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CABLE ADVISORY COUNCIL CHAIRMAN REPORT

Gregory G. Davis


28 April - 12 May 2015CableNews

assembled from the curated electronic newsfeed: newsletters@newbay-media.com



Wheeler Urges Cable Operators to Embrace Broadband Competition

At the National Cable & Telecommunications Association's INTX Show in Chicago today, FCC chairman Tom Wheeler urged cable operators to embrace their transformation from cable TV distributors to broadband companies and rise to the challenge of making Internet service a more competitive business.
Why This Matters: Wheeler, who used to lobby for the cable industry, warned cable operators to “overcome the temptation to use your predominant position in broadband to protect your traditional cable business,” adding that when the FCC’s new net neutrality rules take effect on June 12, there will be “strong protections to shield against harm to an Open Internet.”
5 Takes: Deadline | B&C | L.A. Times | Variety | Fierce Cable



QUOTE OF THE DAY 4 May 2015

"Streaming services are giving customers more options but it's not a replacement for cable. None of these services can compete with cable and afford the licensing fees for content."

– Dan Rayburn, Frost & Sullivan analyst



Comcast Spent $336 Million On Failed Merger

by Karl Bode 10:31AM Monday May 04 2015

The uncertainty of the now dead Time Warner Cable merger certainly didn't hurt Comcast's broadband growth. According to the company's latest earnings report, Comcast continued to slowly bleed video subscribers (8,000 lost on the quarter) but added 407,000 high-speed Internet subscribers.


The company's earnings state that Comcast spent $99 million during the first quarter on trying to get the merger approved, bringing the price tag for the full merger attempt to around $336 million. Of course Comcast saw a net income of $2.1 billion on revenues of $17.9 billion during just the last three months.

"At Comcast, we have great products and we were excited about bringing these capabilities to additional cities," CEO Brian Roberts told attendees of the company's earnings call. "The government ultimately didn’t see it the same way."

Of course it wasn't the offering of new products the government took issue with. It was, according to many reports, Comcast's failure to adhere to NBC merger conditions -- combined with the company's sheer size and market leverage (they would have served 57% of all broadband subscribers in the country) that gave regulators pause.

Wheeler confident FCC will beat Title II lawsuits

Mon, 05/04/2015 - 3:07pm Andrew Berg, Wireless Week

FCC Chairman Tom Wheeler said that the he's not worried about the dozen or so lawsuits now filed over the recently approved Open Internet rules.

"I said all along, the big dogs are going to sue," Wheeler said during an interview at TechCrunch's Disrupt New York event that was broadcast online. "There's nothing surprising about that."

Wheeler said that classifying Internet Service Providers (ISPs) under Title II of the Communications Act was the last thing that needed to be accomplished for the courts to rule in the FCC's favor. He referenced Verizon's lawsuit, which prevailed back in 2010, when the carrier challenged the notion that the FCC had jurisdiction over ISPs, which at the time it didn't.

Wheeler said that part of the reason the FCC decided to move on the Open Internet rules was the overwhelming public response in the form of 4 million online comments, of which he said about three quarters were in favor of Title II classification.

"The bulk of the comments indicated how when you're talking about the Internet, you're talking about something very personal to people," Wheeler said. "And they then used that personal media of theirs to express themselves. and that was signifcant."

Wheeler acknowledged that Republicans have not been kind to him after passage of the Open Internet rules, putting him through a total of five hearings on the subject in a matter of eight days. While Wheeler admitted it wasn't the most fun he's had, he also said that he respects Congress and will answer any questions at its behest.

When asked whether he would continue on as the Chairman of the FCC should he be asked to do so by the next President, Wheeler quipped, "I don't know. She hasn't asked me yet."

Aside from Title II, Wheeler commented briefly on the recent killing of the Comcast/Time Warner deal.
He said that he thought Brian Roberts, CEO of Comcast, was right to abandon the fight.

"I think it was pretty responsible decision by Brian Roberts," Wheeler said. "Why go and fight this through the courts, or whatever the case may be, and let's move forward."



OTT passes 50% of American homes

Details Michelle Clancy | 28 April 2015

More than half (55%) of US broadband households subscribe to an over-the-top (OTT) video service, up from 44% in 2013.

Recent research from Parks Associates finds that, unsurprisingly, subscriptions are highest among households with a younger head-of-household, with 72% among ages 18-24 and 71% among ages 25-34 having an OTT service subscription.

"Consumers in key demographics have adopted OTT services in large numbers, and now both content companies and service providers need to develop the technologies and solutions to deliver high-quality video experiences to these subscribers," said Glenn Hower, research analyst at Parks Associates.

Interestingly, while OTT uptake continues apace, it's not necessarily translating into cord-cutting. Nielsen recently found that 93% of cable subscribers who also have a subscription video-on-demand VOD service are more likely to drop the SVOD than they are cable. A full 99% of cable subscribers who also had SVOD still had cable three months later.

"Cable may have a little more staying power than it's actually being given credit for recently," said Glenn Enoch, senior VP of audience insights for the measurement and data service at Parks Associates.



Read more: OTT passes 50% of American homes | OTT | News | Rapid TV News http://www.rapidtvnews.com/2015042838092/ott-passes-50-of-american-homes.html#ixzz3ZqwMnhru



DirecTV U.S. Adds 60,000 Subscribers in First Quarter

DirecTV reported today that it added a net of 60,000 video subscribers in the first quarter, compared to an increase of 12,000 in last year's first quarter. The company attributed the improvement to a lower churn rate. The churn rate for the first quarter was 1.37%, compared to 1.45% in last year's first quarter.
Why This Matters: The company's U.S. revenues hit $6.46 billion in the first quarter, an increase of 6%. DirectTV said the average monthly revenue per subscriber rose 5.5% to $105.62 due to a host of factors including price increases on program packages and regional sports networks.
4 Takes: MCN | THR | The Wrap | TV Predictions



Cord cutter threat remains real as OTT quality, content choice improve

May 6, 2015 | By Samantha Bookman published by Fierce Online

To cut the cord or not is a conversation that is increasingly taking place in households worldwide, according to a new report from Limelight Networks. In its annual "State of Online Video Survey," the digital content delivery provider suggests that almost 90 percent of respondents, regardless of age, are open to the idea of cancelling their pay-TV service and going all-OTT.

That percentage rate comes with a few caveats. The 1,221 people surveyed in the U.S., Canada, UK and Australia did not directly say they planned to cancel their service. Rather, 10.48 percent said specifically that they "will never terminate" their pay-TV subscription, while the remainder of respondents said they would consider cutting the cord under certain conditions.

The majority of that crowd, just under 38 percent, said that rising pay-TV prices would most likely spur a jump to the OTT lifestyle. Twenty percent don't have a pay-TV subscription at all. And 16 percent said they would consider cutting the cord if the channels they want to watch are available over-the-top.

"Price is a huge consideration; it's why we asked that question," Jason Thibeault, senior direct at Limelight and the report's author, told FierceOnlineVideo. "People said they would cut their subscription if it keeps going up in cost."

The continuing rise in pay-TV rates and the inflexibility of the channel bundles they receive is part of what's driving viewers toward online video.

"People are saying, 'I pay $120 a month for cable service, I watch 5 percent of the channels … what if I could get it directly from CBS or HBO and not have to go thru cable service at all?' That conversation is starting to happen across the board," Thibeault said.

Limelight's findings are somewhat similar to a report released by Parks Associates early this year which said that as many as 7 million U.S. consumers might cancel their pay-TV subscriptions if or when OTT alternatives like HBO Now and Sling TV became available. As with this survey, the answers reflected respondents' intention or willingness to cancel services under certain conditions.

But certain factors are telling: In Limelight's survey, millennials again led the way when it came to cord cutting. Younger millennials watch four to seven hours of online video per week, more than any other demographic. About 20 percent of all respondents subscribe to two or more OTT services like Netflix, indicating "a desire for variety in programming," the report said.

It also noted that online video quality can have a detrimental impact on the segment's growth. The majority of the respondents said they will only let a video buffer twice before abandoning it.

So, does this mean pay-TV is all washed up? Hardly, Thibeault said. Rather, the proliferation of OTT services is creating an opportunity for the old guard to retain its subscriber base and maybe even attract cord nevers.

"I think where pay-TV providers have a leg up is one, they're providing more services than just cable. They're offering a package of services," he said. Further, the expansion of TV Everywhere services can help with subscriber retention. "Say I have 15 channels on cable. Sling has five of those, CBS (All Access) has one, Apple TV has the rest. Now I have four subscriptions to get 15 channels, whereas my cable provider, if they can get those 15 to me in a bundle with a TVE overlay and maybe even DVR capabilities, now we're talking about a much more compelling reason for me to stay with cable operator than to cut the cord."



Cable companies are scrambling as more viewers become cord-cutters;

Comcast now has more Internet customers than cable TV subscribers

Paul Graves at 9:14 PM May 09, 2015, Los Angeles Times

There are more than 12.3 million homes that depend solely on over-the-air broadcasting for live TV viewing

At the end of 2014, Nielsen put the number of broadband homes using over-the-air signals for TV at 6.1 million

May 7, 2015, 3:30 AM Reporting from CHICAGO

The cable TV industry is setting its sights on consumers who are shunning their business..

Viewers who get their favorite shows for free by using over-the-air antennas have made "OTA" the buzzy acronym at the Internet & Television Expo being held this week in Chicago, where cable companies are gathered to mull over their fast-changing future.

There are now more than 12.3 million homes that depend solely on over-the-air broadcasting for their live TV viewing, a net gain of 1 million over the last year, according to audience measurement service Nielsen.

That's about 11% of all U.S. households with TV — hardly a mass migration to the old-school technology.

But as the cable and satellite industries see a downward trend in the overall number of customers signing up for their video offerings while broadband Internet service continues to grow, it's getting more attention.

Some homes are turning to over-the-air signals because they can't afford cable.

But a growing number of them are millennials who use over-the-air TV for live sports and broadcast network shows on ABC, CBS, NBC and Fox while getting a wide array of programs from streaming video services such as Netflix, Amazon and Hulu. They are happy to pay for broadband Internet, but not TV.

