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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.

Go deeper:

Go deeper

Updated 32 mins ago - World

Mexican President López Obrador tests positive for coronavirus

Mexico's President Andrés Manuel López Obrador during a press conference at National Palace in Mexico City, Mexico, on Wednesday. Photo: Ismael Rosas/Eyepix Group/Barcroft Media via Getty Images

Mexican President Andrés Manuel López Obrador announced Sunday evening that he's tested positive for COVID-19.

Driving the news: López Obrador tweeted that he has mild symptoms and is receiving medical treatment. "As always, I am optimistic," he added. "We will all move forward."

47 mins ago - Politics & Policy

Sarah Huckabee Sanders to run for governor of Arkansas

Sarah Huckabee Sanders at FOX News' studios in New York City in 2019. Photo: Steven Ferdman/Getty Images

Former White House press secretary Sarah Huckabee Sanders will announce Monday that she's running for governor of Arkansas.

The big picture: Sanders was touted as a contender after it was announced she was leaving the Trump administration in June 2019. Then-President Trump tweeted he hoped she would run for governor, adding "she would be fantastic." Sanders is "seen as leader in the polls" in the Republican state, notes the Washington Post's Josh Dawsey, who first reported the news.

Coronavirus has inflamed global inequality

Illustration: Aïda Amer/Axios

History will likely remember the pandemic as the "first time since records began that inequality rose in virtually every country on earth at the same time." That's the verdict from Oxfam's inequality report covering the year 2020 — a terrible year that hit the poorest, hardest across the planet.

Why it matters: The world's poorest were already in a race against time, facing down an existential risk in the form of global climate change. The coronavirus pandemic could set global poverty reduction back as much as a full decade, according to the World Bank.

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