Verizon TV growth slowed in 2009

Most of Tuesday's early reports on the fourth quarter and 2009 full-year earnings for Verizon Communications focused Verizon's huge Q4 and full-year net income drops. Even during a tough stretch, the company's TV service continued to find new subscribers, adding 153,000 customers during the final quarter of 2009. However, the news is not all good there either. Verizon's FiOS TV service experienced its slowest quarter of 2009 in Q4.

In terms of TV customer additions, Verizon's 2009 went like this: 300,000, 299,000, 191,000, 153,000. I think this is what they call a downward trend.

In fact, the 153,000 addition for Q4 2009 represent Verizon's worst quarter of TV subscriber gains in at least two full years, possibly longer. If you are look for some positive news in all this, it's that Verizon is getting very close to reaching 3 million FiOS TV subscribers, having finished 2009 with 2.9 million total.

The news could be worse, of course. At the beginning of the recession, there was real uncertainty concerning how then new telco TV services would fare: Would subscriber growth ground to a halt? Would telcos drastically pull back on their efforts to deploy and market these new services?

None of that happened, and though the slowing growth over recent quarters has been painful to watch, at least subscriber growth and service expansion have continued. The next challenge for telco TV providers is to figure out how to make these services part of a bigger growth scenario. Verizon is among telcos that have embraced their new telco TV image and look at TV, both alone and in the scope of a triple play bundle, as a key component of its new business model. But, growth in TV subscribers and revenue during 2009 didn't save Verizon from bottom-line doldrums, so it's time to start exploiting the new revenue possibilities of telco TV, either through new local ad revenue sources, premium applications, TV Everywhere-style premium subscriptions or something else.

We'll be able to formulate a broader assessment of the current status of telco TV in the U.S. after this Thursday, when AT&T is due to report its own fourth quarter 2009 numbers.

-Dan

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