At the end of 2014, Nielsen put the number of broadband homes using over-the-air signals for TV at 6.1 million — up from 5.6 million the previous year.

"Cable has got to recognize that there are broadband-only subscribers," said cable industry veteran Tom Rogers, who now runs the video technology company TiVo. "It has to come up with some way of relating to them with [a video product]."

Bethpage, N.Y., cable operator Cablevision is making the most aggressive effort to target the emerging segment by actually offering customers broadband Internet service and a TV antenna to pull in over-the-air channels.

"Our goal is to meet the customers where they are," Cablevision Chief Operating Officer Kristin Dolan said during an INTX panel. "We're embracing a much more modern version of rabbit ears," referring to the set-top antenna of the analog TV age.

Dolan said the broadband Internet service offering is aimed at "economically challenged" families, giving them basic Wi-Fi service, a Wi-Fi-only phone and an antenna to capture over-the-air signals on their TV sets for $34.95 a month.

"Price is a real issue in America today," Dolan said.

I have been a cord cutter for years.. I tried cable two years ago for a couple of months and was so disappointed with the shows and most of all... the insane amount of commercials. I quickly ended my subscription. I like sports and my antenna brings in enough weekend golf, football and baseball...

A more expensive package is available for what Dolan calls "true cord-cutters," the consumers who choose not to subscribe to cable and are content to get their favorite TV shows through the Internet. That service comes with a higher-speed Wi-Fi that can be used to watch HBO Now, which requires a subscription, and other streaming services. Those customers get an antenna too.

There is anecdotal evidence that over-the-air viewing is gaining steam across consumers in different economic strata as well.

Dennis Wharton, executive vice president for the National Assn. of Broadcasters, said the trade group held a TV antenna giveaway last fall at the Eastern Market in Washington, D.C. The planned three-hour event was done in just over an hour as the supply of 1,000 antennas ran out.

Many of those who showed up at the giveaway were people who disconnected their cable or satellite TV service to save money. But Wharton said they were joined in line by plenty of congressional staffers and millennials who have taken to over-the-air viewing in the way they have made vinyl records hot again in the music business.

Wharton noted that the diversity of channel offerings on over-the-air television — which has expanded since 2009 when all TV stations converted to digital signals — has made broadcast TV a more attractive low-cost alternative.

Immigrants who come to the U.S. can find a wide range of programs in various languages, especially in large markets such as Los Angeles and New York, which have dozen of channels. The percentage of broadcast-only households is higher among Latinos (16%) and Asian Americans (15%) compared with the rest of the population.



NCTA and ACA to Seek Title II Court Stay

By: John Eggerton 5/07/2015 02:43:00 PM Eastern

The National Cable & Telecommunications Association and American Cable Association plan to seek a stay of the FCC's Title II reclassification in the U.S. Court of Appeals for the D.C. Circuit, and hope to tag team on the pitch.

The FCC almost certainly won't grant stay petitions, since it would have to conclude the just-passed rules have a likelihood of being illegal, so the federal court is the next stop.

According to a request to the court to exceed its page limit for stay requests by combining on a single brief, NCTA and the ACA signaled they would both be seeking the court stay. Their petitions to the FCC to stay the decision are not due until Friday (May 8).

The two cable trade groups have independently sued the FCC in the D.C. Circuit over its Feb. 26 party line decision to classify ISPs as common carriers, but want to file jointly given that they both "intend to move this Court to stay the Order’s reclassification of broadband Internet access service under Title II (but not its bright-line Open Internet rules) pending judicial review, or alternatively to grant expedited briefing. As petitioners will explain in requesting a stay, this Court is likely to overturn the Order’s departure from settled regulatory policy on the merits, petitioners’ members will suffer severe and irreparable harms when the Order becomes effective on June 12, 2015, and a stay would cause no harm to respondents or the public because it would merely maintain the status quo until the lawfulness of the Order is adjudicated."

Rather than file two 20-page motions (the limit for those requests), they want the court to let them team up on a single, 35-page motion. "Petitioners’ distinct but overlapping interests warrant additional pages," they said, which would also save paper in the long run they said, (reducing the total from 40 to 35).



Exclusive: Bright House Networks plans to drop merger with Charter

By Liana B. Baker Thu May 7, 2015 7:15pm EDT

"Bright House Networks, the sixth largest U.S. cable operator, is preparing to abandon a $10.4 billion deal to be acquired by larger peer Charter Communications Inc (CHTR.O), according to people familiar with the matter.

Charter, the No. 4 U.S. cable operator, clinched the deal with Bright House in March contingent on completion of Comcast Corp's (CMCSA.O) $45.2 billion merger with Time Warner Cable Inc (TWC.N). Comcast walked away from the Time Warner Cable deal last month because of antitrust hurdles.

Charter's agreement with Bright House includes a 30-day provision for them to renegotiate a deal in this event. That period lapses in about two weeks. Even though negotiations are still formally continuing, Bright House, which is controlled by the Newhouse family, owner of magazine publisher Conde Nast, now believes it best to remain independent, the people said this week.

Time Warner Cable has an agreement to negotiate programing rates for Bright House, as well as share technology, in exchange for a fee. Bright House would rather not change this arrangement by partnering with Charter, which is a smaller operator than Time Warner Cable, the people added.

The sources asked not to be identified because the deliberations are confidential. Bright House Networks, Charter and Time Warner Cable representatives declined to comment.

Last week, Charter Chief Executive Tom Rutledge said on the company's earnings call he was negotiating with Bright House "in good faith." Time Warner Cable has the right of first refusal in the event Bright House pursues a sale.

The U.S. cable TV industry has been rapidly consolidating in recent years to counter the growing popularity of satellite TV and Web-based entrants such as Netflix Inc (NFLX.O).

The Bright House deal would have made Charter, whose biggest shareholder is John Malone's Liberty Broadband Corp, the No. 2 U.S. cable TV provider. It would have helped Charter expand in Florida, a market where Bright House has a strong presence. Charter's key markets include Alabama, Georgia, Michigan and California.

Charter is now in negotiations to acquire Time Warner Cable, people familiar with the matter have previously said.

Time Warner Cable's deal with Comcast fell through after U.S. regulators raised concerns that it would give Comcast an unfair advantage in the cable TV and Internet-based services market.

Charter last week reported a first-quarter net loss of $81 million, or 73 cents per share, up from $37 million, or 35 cents per share, a year earlier.



Charter Chief Considers Adding Netflix And Skinny Bundles – And TWC? (Deadline)
by David Lieberman May 1, 2015 8:56am

The most surprising news from Charter Communications’ call with analysts this morning didn’t involve any plans to buy Time Warner Cable — although CEO Tom Rutledge says he’s still talking with Bright House Networks to possibly revive his company’s $10.4 billion acquisition. (More on that in a moment.) It’s what he’s doing with his current cable systems which serve about 4.2 million subscribers: He’s open to offering Netflix and other streaming services directly to his TV customers. In addition, he’s looking at crafting so-called skinny bundles of lower cost TV packages with fewer channels.

Most cable companies consider Internet video services to be competitors. As a result, they require subscribers who want to watch Netflix, Amazon Prime, or Hulu to switch away from TV input where the cable box feeds programming.

Rutledge says he now believes “we can mix those products into products that we sell to satisfy the customer’s entire video needs.” That would effectively treat the subscription streaming services as premium cable channels, like HBO, Showtime or Starz.

His comment follows an announcement this week from his former employer, Cablevision, that strongly suggests it will offer Hulu Plus to its TV subscribers.

In addition, the Charter chief would like to craft lower-cost alternatives to the traditional basic cable bundle. “The price of the full package is expensive” and has led to cord cutting, he says. As a result, “we are looking at all the alternatives.”

But it’s hard to craft one that works. Although others including Dish Network’s Sling TV have lower priced offerings, they don’t offer consumers enough bang for the buck. “We haven’t found that product mix yet, and we don’t think anyone else has either,” he says.

Rutledge includes Verizon FiOS’ new Custom TV offering, which offers a basic package that doesn’t include high-priced channels including ESPN. (Disney’s sports service is suing Verizon, charging it with a breach of contract — which the telco denies.) Although he says he doesn’t know the specifics of the companies’ contracts, most include tiering and service requirements.

More generally, though, he says that “those kinds of products have been tried in the past” but “ended up migrating back” to the full bundle. “It’s hard to build products that actually satisfy people.” But he adds: “Would I rather be able to sell lots of smaller tiers? Yes.”

As for mergers: Rutledge didn’t directly address the main question on everyone’s mind — whether Charter will go after Time Warner Cable now that Comcast has scrapped its $45 billion acquisition plan. He says the company will consider acquisitions generally “in a disciplined manner.” He and Charter’s his leading shareholder, Liberty Media’s John Malone, have left little doubt that it will return with an offer.

Still, Rutledge says he’s “disappointed.” The Comcast-TWC agreement included side deals with Charter that would have made it the nation’s No. 2 cable company, dominant in middle America.

Altthough Charter’s agreement to buy Bright House Networks was contingent on Comcast’s takeover of TWC, the deal has a 30-day window that “requires us to negotiate in good faith, and we’re doing that.” It’s a bit more complicated now: TWC has right of first refusal, but TWC chief Rob Marcus declined to talk to analysts yesterday about his merger plans.



How OTT services will impact pay TV

Expect to see potential subscribers dropping cable or satellite

By Diego Vasquez April 30, 2015

Will the availability of over-the-top services, which deliver pay TV content directly to subscribers rather than forcing them to sign up for cable or satellite, result in fewer cable and satellite subscriptions? That’s been the big question ever since HBO became the biggest network to launch an OTT service earlier this month. A new study suggests cable and satellite may indeed lose subscribers in connection with these launches. Parks Associates, a market research company, found that among households interested in subscribing to HBO Now, half of those who have cable or satellite say they would cancel it if they got an OTT service. But interestingly, cable and satellite aren’t the only services that could see a negative impact from HBO Now. Parks found that 40 percent of likely HBO Now subscribers who also subscribe to Netflix said they would also drop that service too if they signed up for a new OTT channel. The report also found that OTT subscriptions are seeing the highest growth rate among viewers 35-64, though 18-24s are most likely to subscribe to them. Brett Sappington, director of research at Parks Associates, talks to Media Life about the impact of OTT services, how they will impact pay TV, and what the future of OTT services will be.

