Verizon: Analyst sees 'amicable' strike deal, FiOS expansion, mobile media jump
"Both with and without Yahoo"
Things are looking up at Verizon: Re the strike by 39,000 CWA members, "a relatively low-key posture from both sides" suggests "a relatively quick, amicable settlement;" they're finally resuming fiber-network expansion -- a "major build" is starting in Boston: a new 5G service network, FiOS expansion, more business services -- writes investment analyst Barry M. Sine in a report for clients of Philadelphia-based brokerage Drexel Hamilton.
The bigger question, Sine adds, is how well the phone giant will connect its voice services for aging customers to its new mobile "Millennial-focused media strategy."
"Verizon is taking more new strategic intiatives," targeted at smartphone-based young viewers; but Sine notes some of his peers were skeptical -- does America need another original-media company just now? -- at Verizon's investor-day media presentations yesterday at its Basking Ridge, N.J. headquarters.
Sine says Verizon's media play is diverse but low-risk: The five-month-old go90 media-viewing platform. now enduring an AOL-based software rewrite, is popular; Verizon's AwesomenessTV (owned with partners Dreamworks, Hearst) leads among female-student viewers; Complex Media (with Hearst) has the same role with young men. VZ also owns stakes in SeriiouslyTV (comedy) and RatedRed (it's big in Texas).
Verizon notes that young people are watching less TV and migrating their views to watch the same shows (like Pretty Little Liars) on their phones -- a trend that gives mobile provider Verizon an edge over Fox, TimeWarner, CBS, Viacom and Discovery, all of which have lost viewers and stock-market value lately.
Does the company's future hinge on its expected offer to buy faded Web giant Yahoo? CEO Lowell McAdam told analysts his company "has plans to grow both with and without Yahoo," Sine tells us.
He says Verizon, with so many corporate partners, hasn't really invested enough to risk much in media: "It does not need to put Google and Facebook out of business to succeed."
The big step will be attracting enough young viewers to make Verizon mobile media worth advertisers' dollars. Sine questioned how Verizon will get its brand onto the new shared services; more young people access Go90 through T-Mobile, the cheap, youth-oriented phone company.
But "over time, heavy video viewing is likely to place a premium on network quality, an area where Verizon shines" and is upgrading with 5G, he concluded.