Oct 25, 2018

Verizon vs. AT&T: A tale of two media investments

AT&T logo in New York. Photo: Roberto Machado Noa/LightRocket via Getty Images

Telecom giants AT&T and Verizon are both pursuing a strategy that marries content and distribution. But they are taking two different approaches and, so far, seeing radically different results.

Verizon admitted Tuesday that its media arm, Oath — which consists of AOL, HuffPost, Yahoo and other digital brands — is struggling to drive revenue. Meanwhile, AT&T said Wednesday that WarnerMedia, its media division that was formerly called Time Warner, is flourishing.

Why it matters: Oath is driven by digital ad income, whereas WarnerMedia is driven by revenue from streaming subscriptions, its studio business and its digitally-sold television ads business. The digital ad business continues to be a tough marketplace for media companies competing with tech giants like Google and Facebook, whereas those tech giants have yet to dominate subscription streaming, movies, and digitally-sold TV ads.

What they're saying:

  • Verizon conceded in its earnings press release that it expects Oath revenues "to be relatively flat" in the near-term and "does not expect to meet the previous target of $10 billion in Oath revenues by 2020." Oath was down 6.9% in revenue year over year.
  • AT&T CFO John Stephens told investors on a call Wednesday that higher subscription revenues at HBO and Turner as well as increased TV licensing revenues at Warner Bros. helped drive WarnerMedia's success. WarnerMedia's revenue was up 6.5% year over year.

Between the lines: While this was only the first full quarter of earnings reported for WarnerMedia under its new parent company, all signs point to optimism from investors.

  • Oath, on the other, hand, is facing a brutal outlook from both investors and media experts. Many, including Former Yahoo CFO Ken Goldman, have suggested that Verizon should spin off Oath.
  • The company has lost the majority of its top executives since it was acquired last year, including CEO Tim Armstrong. As a result, Verizon says it's focusing its future investments on building out its national 5G network.

Bottom line: Even in an Internet age, TV content still has value, regardless of which screens are used to view it. On the other hand, Internet media continues to be a tough sale, even when you own the pipe.

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Wisconsin Supreme Court blocks governor from delaying state's primary

Tony Evers. Photo: Nuccio DiNuzzo/Getty Images

Wisconsin's Supreme Court on Monday blocked an executive order by Gov. Tony Evers (D) that attempted to delay in-person voting for the state's primary election — currently scheduled for Tuesday — until June 9.

Driving the news: Judges ruled 4-2 along ideological lines that Evers does not have the power as governor to unilaterally postpone the election, despite the fact that the state has a stay-at-home order in place due to the coronavirus pandemic.

Go deeperArrowUpdated 11 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 5 p.m. ET: 1,331,032 — Total deaths: 73,917 — Total recoveries: 275,851Map.
  2. U.S.: Total confirmed cases as of 5 p.m. ET: 356,942 — Total deaths: 10,524 — Total recoveries: 18,999Map.
  3. 2020 update: Wisconsin governor orders in-person primary voting delayed until June.
  4. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  5. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  6. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  7. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Stocks jump 7% despite bleak coronavirus projections

People passing by the New York Stock Exchange amid the coronavirus pandemic. Photo: John Nacion/NurPhoto via Getty Images

The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.

Why it matters: The huge market surge comes amid rare optimistic signs that the spread of the coronavirus may be slowing in parts of the country, including New York. But government officials say this will be a difficult week, while economists — including former Fed chair Janet Yellen today — warn that the pandemic could have a catastrophic impact on the global economy.