What did you find most interesting or most surprising about the study?

The diversity of companies getting into the OTT video space. Broadcasters, cable networks, and pay-TV providers were interesting additions, particularly given the nature of the TV industry.

However, we are seeing companies ranging from a game console makers to organizers of comic book conventions launch OTT services.

What’s the most important thing media buyers and planners can learn from it?

Well, there are more companies interested in licensing content than ever. Many of these companies will live and die based on the content that they have available. Exclusivity and original programming will become more important over time.

How might the launch of HBO’s OTT service undermine pay-TV subscriptions?

HBO’s service will not undermine pay-TV subscriptions on its own. In fact, unless a consumer is getting pay TV exclusively so that they can receive HBO, I don’t think that HBO alone will undermine pay TV.

However, HBO’s entry into the market was a catalyst. Many other companies that were on the fence realized that the time was now to get into the market, and many have done so.

Do you think OTT services represent a long-term threat to pay cable networks? Or is that too far in the future to think about?

I think that OTT services will impact the profitability and revenues of pay cable networks.

They may also impact the type of offerings available. Dish Network, Verizon, and Sony are all experimenting with new ways to package and deliver linear channels. So, I think that we are already seeing OTT impact the pay-TV marketplace.

You find OTT video now accounts for nearly as much TV set viewing as DVRs. What does this mean for advertisers?

I think that ad revenues will continue to improve in the OTT space as ad buyers and sellers better leverage their ability to target consumers. OTT allows advertisers to delivery highly targeted ads.

However, I also think that we will see innovations in the DVR to allow advertisers to be able to gain additional exposure for recorded content.

Do you see OTT services incorporating more advertising in coming years? Why or why not?

Yes. Ad revenues can scale with quantity of viewing in a way that subscription business models cannot. Advertising will be huge in OTT, particularly outside of North America.

People appear to be willing to spend more on subscription services than individual downloads. Why?

People feel that they get more value for the same money. You can rent a new release movie for $5.99 through your pay-TV provider’s VOD system, about two to three hours of entertainment.

However, that same amount will get you a month of content from CBS All Access.

You note OTT services have seen the most growth among consumers 35-64, not usually the group we think of being on the edge of technology. Why them?

Many of these consumers prefer to watch content on the TV rather than smaller-screened devices. It is now much easier to get this content on the TV that it has been in the past.



Over-The-Air HDTV Makes Xbox One A Near-Perfect Cord-Cutting Console

Posted May 1, 2015 by Darrell Etherington (@etherington)

Microsoft announced support for over-the-air TV broadcasts, including HD content, early in April. I’ve been using the setup since, after enrolling in the Xbox One Preview program and receiving a Mohu Leaf indoor HDTV antenna and a Hauppauge 955Q USB TV tuner to take it for a test ride. The end result is that, for me at least, Xbox One is closer than ever to achieving its vision of being the one device to rule them all when it comes to home entertainment.

That’s sort of the vision Microsoft laid out for Xbox One when it first unveiled the console; in fact, many criticized the company after the fact for focusing too much on the new Xbox’s general media capabilities and not enough on games. But the reality of addressing the needs of a broad audience when it comes to media consumption means covering a wide range of possible content destinations, and getting there has been an uphill battle.

Recently, however, the Xbox One has acquired some new powers that mean it could basically be the only thing hooked up to my TV, and I’d be happy.

Netflix is one key ingredient, and the most long-standing in terms of Xbox One’s capabilities, but the relatively recent addition of Plex was a powerful one, and now this over-the-air broadcast TV support pretty much seals the deal.



Fox Won't Join ESPN Lawsuit Against Verizon Over Skinny Bundles

Twenty-First Century Fox will not join the Walt Disney Company and its ESPN division in suing Verizon over its skinny FiOS video bundles. Speaking at the annual Milken Institute Global Conference, company chairman and CEO Peter Rice said that the company will wait and see how it evolves.
Why This Matters: Earlier this week, ESPN filed suit against Verizon, alleging that its new Custom TV bundling product violates the terms of the programmer's licensing agreement with the pay-TV operator.
3 Takes: Deadline | Fierce Cable | Bidness Etc



QUOTE OF THE DAY 30 April 2015

“I predict in the next five years, a majority of ad-supported video will take place either on a mobile device or mediated through them. That means in the not-too-distant future, ad-supported equals mobile video… Don’t believe me? Just watch.”

– Robert Kyncl, global head of content and business operations, YouTube



Rand Paul Moves To Block Open Internet Rules

by Wendy Davis @wendyndavis, April 29, 2015, 4:44 PM

Presidential hopeful Rand Paul on Wednesday introduced a measure aimed at killing the new net neutrality rules.

Paul, a Republican from Kentucky, criticized the net neutrality rules as a “textbook example of Washington’s desire to regulate anything and everything,” and said the rules “will do nothing more than wrap the Internet in red-tape.”

“Stated simply, I do not want to see the government regulating the Internet,” the lawmaker said in a statement.

Paul's proposed “resolution of disapproval” would nullify the FCC's open Internet order, which was published earlier this month and will take effect in June. Two weeks ago, Rep. Doug Collins (R-Ga.) introduced a similar measure in the House.

Even if the House and Senate pass the resolutions, President Obama -- who called for the Federal Communications Commission to move forward with net neutrality rules -- isn't likely to sign a bill that vacates them.

The FCC's open Internet order reclassifies broadband as a utility service and imposes some common carrier obligations, including a prohibition on blocking or degrading service and on paid prioritization.

Earlier this year, FCC Chairman Wheeler dismissed criticisms that the rules would mark a government takeover of the Web. “This proposal has been described by one opponent as a, quote, 'Secret plan to regulate the Internet.' Nonsense,” he said at the agency's February meeting, when it voted to move forward with the rules. “This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech.”

Paul's move drew sharp criticism by Sen. Ed Markey (D-Mass.), a longtime net neutrality supporter. “The FCC’s Open Internet order is an historic victory for consumers, innovators, and entrepreneurs -- anyone who counts on the Internet to connect to their community and the world,” he said in a statement. “I will oppose any attempts to undo or undermine these strong net neutrality protections.”



AT&T's Broadband Promises Likely To Sell Regulators On Merger

by Wendy Davis @wendyndavis, April 27, 2015, 5:51 PM

Regulators might have killed Comcast's attempt to take over Time Warner Cable, but the Federal Communications Commission and Department of Justice are inclined to support AT&T's $48.5 billion merger with DirecTV. That's according to The Wall Street Journal, which reported today that regulators believe the deal will result in broadband deployment to rural America.

AT&T has promised regulators to expand broadband service to 15 million locations if the merger is approved. Last week, the company added in a Federal Communications Commission filing that the merger will allow the company to extend its ultrafast Gigabit fiber service to at least two million new locations.

But some advocacy groups are skeptical. Public Knowledge said in a Friday filing that the benefits to the public should be “reviewable, and auditable after the fact.”

“AT&T has claimed that efficiencies, particularly reduced per-subscriber video cost, would enable it to bring fiber service to 2 million additional households beyond its current plans,” Public Knowledge writes. “To verify this claim, the public would need to know the precise number AT&T currently plans to serve. Otherwise, as soon as AT&T deploys fiber to slightly more than 2 million households, it would be able to claim that it has met its public interest commitments.”

The telecom, which recently sued to overturn the net neutrality rules, also is promising to follow at least some open Internet principles as a merger condition, according to The Journal

The FCC's net neutrality order, which takes effect in June, prohibits broadband providers from blocking or degrading traffic and from charging content companies higher fees for faster delivery. Those regulations, while significant, appear to leave room for broadband providers to engage in questionable practices. For instance, providers could impose the kinds of data caps that make it impractical for people to shed expensive cable video subscriptions in favor of online-only services.

Public Knowledge said in its Friday filing that the FCC should examine the various ways that AT&T potentially could discriminate against online video distributors and adopt conditions that would prevent the company from doing so.





YouTube's First Decade Marked by Firsts

From user-generated outlet to content machine, Google video arm notches steady growth

4/27/2015 Author: Dade Hayes

As it passes its 10th anniversary, YouTube keeps packing more into its brief lifespan. Here are a few of the biggest highlights of its run:

--Feb. 14, 2005: Chad Hurley, Steve Chen and Jawed Karim, all early employees of PayPal, register the domain name YouTube.com for their online platform for the exploding number of digital videos.

--April 23, 2005: The first video, "Me at the Zoo," (pictured) an 18-second glimpse that delivers exactly what its title promises, is uploaded to the site.

--Oct. 9, 2006: Google buys YouTube for $1.65 billion in stock. The company has fewer than 70 employees.

--By 2007, it is estimated that the site consumes as much bandwidth as the entire Internet did in 2000.

--May 15, 2007: Viacom sues YouTube for $1 billion, alleging the site, in addition to cat videos and light-saber-wielding fanboys, trafficks in illegally uploaded clips and full episodes of many of its shows, among them South Park and The Daily Show. The suit would finally be settled in 2014, with no money reportedly changing hands.

--Oct. 29, 2011: The company's first set of original channels, part of a $100 million content investment, is unveiled. The outlay gives rise to the first multichannel networks, among them Maker Studios and Machinima.

--Dec. 21, 2012: "Gangnam Style," a music video by Korean pop star Psy, becomes the first video to reach 1 billion views.

--Feb. 25, 2014: YouTube names Susan Wojcicki, an original employee of Google whose garage served as the company's first headquarters, as its CEO.

--April 30, 2014: YouTube launches the "Google Preferred" program in a bid to attract more targeted advertising for its most popular programming.



Analyst: At-Risk Cord Cutters Just Want Cheaper TV

Viewers Want Thick Packages, Skinny Pricing 4/24/2015 6:00 PM Eastern By: Mike Farrell

In his third focus group centered on at-risk cord-cutters, or young viewers that are considering dropping their pay TV subscriptions, Sanford Bernstein media analyst Todd Juenger found that participants in his informal study didn’t necessarily want to give up any channels, they just want what they are currently getting to be cheaper.

