The Other Pay-TV Bundle

Blog0 Comments

Hulu’s virtual pay-TV service went live in selected cities this week, offering a basic bundle of 60 channels for $40 a month ($73 a month with enhanced DVR capability). The launch, still officially in beta, brings to six the number of live, multichannel over-the-top services now available, including DirecTV Now, Sling TV, Playstation Vue, YouTube TV, and Fubo TV. More are likely on the way.

But while Hulu was rolling out, many traditional pay-TV providers were rolling over. According to an analysis by MoffettNathanson analyst Craig Moffett, based on publicly reported results and estimated results for privately held companies, traditional pay-TV providers collectively lost at least 762,000 video subscribers in the first quarter of 2017, more than five times their losses in the same period last year.

“For the better part of fifteen years, pundits have predicted that cord-cutting was the future. Well, the future has arrived,”  Moffett wrote in his latest quarterly overview of the industry. “It leaves the Pay TV subscriber universe shrinking at its worst ever annual rate of decline (-2.4%). And it was the worst ever accelerate in the rate of decline (60 bps).”

The news spooked investors, who sent shares of media companies tumbling. Read More »

Netflix Ponders Life Without Net Neutrality

Blog0 Comments

Netflix CEO Reed Hastings did as much as anyone to shape the Federal Communications Commission’s net neutrality rules. CEO Reed Hastings’ aggressive public lobbying for what he termed “strong” net neutrality, after Comcast and AT&T successfully forced Netflix to pay for access to their last-mile networks, was largely responsible for putting interconnection arrangements between ISPs and edge providers at the center of the debate and helped persuade former FCC chairman Tom Wheeler to push through reclassification of broadband access as a Title II telecommunications service, which gave the commission jurisdiction over those deals.

Yet, as Republicans in Congress and on the commission sharpen their knives to disembowel Wheeler’s hard-won rules Netflix says it no longer needs the protection.

“Weakening of US net neutrality laws, should that occur, is unlikely to materially affect our domestic margins or service quality because we are now popular enough with consumers to keep our relationships with ISPs stable,” Hastings said in his Q4 letter to shareholders this week.

Translation: we’re too big now even for Comcast to push around, a point Comcast itself obliquely acknowledged in November by integrating Netflix into its flagship X1 set-top box. Read More »

In Cable, The Rich Get Richer

Blog0 Comments

Daniel Frankel, over at FierceCable, noted an interesting pattern in the Q1 data from cable operators this week. All of the vaunted rebound in video subscribers during the period was concentrated among top-tier providers.

Comcast, Time Warner Cable and Charter collectively added 89,000 video subs.

Mid-size operators, however, all experienced continued erosion among video subscribers. Cablevision lost 15,000; Cable One lost 13,000; and Mediacom lost 2,000 across its two operating units.

money_bagsFirst-quarter data on smaller providers, which is compiled by SNL Kagan, is not yet available. But it would be surprising if the pattern there were different from that of the mid-size providers.

In both cases, operators are increasingly making a de facto, if not quite formal, decision not to fight very hard to attract or retain video subscribers because of the high programming costs that come with them and to focus their business primarily on their broadband service.

“The lower end of the market can no longer afford the big bundle; the number of disruptive OTT technologies and vendors are now multiplying rapidly; and the millennial generation has very limited interest in traditional TV viewing,” Cable One CEO Thomas Might told Fierce. “These patterns will inevitably bring an end to the ubiquitous fat bundle, but only slowly and painfully.”

Slowly and painfully perhaps, but the data also suggest it could happen at very different speeds in different markets, depending on the size of the local providers’ national footprint. Read More »

The FCC Plays For Time in Charter-TWC Merger

Blog0 Comments

The Federal Communications Commission and the U.S. Justice Department this week each signaled their intent to approve Charter Communication’s $65 billion acquisitions of Time Warner Cable and Brighthouse Networks, subject to several conditions.

The mergers will create the second largest cable-TV provider in the country, with 17.4 million subscribers, behind Comcast’s 22 million. Strikingly, though, none of the conditions attached by the FCC and DOJ have to do with the provision of cable-TV service. Instead, they deal almost entirely with promoting over-the-top video as a viable competitor to cable.

FCC_headquartersUnder the deal with the FCC, the merged company will be prohibited from imposing usage-based pricing or data caps on its 19.4 million broadband subscribers, a tactic many cable internet providers have turned to lately to discourage video cord-cutting by indirectly raising the cost of using OTT services like Netflix.

Charter will also be prohibited from charging Netflix and other OTT providers with interconnection fees for delivering traffic to Charter broadband subscribers.

Under the agreement with the Justice Department, Charter will be barred from inserting or enforcing most-favored nation (MFN) clauses in its carriage agreements with programmers — a tactic many pay-TV providers, particularly TWC, have used to discourage programmers from making their content available on OTT platforms. Read More »

Cable’s Q4 Bundle of Joy

Blog0 Comments

Comcast, Time Warner Cable and Charter all reported strong video subscriber growth in the fourth quarter of 2015, adding 172,000 between them. That was a far cry from a year earlier, when they collectively lost 35,000 video subs.

The results led some to speculate that the worst days of cord-cutting are now behind the industry and that cord-nevers may be starting to change their minds about paying for TV.

Maybe, although the pay-TV industry as a whole continues to lose subscribers, at a rate of about 1 percent a year, according to an estimate by comcast_vanMoffettNathanson analyst Craig Moffett. Most of that shrinkage in the fourth quarter came from telco and satellite providers, as those two businesses undergo restructurings.

