Video customer erosion at Verizon Communications continued in the fourth quarter as the company shed about 51,000 Fios TV customers in the period, but wireless customers surged by nearly 800,000, fueled in part by a promotion around The Walt Disney Co.’s Disney+ streaming service.
The Q4 Fios video losses were slightly larger than the 46,000 Fios TV customers it lost in the prior year. For the full year, Fios lost about 225,000 video subscribers, ahead of the 171,000 it lost in 2018. Fios Internet customers rose by 35,000 in the period, compared to a gain of 49,000 in the prior year. For the full year, Fios internet customers increased by 141,000, behind the 195,000 additions it had in 2018.
Media segment revenue was flat for the period at about $2.1 billion.
In the wireless business, post-paid customer additions were about 790,000, well above average analysts’ estimates of about 525,000 additions. Many saw the surge as a direct result of the company’s decision to provide the Disney+ streaming service free for one year to its unlimited data wireless customers. Verizon started the promotion with the launch of Disney+ in November.
In a research note, Barclays media analyst Kannan Venkateshwar wrote that the Disney+ promotion likely had a greater effect on existing subscribers, but estimated it could have been responsible for between 200,000 and 250,000 new wireless customers in the quarter.
“While this is optically rather small relative to the 20 million Disney+ sub number, we do acknowledge that the sub tailwind was over only one month and it appears that the bundle has had a larger impact on existing account churn,” Venkateshwar wrote, adding that Verizon’s post-paid phone churn was much lower than its peers. “This would imply that the tailwind to Disney+ from Verizon came from existing VZ subs which could have contributed 3-4 million to Disney+ subs in the quarter overall.”