Juenger’s latest group consisted of seven men and eight women aged 22 to 38 in Chicago and Boston – obviously not a huge sample but large enough to get some interesting insights. As with the past two groups (in New York and San Francisco), the latest panel showed no actual desire to cut their pay TV cord and the growing list of OTT skinny bundles holds almost no appeal.

Juenger held the focus groups before Verizon introduced its Custom TV package, which offers 35 base channels and the ability to choose two of seven channel packs based on genre, for $54.99 per month. Additional packs are available for an addition $10 per month.

But the analyst said that based on conversations with the participants based on other offerings like Sling TV and a fictional “fantasy bundle” of any 10 channels they wanted for $20 per month, he has a good idea of how attractive they would be. According to Juenger, the channels selected by the participants for their “fantasy bundle” would move across 4 to 6 of the available Custom TV Packs, costing between $65 and $85 per month. At that price, Juenger wrote the participants were better off sticking with their existing pay TV package.

Just like in the other focus groups, the Chicago and Boston participants said they only watched a handful of channels, but placed a high value on choice. For them, when actually forced to consider cutting the cord, they all came up with excuses not to.

“After all these focus groups, we think we figured out what consumers really want. What they really want is to pay less for the TV service they currently have,” Juenger wrote. “They think they'd like to stop paying for channels they don't care about, but they aren't willing to give up the ones they do care about, and they do place meaningful "option value" on having lots of choices.”

- See more at: http://www.multichannel.com/news/cable-operators/analyst-risk-cord-cutters-just-want-cheaper-tv/390082#sthash.i7WyKrDf.dpuf



Charter Gets a Second Chance at Time Warner Cable

According to reports, advisers for Charter Communications have reached out to Time Warner Cable to begin talks on an acquisition after Comcast withdrew its bid for the company Friday.
Why This Matters: Early last year Charter put TWC into play with a hostile takeover attempt, egged on by new investor Liberty Media. Charter was edged out by Comcast, which came to TWC with a richer offer. Late last year, Liberty Media said that if Comcast’s attempt to take over TWC fell through, Charter would almost certainly try again.
5 Takes: Bloomberg | MCN | Washington Post | Media Post | CED



ESPN Sues Verizon Over Custom TV

ESPN has filed a breach of contract lawsuit in state Supreme Court in New York against Verizon Communications over its controversial “skinny” TV package, Custom TV. Verizon pitched Custom TV as a major development, one that helps to liberate subscribers from arrangements that require them to pay for channels that they don’t watch.
Why This Matters: NBC Universal and Fox Sports have also objected to the package, saying that it violates their existing agreements. Content providers rely on the strength of packages to command high carriage fees, and ESPN, at more than $5 per cable subscriber on average, has always been the core of every bundle.
5 Takes: MCN | The Wrap | Deadline | Variety | USA Today



Commentary from Mediapost.com

Piling On The Hate: Stop Fighting Unbundling

by George Simpson, 24 April 2015, 8:07 AM

Perhaps the most concerning quote in all the copy devoted to cable channels dumping on Verizon for trying to do something everyone in the country wants was this one from a 65-year-old retired electronics salesman, who told the WSJ: “I’ve been paying for ESPN for 30 years and never watch it.”

Really? My head would not have snapped back if he had said Nickelodeon or Home Shopping Network or even Food Network, but ESPN? As in no college football? No “Monday Night Football?” No Little League baseball playoffs? No "Around the Horn!!" I think that is grounds for excommunication from the "Mystic Knights of The Male Persuasion." Leave it to the Journal to track down the singular exception to the rule.

Cable companies, who own essentially geographic monopolies, have done everything in their power from "somewhere between 8 am and 8 pm" service calls to "leasing" boxes and controllers for ridiculous amounts each month just to pad their profits, to become the Hated Utility Company replacing landline providers (who would give up a first born child to make a sale these days).

Moreover, their business revolves around charging for an average of 189 channels while Americans watch only about 17. The only reason the citizenry has not shown them the door in cord-cutting greater numbers is that they also provide access to Internet broadband -- and so become the infuriating spouse that you stay with because divorce would be too painful on the kids.

It is hard for most Americans to separate cable programmers from cable providers since it all comes through the same box. So you can expect their loathing for their local cable company to be reflected in their disgust that the programming providers are fighting unbundling. They have voted their feelings in vast numbers by subscribing to Netflix and Amazon Prime.

At the same time they are howling about Verizon violating "our existing agreements," cable programmers are starting to offer direct-to-consumer packages delivered over the Internet, a form of unbundling to be sure. And they wonder why consumers are confused and angry with their efforts to stop Verizon.

What subscribers see as an evil alliance between programmers and providers to keep TV delivered through the set-top-box expensive and anti-choice will lead inevitably to change. Look no farther than smart TVs to see the future. I predict that there will come a time (sooner rather than later) where every form of video will be in on-demand movies, Hulu, ABC, Al Jazeera, AMC, YouTube, or the yet-to-be programmed "100 Ways to Cook Chicken Network" will all be offered a la carte to consumers who will build their own programming lineups in an interface that allows them to find nearly everything ever recorded on film or video. The notion of appointment TV with the exception of major live events, will essentially disappear. Consumers won't care if the programming was produced by HBO or FX or Nabisco.

In this near future world, how you ignite sampling and build loyalty will depend less on redundant on-air promotions and more on Big Data. Finding your audience will be algorithmically easy. Figuring out how to get their attention in an essential all-on-demand world will be a different challenge. Especially if the concept of networks collapses altogether.

This is essentially what viewers want, and I think eventually will get. It might, in the end, cost consumers more to pay for a la carte programming (something the cable programmers and providers claim now in defense of bundling), but they will enjoy having control over what they pay for and can adjust their spending from month-to-month rather than being stuck with a bill (that only goes in one direction) for channels they never watch.



AT&T Pitches DirecTV Merger Benefits

Even as the Comcast/Time Warner Cable was unravelling, AT&T was promoting the public interest benefits of its merger with satellite operator DirecTV in front of the FCC and Justice Department, while trying to distance itself from the Comcast/TWC combo.
Why This Matters: In filings with the FCC earlier this week, AT&T pointed out consumers’ preference for integrated bundles of broadband and video, how the deal would benefit over-the-top providers, and reiterated its broadband deployment commitments if the deal is approved.
5 Takes: B&C | Bloomberg | L.A Business Journal | Consumerist | DSL Reports



Nielsen Data Casts Doubt on Cord Cutting Trend

Nielsen released new data on TV viewership Thursday, including the latest numbers on cable subscriptions, subscription video on-demand services such as Netflix and the amount of user churn for both.
Why This Matters: The numbers show that 93% of cable subscribers who also have a subscription-video-on-demand service are more likely to drop the SVOD than they are cable. “Cable may have a little more staying power than it’s actually being given credit for recently,” said Glenn Enoch, senior VP of audience insights for the measurement and data service.
3 Takes: B&C | Variety | Media Life



Comcast Officially Drops Time Warner Bid: ‘Today, We Move On’

Comcast CEO Brian Roberts announced this morning that the proposed $45 billion merger with Time Warner Cable is officially dead. “Today, we move on,” said Roberts, pointing out that the deal was structured so that if the government didn’t agree, Comcast could walk away.
Why This Matters: The collapse of the deal will have a ripple effect in the cable industry, as Charter’s plan to acquire 3.9 million subscribers from Comcast as well as its plan to acquire Bright House Networks were contingent on the merger being consummated.
5 Takes: B&C | Variety | WSJ | Bloomberg | THR

23 April 2015

Comcast Plans to Walk Away from Time Warner Cable Deal

According to a report that originated from Bloomberg, Comcast is planning to walk away from its proposed takeover of Time Warner Cable after regulators at the FCC and Justice Department planned to oppose the deal.
Why This Matters: According to Bloomberg’s sources, Comcast is planning to make a final decision on its plans Thursday, and an announcement on the deal’s fate may come as soon as Friday. Comcast met privately with DOJ officials on Wednesday in a bid to rescue the deal but apparently there were no concessions that Comcast could offer that would get the DOJ to give its blessing to the merger.
5 Takes: Bloomberg | MCN | Venture Beat | BGR | The Hill



Netflix Eating Into TV Ratings

According to a report from MoffettNathanson Research, Netflix is responsible for a big chunk of the ratings declines registered by the traditional TV networks and its share of viewership is likely to grow.
Why This Matters: Netflix, which streamed 10 billion hours of video last quarter, now represents close to 6% of total TV viewing in the U.S., said analyst Michael Nathanson. He figures that Netflix accounts for 43% of the ratings decline the networks experienced last quarter. What makes this more painful for TV networks is that they’ve helped Netflix by selling them their re-runs – a high-margin business they were happy to have. The studios may try to cut back on those sales.
4 Takes: Re/code | B&C | Media Post | Fierce Cable



Netflix’s Pursuit of TV Domination Has a New Step: Ownership

by Lucas Shaw12:00 AM EDT April 21, 2015

For most of its rapid ascent of the TV business, Netflix Inc. has rented shows. Now it wants to own them.

Like a major Hollywood studio or competitor HBO, the company will own many of the 20 or more original shows that debut on its streaming service next year, Chief Executive Officer Reed Hastings said in an interview.

“We’ve continued to expand our creative role on the shows,” Hastings said. “Now we’re taking on ownership and production.”

It’s a new step for Netflix, which in the past has licensed programs from studios like Sony Pictures and Weinstein Co. While fans associate “House of Cards” with Netflix, producer Media Rights Capital owns the hit series. As a result, U.S. viewers can buy past seasons on Amazon.com and Germans can see season three on Sky Deutschland.

While Hastings wouldn’t discuss titles, the coming originals that Netflix bought include “Flaked,” a Will Arnett comedy from the makers of “Arrested Development,” according to a person with knowledge of the matter who asked not to be named because terms aren’t public.

Ownership achieves several objectives for the Los Gatos, California-based company, beyond providing shows others don’t have. It eliminates the sometimes territory-by-territory tracking of streaming rights, and lets Netflix unlock revenue from selling DVDs or license rights to other services.

It also ensures a supply of new material, should conventional TV networks cut back on selling streaming rights to their shows to Netflix.