Between them, Verizon’s FiOS TV service and the combined AT&T/DirecTV lost 6,000 video subscribers in the quarter, as Verizon shifted its video focus to its new mobile streaming service Go90 while AT&T shed U-Verse subscribers as it prepared to swallow DirecTV.

In Comcast’s Q4 earnings call, CEO Brian Roberts acknowledged that some of cable’s gain last year probably reflected a market share shift, reversing several years in which cable was losing share to satellite and telco. Read More »

Broadband Rubicon Crossed? Cablevision, CBS Reach OTT Retrans Deal

Blog0 Comments

Cablevision is boasting today of becoming the first cable or satellite provider to offer CBS’s OTT channel, CBS All Access, to its broadband subscribers.

The multiyear deal between the network and the MSO includes retransmission consent for CBS-owned stations and continued carriage by Cablevision of Showtime, CBS Sports Network and the Smithsonian Channel, in addition to CBS All Access.

“This comprehensive new agreement builds on our strong relationship with CBS and ensures that every Optimum customer gets the highly popular CBS content they want across multiple platforms and screens,” Cablevision EVP of programming Tom Montemagno said in a statement. “As the first distributor to agree to provide tony_sopranoCBS new Internet services, Cablevision continues to expand its portfolio of next-generation offerings, connecting customers to the programming they value when and where they want it.”

For those who have paid attention to Cablevision in recent months the CBS deal is no big surprise. The MSO has been drifting away from the traditional pay-TV model since it introduced its “Cord Cutter” package earlier this year that included broadband service and an over-the-air antenna for tuning in broadcast channels. It was also the first operator to offer Hulu to its broadband subscribers and was a launch partner for HBO Now. But the CBS deal represents the first time that Cablevision — or any other MVPD — has licensed an OTT service as part of a broadcast retransmission deal.

I’m not sure other cable ISPs would see that as something to boast about. Read More »

Court Denies Stay; Net neutrality rules to take effect Friday 

Headlines0 Comments

The new federal rules for net neutrality will be allowed to take effect on Friday, the U.S. Court of Appeals for the District of Columbia Circuit ruled Thursday. The court denied a request for a stay that would have put the rules on hold until a broader court battle is settled. It ruled that it will expedite the underlying case.

Source: Net neutrality rules will take effect on Friday | TheHill

Net neutrality takes effect Friday; ISPs scramble to avoid complaints

Headlines0 Comments

The Federal Communications Commission’s net neutrality rules take effect Friday this week, and they’ve already had a noticeable impact on the behavior of Internet service providers.

The latest news occurred today when AT&T and network operator Cogent announced a new interconnection agreement for exchanging Internet traffic. If AT&T Internet users were experiencing trouble reaching websites, this could resolve that problem for any Internet traffic traveling from Cogent to AT&T.

Source: Net neutrality takes effect Friday; ISPs scramble to avoid complaints | Ars Technica

Appropriations Bill Would Block Net Neutrality Rules 

Headlines0 Comments

At press time a D.C. federal appeals court had yet to rule on staying the FCC’s Title II reclassification of ISPs, but Congressional Republicans were trying to implement a legislative stay in a bill that would also cut the FCC’s budget substantially, force publication of FCC drafts and prevent any new net neutrality rules from leading to rate regulation.

Source: Appropriations Bill Would Block Net Neutrality Rules | Broadcasting & Cable

Internet rules slated to take effect 

Headlines0 Comments

The Federal Communications Commission’s (FCC) net neutrality rules are slated to take effect on Friday. But the regulations, approved in February by a 3-2 vote, are still not out of the woods. Telecom companies are hoping for a decision any day from the U.S. Court of Appeals for the D.C. Circuit on their request to delay the rules before they are implemented. Trade groups have sued to kill the FCC’s order and want the regulations delayed until a final decision is reached.

Source: Week in tech: Internet rules slated to take effect | TheHill

Apple Said to Build High-Speed Network for Fast Content Delivery 

Headlines0 Comments

Apple wants to own pipes linking its four large U.S. data centers and Internet hubs in certain cities to ensure fast, reliable delivery of content and services. By adding capacity and increasing efficiency, it seeks to handle more traffic on its own, without renting as much server space from cloud providers such as Amazon and Microsoft, said people with knowledge of the plan, who asked not to be identified because Apple isn’t discussing the moves publicly. They declined to name the cities involved.

Source: Apple Said to Build High-Speed Network for Fast Content Delivery – Bloomberg Business

Net neutrality critics hedge bets on delay request

Headlines0 Comments

Critics trying to kill new net neutrality rules are hedging their bets that a federal court will grant their request to put the regulations on hold.Lawyers for the telecom industry on Wednesday expressed broad confidence that their ultimate court challenge to the Federal Communications Commission regulations would prevail, but they said their request for a stay is a lot harder to predict.

Source: Net neutrality critics hedge bets on delay request | TheHill

AT&T is prepared to abide by the new net neutrality rules under the DirecTV deal

Headlines0 Comments

AT&T is part of an industry coalition suing to roll back the net neutrality rules. But if regulators approve the deal with an AT&T commitment to net neutrality, the compamy would be bound by the rules for the duration of the agreement no matter what happens to the court case.

Source: AT&T is prepared to abide by the new net neutrality rules under the DirecTV deal