The media division of the telecoms giant had been counting on ad revenue to keep up with competitors.
- The Verizon Media Group, which includes the Yahoo, AOL and HuffPost, reported $1.4 billion revenue for the second quarter, down 24.5% year-over-year.
- Verizon’s media unit was already struggling to bring in its previously stated goal of $10 billion annually, aiming to compete with Google and Facebook, before the pandemic.
- At the end of June, about 60% of Verizon’s stores were open. Now the company has temporarily closed all retail stores.
By the numbers: The firm said the fall in revenue was “primarily as a result of COVID-19 related impacts.” The company also attributed the fall to “the ongoing shift from traditional linear video to over-the-top offerings.”
- Verizon lost 81,000 net pay TV subscribers for its FiOS consumer video service in the second quarter, compared with a loss of 52,000 year-on-year, and a loss of 84,000 in the first quarter.
- The company’s overall second-quarter revenue fell 5% to $30.4 billion.
- According to the Pew research centre, in 2019, about half (53%) of digital display ad revenue went to Facebook (42%) and Google (11%). Another 12% went to Amazon; Verizon Media Group, Twitter; and Microsoft, among others.
Zoom out: Verizon is not the only media company struggling in the coronavirus climate.
- Quartz laid off 80 staffers as its advertising revenue declined by over half.
- BuzzFeed shut down its divisions in the UK and Australia.
- Twitter revenue fell 19% to $683 million, missing Wall Street estimates of $700 million.
The roll-up: The shockwaves created by the pandemic are forcing many companies to adapt their business models in order to stay profitable. The relative success of streaming sites and advances in ad tech indicate that the industry’s survival rests on it taking a new direction.