HBO’s Playbook

“We already expect U.S. TV networks to increasingly buy out the SVOD [streaming video on demand] window when they acquire a show and it would not be a surprise if one or two studios stopped selling shows to Netflix,” analysts at UBS AG wrote in a report last week.

Netflix is taking a page from the playbook of HBO, Time Warner Inc.’s premium cable network. Though both license movies from studios, HBO owns the global rights to most of it biggest hit series, including “The Sopranos,” “Six Feet Under” and “Game of Thrones.”

The test is whether Netflix, competing with more seasoned producers at HBO, FX, AMC and Showtime, can do it as well, according to Michael Pachter, an analyst with Wedbush Morgan Securities in Los Angeles.

When it licenses shows, Netflix pays about half of what it would cost to produce them, according to Pachter -- giving up some of the upside, such as DVD revenue, when shows are a hit, but also limiting the losses that come with owning programs no one wants to watch. Netflix hasn’t gone through the “painful process” of creating a show from scratch, he said.

Good Decisions’

“The real risk is that they might not make very good decisions,” Pachter said. “It isn’t clear to me that Netflix has an upper hand in negotiating rights so that they position themselves to capture significant economic rent.”

Shares of Netflix soared 26 percent last week as the company reported signing 4.9 million new subscribers in the first quarter and credited exclusive shows such as “Orange Is the New Black.” That topped the company’s forecasts and lifted the worldwide total to more than 62 million.

Hastings cited the popularity of Netflix originals “House of Cards” and new shows like “Unbreakable Kimmy Schmidt” and “Bloodline.”

The company plans to dramatically increase production of originals over the next few years, making exclusive shows a larger part of its $9.8 billion long-term streaming budget. Its content obligations have grown by 71 percent over the past two years.

The company could make as many as 40 new shows a year by 2018, double its output this year, according to UBS. Costs, amortized over a period of years, could make it harder for the company to deliver the profit leverage investors expect, UBS said.

“While we acknowledge that Netflix’s subscriber growth is impressive, we remain skeptical that it can deliver the leverage many investors expect,” UBS said.



Cablevision Launches ‘Cord-Cutter’ Packages

Cablevision Systems is offering "cord-cutter" packages consisting of a high-speed data connection and a digital antenna.

By: Mike Farrell 4/23/2015 2:45 PM Eastern

Cablevision Systems is launching a series of cord-cutter packages, basically a mixture of high-speed Internet and a digital antenna to grab over-the air networks.

Introductory prices for the service will range from $34.90 per month to $44.90 per month and in some cases including Cablevision’s Freewheel WiFi-only phone service and are specifically targeted at young customers who are increasingly balking at paying high prices for cable TV. Data speeds will range from a basic 5 Megabit per second offering to 50 Mbps and beyond. Customers also have the option of adding Home Box Office standalone service HBO Now at an additional charge.

The offerings are different from so-called “skinny TV” packages in that the Cablevision offering includes no cable or broadcast networks at all. Optimum TV is specifically excluded.

“As a connectivity company, Cablevision is reimagining its relationship with its customers,” said chief operating officer Kristin Dolan in a statement. “Our new ‘cord cutter’ packages take a modern approach to traditional triple-product bundles and provide real alternatives that fit new consumer lifestyles.”

With the cord-cutter packages, millennials will be able to access SVOD apps like Netflix and Hulu, hook up a Roku Box or Apple TV device or subscribe to low cost over-the-top offerings like Sling TV that they pay for separately over their broadband connections. Broadcast networks will be available for free over the air using a Mohu Leaf 50 digital antenna (valued at $69.99). Mohu, which got its start in 2010 as a maker of antennas for the military, has been one of several antenna manufacturers that have targeted the pay TV market.

Cablevision CEO James Dolan has been a big proponent of connectivity, stressing that the cable operator has to make moves to ensure its customers get the products and services they want. That could mean that video drops a notch on the priority chart – Dolan has said in the past that given the choice between video and data, consumers will choose data every time. And the company has backed up that strategy by building out one of the most robust WiFi networks in the industry and in February launching Freewheel, a WiFi-only phone aimed at data hungry consumers and priced at $29.95 per month for non-Cablevision customers and $9.95 per month for existing customers.

See more at: http://www.multichannel.com/news/news-articles/cablevision-launches-cord-cutter-packages/390048#sthash.zC7VIfJ0.dpuf



Public Knowledge wants to help defend Internet rules in court

By Mario Trujillo - 04/22/15 02:10 PM EDT

The advocacy group Public Knowledge is asking to help defend new net neutrality rules against the spate of lawsuits seeking to tear them down.

While a half dozen critics of the new regulations are already challenging the rules, Public Knowledge filed a motion in the U.S. appeals court in D.C. on Wednesday to help the Federal Communications Commission.

The group lobbied hard for rules approved in February that would reclassify Internet access under authority governing traditional telephones. The rules are meant to give the FCC broader power to enforce rules requiring service providers to treat all Internet traffic equally.

Public Knowledge said the commission "lawfully reclassified broadband Internet access service as a telecommunications service, and adopted a framework for rules to protect innovation, investment, competition, and free expression by protecting an open Internet."

The group said it represents people who would be harmed if the rules were struck down and relies on the open Internet to conduct business. Court rules require a partying wishing to intervene in a case to have an interest in the outcome.

Service providers like AT&T and other telecom trade groups rushed to file lawsuits last week, shortly after the regulations were published in the Federal Register. Aside from AT&T, others filing lawsuits include the U.S. Telecom Association, Alamo Broadband, the National Cable & Telecommunications Association, The Wireless Association, the American Cable Association, and CenturyLink.

Observers have said the court battle could drag out for years, possibly into the next president's term. Verizon led the charge against the FCC's last net neutrality rules, which were struck down early last year.

But Public Knowledge argued the FCC "followed the opinion of the court" after that case to make the rules withstand attack this time around.



Streaming Overtakes Live TV Among Consumer Viewing Preferences: Study

April 22, 2015 Todd Spangler NY Digital Editor@xpangler

U.S. consumers are more inclined to stream entertainment from an Internet service than tune in to live TV, according to the results of a new survey from consulting firm Deloitte.

Video-streaming services such as Netflix, which are now used by more than 42% of American households, have overtaken live programming as the viewing method of choice, Deloitte’s study found. About 56% of those surveyed now stream movies and 53% stream TV shows on a monthly basis, as compared with 45% of those who prefer to watch TV programs live.

And Internet-video services are valued more highly than cable or satellite TV among consumers aged 14-25, a group Deloitte dubs “Trailing Millennials” — another worrisome indicator for the pay-TV biz. For that age group, 72% cited streaming video as one of the most valuable services versus 58% who said the same for pay TV.

Older age groups still value pay-TV more highly. For Generation X (32-48), 80% picked pay TV and 47% selected streaming among the most valuable services, while among Baby Boomers 89% cited pay TV and 43% cited streaming.

According to the survey, 25% of Trailing Millennials either cancelled their pay-TV services in the last 12 months or haven’t had one for more than a year, compared with 16% of overall respondents.

Moreover, younger viewers now more commonly watch TV shows on mobile devices or PCs — rather than on a TV set. Among Trailing Millennials, 57% of time spent watching TV programs occurs on computers, tablets and smartphones. Other age groups still mostly watch on traditional TVs (57% of time spent viewing for Leading Millennials, 70% of Gen X, 81% of Baby Boomers and 90% of those 68-plus).

The report also found that binge-watching — which Deloitte defined as watching three or more episodes in one sitting — is prevalent, with about 68% of consumers engaging in marathon viewing. Of those, 31% binge-watch at least once a week (and 42% of those aged 14-25 binge at least weekly).

Meanwhile, the vast majority of consumers — 90% of Americans — multitask while watching TV, which includes activities such as browsing the Internet, reading email and text messaging. Both millennials and Generation X (age 32-48) engage in an average of three additional activities while watching television (versus two for Baby Boomers and one for those 68 and older).

The study also found that less than one-fourth of multitasking activities are actually related to the TV program being watched. And nearly 75% of those surveyed said they tend to multitask more during TV ads than during digital ads.

Deloitte’s ninth annual “Digital Democracy Survey” was fielded by an independent research firm from Nov. 3-19, 2014, which polled 2,076 U.S. consumers online.



Verizon Launches Custom TV In Spite of ESPN’s Objections

Verizon rolled out its new Custom TV service on Tuesday. The service gives customers the ability to pick packages of programming based on genres. Customers can choose from seven different genres: Kids, Pop Culture, Lifestyle, Entertainment, News & Info, Sports and Sports Plus.
Why This Matters: When asked about reported pushback from Disney-owned ESPN regarding the sports network’s inclusion on FiOS Custom TV, Verizon CFO Fran Shammo said, “We believe we are allowed to offer these packages under our existing contracts.” ESPN said last week that Verizon’s new TV bundles would not be authorized by existing agreements with the telecom.
5 Takes: Re/code | THR | Home Media | Variety | The Verge



OTT Sub Revenue To Reach $31.9 Billion by 2019

The emergence of services like Netflix and Amazon Prime Instant Video signals “the end of broadcast TV as we know it,” according to a new report from Juniper Research. According to the research company, the OTT market will generate revenues of $31.6 billion by 2019, up from the $8 billion taken last year.
Why This Matters: The report argued that traditional broadcasters are facing increased competition as more services go over-the-top of pay TV incumbents, allowing distributors such as Sling TV to provide customers with a cheaper, tailored alternative to cable TV, driving the trend for cord cutting. Juniper also predicted that 4K would drive demand, though it noted early uptake of such services via Netflix and YouTube has been slow thus far.
4 Takes: B&C | TBI Vision | Rapid TV News | Broadband TV News



The Tide Is Turning Against Comcast’s Proposal To Buy Time Warner Cable

Posted Apr 20, 2015 by Sen. Al Franken (@alfranken)

Reports that attorneys at the Department of Justice (DOJ) may recommend blocking Comcast’s proposed acquisition of Time Warner Cable are good news, because if this $45 billion deal goes through, it will create a telecom behemoth unlike anything we’ve ever seen before.

