Please ensure Javascript is enabled for purposes of website accessibility

Verizon's Big Bet With Disney Pays Off

By Danny Vena - Jan 27, 2021 at 2:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Promo customers for the streaming service are converting in droves.

When Disney (DIS -3.27%) launched its flagship streaming platform Disney+ just over a year ago, Verizon Communications (VZ 0.83%) made a big, if somewhat calculated, bet on the nascent service. Just prior to its launch, Verizon teamed up with the House of Mouse to offer Disney+ free for one year. The offer was available to both new and existing customers choosing the Verizon Unlimited plan, as well as new 5G Home and Fios internet customers. 

A little more than a year later, the results are exceeding Verizon's wildest dreams.

Man holding a remote pointed at blurred out television streaming video.

Image source: Getty Images.

Two-thirds of customers who signed up for the promotional deal that included one free year of Disney+ are still Verizon customers today.

"We think this is unheard of," said Hans Vestberg, chairman and CEO of Verizon. "We are getting high-quality customers ... We will not have hundreds of these types of [streaming] agreements. We will have the absolute best ones. ... [As a result] our churn number's at an all-time low," Vestberg stated, though he didn't provide additional specifics.

Verizon also struck similar deals with Apple (AAPL -4.46%) and Discovery (DISC.A) for Apple TV+ and Discovery+ and said the company enjoyed similarly strong customer gains.

At the time Verizon first struck its agreement with Disney, many wondered whether Verizon would get much bang for its buck, but it seems that question has been put to rest. Verizon said its Fios internet added roughly 300,000 subscribers for the year and some 92,000 in the fourth quarter alone. At the same time, its pay TV service lost 298,000 customers last year. Verizon said those losses "reflect the ongoing shift from traditional linear video to over-the-top offerings."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$49.34 (0.83%) $0.41
Apple Inc. Stock Quote
Apple Inc.
AAPL
$142.59 (-4.46%) $-6.65
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$105.08 (-3.27%) $-3.56
Warner Bros. Discovery, Inc. Stock Quote
Warner Bros. Discovery, Inc.
DISC.A

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.