Verizon’s earnings show how difficult it is to attract new cable customers

Old TVs

Verizon’s first-quarter earnings out Thursday showed the number of new people signing up for cable TV is still declining.

The company added 36,000 new Fios video subscribers in the first three months of the year, representing a 60% decline year-on-year.

This should not come as a surprise, given the secular shift away from linear cable TV to on-demand streaming services that offer more customisation.

Verizon added 20,000 new video subscribers in the final quarter of 2015, its lowest in at least two years.

To address these declines, Verizon has invested in Internet TV.

New internet subscribers were also down, by 26.3% compared to the same period last year. The company noted that about 78% of consumer Fios internet subscribers were hooked on to data speeds of at least 50 megabits per second.

In wireless, Verizon added 640,000 new subscribers, matching forecasts.

On top-line profits, Verizon matched analysts’ expectations with $1.06 in earnings-per-share. Revenues totaled $32.2 billion, just shy of the estimate for $32.5 billion.

The company said its second-quarter earnings could come under pressure, given the timing of cost reductions amid labour contract negotiations. Last week, unions representing the company’s workers called a strike after about 10 months of negotiations.

Verizon made no comments on reports that it is the leading bidder for Yahoo’s core internet business.

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