Comcast is already the nation’s largest cable company and largest broadband Internet provider; Time Warner Cable is the second-largest cable company and third-largest broadband Internet provider. Under the Federal Communications Commission’s (FCC) updated definition of broadband, the new mega-Comcast would control 57 percent of the high-speed Internet market.

This colossus of a company would have unmatched power to destroy its competition, abuse its customers, and bully the government agencies charged with regulating it. Consumers would face even higher prices, even fewer choices, and, if you can believe such a thing is possible, even worse service.

That’s why I’ve been a vocal opponent of this proposed acquisition since shortly after it was announced last year. I think consumers should come first when it comes to technology policy – and I believe they’ll get a raw deal if this transaction is allowed to go through.

The fight to stop this acquisition is an uphill battle against a corporation that is already incredibly powerful. But there are good reasons to believe we have a shot.

Here’s one of them: A year ago, it looked like net neutrality was in real trouble. Even though the Internet had always been a free and open platform, the big Internet service providers (ISPs) had been pushing the FCC to create fast and slow lanes online – and in May 2014, the FCC issued a draft proposal that would have done exactly that. ISPs like Comcast stood to make a ton of extra money by charging websites through the nose for access to the fast lanes, but for consumers and small (and most large) businesses, the end of net neutrality would have been a disaster.

So we organized, and we fought back. Millions of Americans raised their voices in protest – signing petitions, writing letters, even showing up at congressional hearings. And we won: The FCC changed its mind and decided to adopt bright-line rules to preserve net neutrality, ensuring that the Internet will remain a place where everyone can participate on equal footing, without fast and slow lanes, and free from interference from the big ISPs.

The successful effort to save net neutrality is an example of how grassroots organizing can overcome the big guys’ lobbying power. But it also provides a prime example of how duplicitous these big guys can be in trying to get their way.

During the net neutrality debate, Comcast ran ads touting themselves as champions of net neutrality. In fact, they boasted that they were “the only ISP in America legally bound by full net neutrality rules,” and that acquiring Time Warner Cable would mean “extending that protection to more people.”

This was deeply misleading. Comcast was indeed legally bound to obey net neutrality as a condition of their acquisition of NBCUniversal a few years back. But that condition was set to expire in 2018. And even though I asked repeatedly, both in letters and in person at Senate hearings, Comcast refused to commit to continuing to abide by those net neutrality rules after that date.

Another hint that Comcast was being less than sincere about their support for net neutrality was that they deployed their massive army of lobbyists to try to convince the FCC not to impose strong net neutrality protections. And when the FCC ultimately decided to side with consumers in February 2015, Comcast went nuts, protesting that net neutrality would ruin their business plan (and warning that legal action would ensue).

And believe it or not, even after all this, Comcast continued to run online ads claiming that support of net neutrality is an argument in favor of their proposed acquisition of Time Warner Cable, because the deal would, in their words, mean “net neutrality for more people.” This is nonsense: Thanks to the FCC’s new rules, net neutrality is now the law of the land for all broadband providers, regardless of whether this acquisition is approved.

Comcast has deliberately misled on net neutrality from day one. But while the net neutrality issue has been resolved, there are many other concerns about what the deal would mean for the broadband market – and for consumers’ cable and Internet bills. And net neutrality, as it turns out, isn’t the only area where Comcast has proven to be greedy and dishonest.

When the Comcast/NBCUniversal acquisition was on the table, I and others worried about vertical integration: Comcast already owned the pipes through which cable programming flowed, and now they’d also own NBC, MSNBC, Telemundo, Bravo, USA, and numerous other popular networks. So, as a condition of the deal, Comcast had to agree to something called “neighborhooding” – they had to promise to locate their own channels in the same part of the dial as competing channels, instead of giving their own programming favorable locations and relegating the competition to the outer reaches of the cable channel lineup where viewers would never be able to find it.

Well, guess what happened. CNBC, a business channel owned by Comcast, was given a prime location, while Bloomberg’s business channel, a direct competitor, got stuck in the cheap seats.Forget about the same “neighborhood” – Comcast stuck Bloomberg in a different time zone.

As another condition, Comcast agreed to create a standalone broadband product so that people who only wanted Internet service and not cable TV wouldn’t have to buy an expensive bundle. Comcast created the product – they just didn’t tell anyone about it. Not only did they fail to actively promote the standalone product, they left it out of pricing materials and declined to offer it at all retail locations.

The FCC fined Comcast for violating this condition, and ordered the company to train its call center employees so that they could make customers aware of the standalone product. Comcast promptly set out to do the exact opposite, telling Wall Street investors that, with Time Warner Cable in the fold, they would teach their employees to “bundle better,” pushing the packaged cable and Internet services more aggressively.

No company should be entrusted with the kind of dominant market position Comcast is seeking in this deal, especially when the company in question has proven that they simply can’t be trusted.

That’s why concern is spreading about this proposed deal. More and more consumer groups are coming out against it, and business coalitions are doing the same (even though, in a telling example of the outsized power Comcast already has, some of its competitors have declined to join the opposition because, they tell me, they’re concerned they’ll face retribution from the telecom giant if they do). Meanwhile, Wall Street is no longer betting that the deal is a sure thing, and prognosticators have lowered their odds that it will happen.

No company should be entrusted with the kind of dominant market position Comcast is seeking in this deal, especially when the company in question has proven that they simply can’t be trusted.

Let’s be clear: Anytime we’re going up against Comcast’s lobbying might, we’re the underdog. And while more and more Americans are voicing their opposition to this deal, the final decision will rest with the FCC and DOJ.

But the FCC’s decision on net neutrality has given me new hope that, with a loud enough movement – with enough people like you organizing online, calling your members of Congress, and writing to the FCC and DOJ – we might just be able to win another uphill battle. We might just be able to stop this deal before Comcast gains even more power to pad their profits at consumers’ expense.

Editor’s Note: U.S. Senator Al Franken was born on May 21, 1951, and grew up in St. Louis Park, Minnesota. Before running for the Senate, Al spent 37 years as a comedy writer, author, and radio talk show host and has taken part in seven USO tours, visiting our troops overseas in Germany, Bosnia, Kosovo, and Uzbekistan-as well as visiting Iraq, Afghanistan, and Kuwait four times.



Only A Matter Of Time Before Netflix Takes Advertising?

by Wayne Friedman, April 21, 2015, 12:03 PM

Sharply divided opinions are focused on Netflix’s future. Some believe the company will continue to soar; others believe it’s a disaster waiting to meet its media maker.

In that regard, one veteran media agency buying executive, speaking with TV Watch, asked an incredible question: “When will Netflix start taking TV advertising?”

Though Netflix CEO Reed Hastings swore that will never happen, some analysts believe the wild spending for TV-movie content by the company — a projected $5 billion for programming in 2016— means Netflix will have to answer to the financial media gods one day.

That $5 billion will be more than HBO, Showtime, Amazon, and Starz spent on programming in 2014 -- combined.

The positive news that could keep Netflix out of clutches of TV-video marketers? One analyst estimates the company could grow by triple in five years to an eye-popping 180 million worldwide customers.

With its reasonable price point of $8.99 a month, you can see why some consumers can’t turn down a run with Netflix. Netflix has over 62 million global subscribers and over 40 million in the U.S.

And cord-cutters? Worried entertainment consumers are an easy target, those who are spending $90 to $125 a month and need financially to make a change.

Analysts like to make comparisons to that one big pay TV player: HBO. That similarity isn’t correct. Consumers are using Netflix as an TV service “anchor” as a partial replacement for slimming down on big cable TV channel packages.Netflix has the added benefit of allowing viewers to blow through a year-long 13-episode series in a weekend.

But that added pressure to ramp up production in wildly accelerated ways, bolstering Netflix’s original TV and movie slate, has caused concern. So, Netflix will need to find a way to keep that very modest $8.99/month price tag around for consumers. And advertising might be an answer.

Some history here: AMC — the network of “Walking Dead” and “Mad Men” — started off as a cable channel with no advertising. It just ran old movies.

Then over time it gradually added “sponsorship”-like advertising opportunities, messaging that would appear before and after programming. Now we are left with a network with traditional TV advertising/commercials.

PBS programming has consistently added sponsorship/advertising messaging — including video — before and after TV programming content.

So could Netflix nudge into a marketplace with some kind of digital “pre-roll” advertising, stuff digital video consumers are now used to? Better still, could Netflix also offer up the option to viewers to skip the pre-roll ad after five seconds?

More than other new digital platforms, Netflix has the added burden of dealing with a massive misstep of just few years ago, when it wanted to raise prices by separating its now DVD by mail business from its new and fast growing streaming video service.

Netflix will continue to walk the line with customers. But if it will never consider adding some revenue-producing advertising, how will its business model evolve?



Comcast, TWC Execs Set to Meet with DOJ Wednesday 22 Apr 2015

Top executives from Comcast and Time Warner Cable are scheduled to meet with officials from the U.S. Justice Department Wednesday for their first one-on-one discussions since the $45.2 billion merger of the two cable companies was originally proposed in February 2014.
Why This Matters: Word of the meeting, first reported by the Wall Street Journal, comes after a Friday Bloomberg report said that the DOJ is leaning against approving the deal. Meanwhile, if Comcast and TWC are able to work something out with the Justice Department, deal conditions could be stringent.
5 Takes: WSJ | MCN | Ars Technica | NY Daily News | Fierce Cable



ESPN Calls Foul on Verizon’s Pay TV Plan

Verizon's plan to offer cheaper programming bundles to Fios subscribers has raised the ire of ESPN, which announced late Friday that Verizon "does not have the right" to offer ESPN's channels outside of a standard cable package.
Why This Matters: In Verizon's proposed system, Fios customers would subscribe to a base channel package, then choose smaller, supplemental channel packs of about 10 to 17 channels for $10 more. ESPN and ESPN 2 would be relegated to an optional Sports package. However, the Disney-owned sports broadcaster said that such a skinny bundle offering "would not be authorized by [ESPN's] existing agreements."
5 Takes: Re/code | WSJ | CNN | CNet | Home Media



CenturyLink Sues FCC Over Net Neutrality Rules

CenturyLink is the latest company to file a lawsuit against the FCC’s Open Internet Order. The company said that it spends hundreds of millions of dollars a year to “build, maintain and update an open Internet network and does not block or degrade lawful content,” and argued that using Title II to impose network neutrality rules is too heavy-handed.
Why This Matters: CenturyLink chose not to let one of the industry trade groups like the American Cable Association (ACA), CTIA, NCTA or USTelecom – all of which also filed suits – take the lead on these issues. The rule was officially published last Monday, and challengers have until April 23 to file challenges if they want to participate in a lottery to determine which court hears the case.
4 Takes: MCN | Fierce Telecom | CED | The Register



Comcast Deal Collapse Would Kill Other Mergers in Domino Effect Gerry SmithHYPERLINK "authors/APKMjU4W_3A/alex-sherman"Alex Sherman 7:24 PM EDT April 17, 2015

The potential collapse of Comcast Corp.’s merger with Time Warner Cable Inc. wouldn’t just be a setback for those two companies. It would also unwind other pending deals and have a wide-reaching impact on the cable industry.

