traditional linear video to over-the-top offerings.”

Verizon did add a net 52,000 Fios Internet connections during the quarter, but its total wireline revenues fell 3.9% year over year to $7.3 billion, as growth in fiber products was met by “pricing pressures on legacy products and technology shifts,” the company said. Total Fios revenues grew 3.6% year over year to $3.1 billion. Wireline operating loss was $88 million in the first quarter of 2019, and segment operating loss margin was 1.2%.