Staff attorneys at the Justice Department’s antitrust division are nearing a recommendation to block Comcast.’s plan to buy Time Warner Cable and combine the two largest U.S. cable providers, according to people familiar with the matter.

A rejection would be a blow to Comcast, which would have to give up on valuable cable and broadband assets in major U.S. cities including New York and Los Angeles. The $45.2 billion merger proposal is also a way for Philadelphia-based Comcast to fend off competition from phone companies, satellite providers and Web services like Netflix Inc. that have taken hundreds of thousands of its TV subscribers in recent years.

Another company has a lot at stake: Charter Communications Inc., the No. 4 in the industry. Charter, which counts billionaire John Malone as its largest investor, has agreed to take control of 3.9 million Comcast cable-TV customers to ease approval for the Comcast-Time Warner Cable merger. If that fails, Charter won’t get those customers. Another Charter deal, the recent agreement to purchase of Bright House Networks, would also be in jeopardy.

Charter, which lost out to Comcast a year ago in its effort to buy Time Warner Cable, could get another shot at it. Malone has said he would try again if the deal with Comcast fell apart.

A new attempt to buy Time Warner Cable could be a lot more expensive. Last year Charter and Time Warner Cable couldn’t agree on a price. Since Charter made an offer in January 2014, Time Warner Cable’s stock has risen 13 percent. This time around, Stamford, Connecticut-based Charter would need to pay $150 to $160 a share, much higher than its initial $132.50 bid, according to Amy Yong, a media analyst at Macquarie Capital USA Inc.

Meanwhile, Time Warner Cable has the right to block Charter’s agreement with Bright House as part of its long-time arrangement to negotiate programming and other deals for Bright House, the sixth-largest cable provider. Time Warner Cable could decide to buy the smaller company under similar deal terms to fend off Charter, Yong said.

Even if the Comcast-Time Warner deal is blocked, it may not be dead. The Federal Communications Commission would need to rule on the merger. And Comcast could convince a judge to throw out a government lawsuit blocking the purchase.

If the deal falls apart, Comcast has plenty of other options, according to Rich Greenfield, an analyst at BTIG Research. The cable giant could seek to buy T-Mobile US Inc. to enter the wireless business or bolster its online video offerings with a company like Time Warner, Greenfield wrote in a blog post last month. Comcast could also make an international acquisition.

“Given the strength of Comcast’s balance sheet and an insatiable appetite for acquisitions, we do not believe Comcast would be content with its existing portfolio,” Greenfield wrote.



Netflix Is Betting Its Future on Exclusive Programming

By EMILY STEELAPRIL 19, 2015

LOS GATOS, Calif. — It is April 9 just before midnight in the war room of Netflix’s headquarters here, where the smell of popcorn fills the air and a team of engineers, social media experts and other specialists starts counting down the seconds until the new “Daredevil” superhero series goes live on the streaming service.

At the stroke of 12, applause breaks out in the room. Flutes of Champagne are passed around as the Netflix team checks that the series is available for binge watching across devices in more than 50 countries around the world.

“Daredevil” is the 17th Netflix original series to make its debut this year, representing a bold bet by the company to significantly increase its investment in exclusive programming. Just three years after Netflix started streaming its first original series, “Lilyhammer,” the company is planning 320 hours of original programming in 2015. That is about three times what it offered last year.

Reed Hastings, Netflix’s chief executive, is a connoisseur of them all, though he admits some run more to his tastes than others. During an interview the next afternoon, he said that he had watched the first episode of “Daredevil,” but called it “too violent” for him.

“I can barely handle ‘House of Cards,’ ” he said, referring to the political drama starring Kevin Spacey that put Netflix on the map in 2013 as an outlet for innovative programming with high production quality. “When someone dies, I’m like ‘Wooooow turn it off.’ ”

Mr. Hastings called himself a fan of “Unbreakable Kimmy Schmidt,” the new Tina Fey comedy starring Ellie Kemper about the life of a Pollyanna-like woman after her escape from a cult after 15 years. He said that he intermixes the series with the dark family drama “Bloodline.”

“It’s the tension of ‘Bloodline’ versus the mirth of ‘Unbreakable,’ ” he said.

That expanding range of original programming available on Netflix signals how Mr. Hastings wants to position the company as the entertainment world undergoes a digital revolution.

Traditionally, television networks needed to stand for something to carve out an audience, he said, whereas the Internet allows brands to mean different things to different people because the service can be personalized for individual viewers.

That means that for a conservative Christian family, Netflix should stand for wholesome entertainment, and, for a 20-year-old New York college student, it should be much more on the edge, he said.

“We want the original content to be as broad as human experience,” he said.

The emphasis on original content is an extension of Netflix’s long-term view that the Internet is replacing television, that apps are replacing channels and that screens are proliferating, Mr. Hastings said.

“We’ve had 80 years of linear TV, and it’s been amazing, and in its day the fax machine was amazing,” he said. “The next 20 years will be this transformation from linear TV to Internet TV.”

Netflix shares soared about 25 percent last week on news that it had added a record 4.9 million subscribers in the first quarter of 2015, bringing its total number of paid streaming subscribers to 59.6 million. The company beat expectations for growth and gave investors reason to believe that it still has much more room to grow.

“Think about the simplistic equation: More good content equals more viewing, more viewing means more subscribers, more subscribers means money to spend on more programming, which means more subscribers,” said Rich Greenfield, an analyst with BTIG Research. “It is a virtuous cycle.”

But some analysts have expressed concern about the company’s long-term prospects for more growth in the United States, where it is profitable. Another big concern is the increase in costs from paying for content, especially if Netflix cannot sustain the same hit level as its early efforts.

Global expansion, which is more costly and drags on profits, is also a concern. Netflix has said it would complete its international efforts in the next two years.

Netflix also faces a new wave of intense competition in the United States as a number of tech and media companies introduce streaming services. That includes HBO, which recently started HBO Now, which does not require a cable or satellite subscription.

Mr. Hastings said that he welcomed the new streaming entrants. Rather than a competitive threat, they represent the realization of the benefits of on-demand streaming television that allows people to watch shows on their own schedule and on the devices of their choosing, he said.

Mr. Hastings joked that people would know HBO is serious about streaming when it reverses the way it refers to its offerings and rebrands HBO Now as HBO. “They will take HBO linear and call it HBO Linear,” he said. “That is HBO if you really want to watch it on somebody else’s schedule.”

He added that people are likely to subscribe to more than one service because services offer different programs and that the rivalry will not only increase creativity but also provide a stronger alternative to traditional television.

“It will be like the Yankees and the Red Sox,” Mr. Hastings said. “I predict HBO will do the best creative work of their lives in the next 10 years because they are on war footing. They haven’t really had a challenge for a long time, and now they do. It’s going to spur us both on to incredible work.”

Richard Plepler, the chief executive of HBO, said in a recent interview that the increasing competition was forcing the network to focus even more intently on programming.

“People are going to take gibes,” he said. Pausing after each word for effect, he added; “Play our game. That is what we focus on. I can’t emphasize this enough: We cannot get distracted.”

Some television executives have started to worry that the rise in Netflix viewing — its members streamed 10 billion hours in the first quarter — is cutting into the time that people spend watching traditional, ad-supported television.

The fear is that advertisers will start cutting their spending on television, which captures about $70 billion in the United States each year, and shift to digital outlets. That has led to questions about whether television networks would reduce the amount of programming they sell to Netflix.

Mr. Hastings said that he does not view Netflix as a threat to ad spending because the service is commercial free. If the television networks stop selling shows, he said, the company has a game plan. “We just do more originals,” he said.

15 April 2015

Netflix Shares Up, Profit Down As Subscribers Grow

Netflix reported that net income fell in the first quarter as it surpassed 40 million U.S. subscribers. Net income was $24 million, or 38 cents a share, down from $53 million, or 86 cents a share, a year ago. The company blamed foreign exchange fluctuations for the earnings being lower than expected. Meanwhile revenues rose to $1.4 billion in the quarter from $1.07 billion a year ago.
Why This Matters: The company’s stock price went up 12.7% in post market trading following the Q1 report. While financial results for the quarter were mixed, they showed that Netflix had 62.3 million global streaming subscribers at the end of the quarter — about 500,000 more than expected.
5 Takes: B&C | Deadline | Re/code | Variety | The Wrap



Lawsuits Against FCC Net Neutrality Rules Pile Up

Several industry trade groups began filing lawsuits against the FCC’s new Net Neutrality rules today, including the NCTA, the ACA and the CTIA.
Why This Matters: The FCC officially published its new net neutrality rules to the Federal Register yesterday, opening the door to legal challenges. Opponents wasted no time. The rules are expected to face prolonged legal challenges.
5 Takes: Deadline | Fierce Cable | Wireless Week | Variety | The Verge



Charter and Arris Team Up To Buy ActiveVideo for $135 Million

Arris and Charter Communications announced that they have formed a new joint venture to acquire ActiveVideo, a provider of cloud-based interfaces and apps for $135 million.
Why This Matters: Charter has been leaning heavily on ActiveVideo for a new cloud-based interface that can run on the MSO’s new hybrid IP/QAM Worldbox, as well as older QAM-only boxes. Charter plans to expand this deployment with its acquired Bright House Networks systems once the Bright House purchase is closed. The acquisition will shore up Arris’s position at Charter and tighten its technology ties to the MSO.
4 Takes: MCN | Light Reading | CED | Fierce Cable

April 14, 2015



Decline of TV viewing ‘accelerating,’ says Accenture

http://www.digitaltveurope.net/wp-content/uploads/2015/04/Accenture-digtial-video-connected-consumer.png

Video consumption across different devices, anytime, is accelerating the decline of traditional TV viewing, according to a new global research report by Accenture.

The ‘Digital Video and the Connected Consumer’ study claims there to be “double-digit declines in TV viewing globally” among viewers of “nearly all ages”.

“We are seeing a definitive pendulum shift away from traditional TV viewing,” said Gavin Mann, Accenture’s global broadcast industry lead.

“TV shows and movies are now a viewing staple on mobile devices of all shapes and sizes, thanks to improved streaming and longer battery life. The second screen viewing experience is where the content creators, broadcasters and programmers will succeed or fail.”

Among 14 to 17 year-olds, there was a 33% year-on-year decline in accessing TV shows and movies from TV screens on a daily and weekly basis. However, the same age group accessing the same type of content on laptops was up 16%, on tablets up 12% and on smartphones up 9%, according to Accenture.

Similar trends emerged among those aged 18-34, with a 14% year-on-year decline in watching TV shows and movies on the TV and gains across other devices.

People aged 35-54 watched 11% less TV and those aged 55 and over also watched a reported 6% less on the main screen in the house.

“We found that the TV is the only category of device experiencing uniform, double-digit usage declines, across different types of media worldwide, among viewers of nearly all ages. In other words, it’s not just ‘screenagers’ who are turning their backs on the TV although 14-17 year-olds are abandoning TV screens faster than any other group. Profound changes are taking place in how all of us consume video content – and they’re happening right in front our eyes,” said Accenture.

The report also found that people watching TV do so in combination with at least one other device, with 87% of consumers reported to also use their smartphone, tablet, games console, e-book or laptop whilst watching TV.

“In other words, the second screen is firmly established as a key element of the value proposition for all media companies,” said Accenture.

5 Things to Know About Cord-Cutters

The rise of the Web has created a generation of “cord-cutters,” people who drop cable and satellite TV contracts in favor of online streaming services like Netflix and Amazon Prime Instant Video, and of “cord-nevers” who never signed up for pay-TV in the first place.

12 Apr 2015 By Keach Hagey Wall Street Journal

Here’s what to know about cord-cutters:

1 There Are a Growing Number of Them

The 13 largest pay-TV providers in the U.S., representing 95% of the market, lost about 125,000 video subscribers in 2014, marking the second consecutive year for pay-TV losses, according to the Leichtman Research Group. In 2013, the loss was 95,000.

2 The Real Problem May Not Be "Cutters," but "Nevers"

Some viewers never connect the cord–the “cord-nevers” who are usually encompassed in the term “cord-cutter.” The relatively modest losses in pay-TV video subscribers mask a larger decline in pay-TV penetration, as new households form faster than people are signing up for pay TV. Analysts at MoffettNathanson estimate pay-TV subscribership will continue to decline 01.% a year for the next few years, while new household formation will grow 1% a year.

3 There's Rapid Growth in Households Subscribing to Broadband but Not Pay TV

SNL Kagan estimates that this number reached 10.9 million by the end of 2014, up from 9.9 million the year earlier – more than 10% growth in a single year. The size and growth rate of these “broadband-only homes” is a primary factor that prompted HBO to begin selling itself outside the pay-TV bundle this month, and inspired similar moves by CBS Corp., Viacom Inc. and NBCUniversal.

4 Broadband-Only Homes Like to Pay for TV, but Not to Pay a Lot

HBO research found that roughly half of the 10 million broadband-only homes it studied subscribed to a subscription video-on-demand service like Netflix, Amazon or Hulu, indicating there was appetite for paying for TV of some kind. The problem, analyst say, is that these households often don’t want to pay for hundreds of channels they didn’t watch.

5 Cord-Cutting Might Not Be So Bad for Cable Companies

The programming that makes up the traditional pay-TV bundle is very expensive and getting more so, which has led cable companies to begin shifting their business more toward selling broadband. Today, video is only about 40% of cable companies’ profits, according to MoffettNathanson. For a typical cable operator, a 10% loss in video subscribers trims revenues by 6% but only trims profits by about 4%. If cable companies can use online video packages to help sell more profitable broadband subscriptions, analysts say, they might weather the shift to a streaming-TV future without too much pain. Some pay-TV companies, including Comcast and Cox, have already begun to move in this direction with “skinny” bundles of channels tied to a broadband plan, while Cablevision has signed on to package its broadband service with HBO Now.





13 April 2015

Net Neutrality Rules Published

The FCC officially published its Open Internet Order to the Federal Register today. With today's publishing to the Federal Register, the rules are set to go live on June 12 of this year.
Why This Matters: The trade group USTelecom immediately refiled its lawsuit against the FCC in the U.S. Court of Appeals claiming the agency overstepped its authority with its net neutrality rules. USTelecom believes the FCC used the wrong approach to implementing net neutrality standards and that by reclassifying broadband Internet access as a public utility, the commission reversed decades of established legal precedent.
5 Takes: B&C | Wireless Week | Fierce Telecom | L.A. Times | Bloomberg



Will Netflix Inc. Go After Live Sports Broadcast Rights?

By Daniel B. Kline April 11, 2015

Even while spending billions of dollars on content, Netflix (NASDAQ: NFLX http://my.fool.com/watchlist/add?ticker=NFLX&source=iwlsitbut0000010) has yet to enter one key area of programming.

The popular streaming service, which finished 2014 with 54.48 million paid members, has never paid for the right to televise live sporting events. In fact, Netflix has not only passed on bidding for football, basketball, hockey and other major sports, it carries no live events at all. Even Chelsea Handler's new talk show, scheduled to debut in 2016, won't be live or even necessarily taped on the same day it is released for streaming.

Netflix is not alone in eschewing going after sports rights. A new white paper from Juniper Research, "Digital Content -- An Over the Top Reaction," says no major over-the-top-service has ever bid for a major sporting event.

While several of the major OTTs (Over-The-Top) are moving into the field of delivering original content, one key battleground on which they have yet to marshal their forces is that of sporting video/audio rights," Juniper wrote. "For more than two decades this has increasingly been the preserve of premium (subscription and pay per view) broadcasters and cable networks, such as BSkyB in the UK, Canal+ in France, Sky in Germany, Mediaset Premium in Italy and ESPN in the U.S.

While this has always been the case, that does not mean it's going to be that way going forward.

Netflix has had success with original shows like Orange Is the New Black but has not bid on sports rights. Source: Netflix

Sports rights are expensive
Despite the rising costs of sports rights, Juniper believes OTT services will inevitably throw their hats into the ring.

"None of the major OTTs has participated in a bidding round for major sporting events. We believe that this state of affairs is unlikely to continue, particularly in markets where the OTTs have already seen substantial adoption through their film/TV offerings," the white paper says.

Streaming of live sports is still in its infancy. Juniper cited some successes including NBC's February 2014 digital stream of the Olympic men's ice hockey semifinal between the United States and Canada, which reached 2.1 million unique viewers.

Positive results like that will ultimately encourage OTT services to pursue the rights to sports events, according to Jupiter.

Given the immense cost of major sporting rights, we believe that the various OTTs will not enter the sports bidding wars until the established broadcasters show more willingness for sports viewers to watch streamed services regularly, whether via mobile, TV, desktop or connected TV. Furthermore, in many key markets the broadcasting rights are already locked down for several years, with renewals not due until the end of the decade.

So it might not happen soon, but in all likelihood the appeal of the various sports leagues and their loyal customers will be too hard for the streaming services to resist.

Netflix did not respond to a request for comment for this story but did tell me via email in February 2014 that the company had no immediate plans for live sports content.

"We don't carry any live content on Netflix, so we have not bid on any sports and do not plan to carry live programming right now," wrote spokeswoman Jenny McCabe.

Why sports rights?
While the price of sports packages has risen dramatically over the last few years, their value has increased as well. Rights to National Football League games especially can bring in huge audiences to justify their huge price tags.

NBC's Sunday Night Football was the third-highest-rated regularly televised program of the 2013-14 TV season, according to TV Guide, and ESPN's Monday Night Football was not far behind at No. 15.

The TV Guide ratings account for DVR viewing, If you remove that, Entertainment Weekly shows Sunday Night Football in the top ratings spot, with various other football-related programming holding down three other places in the top 10. The numbers get even better when considering single telecasts, Nielsen, which has not released its 2014 data, showed that in 2013 sports dominated the single telecast chart, with NFL-related shows holding nine of the top 10 viewership spots (the Oscars grabbed No. 7).

It's not just the NFL that can attract an audience. The recent NCAA men's college basketball championship game between Duke and Wisconsin pulled in 28.3 million viewers after a tournament that averaged over 11 million viewers per game, according to Nielsen. Even less-popular sports such as Major League Baseball can bring in big numbers, with the recent MLB opening night game on ESPN2 attracting 3.3 million viewers (the most since 2008).

The numbers vary, but the National Hockey League and National Basketball Association also have devoted audiences that watch mostly in real time. The same is true of niche sports such as golf and tennis, and even college football, basketball, and more.

Is it inevitable?
Creating original programming has helped build Netflix, and it's working to a lesser extent for other OTT services. The problem with creating episodic television, though, is that you have to make an expensive bet on a show before knowing if the audience will have any interest in it.

Netflix has done that extraordinarily well so far, but creating content that way has its risks. Sports -- if viewers show they will watch when games are streamed -- offer a much more certain path to a specific number of viewers. People find the NCAA tournament even when games air on the obscure truTV network. Hockey fans have managed to find NBC Sports Network to watch NHL games, and college football fans can sort through the various networks that hold rights deals to find their favorite teams.

Sports bring a defined audience that would almost surely follow its favorite leagues and teams wherever they go. Netflix might not be in that game right now, but it's hard to see why the company would not get in at some point.

Your cable company doesn't want you to know this
Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these three companies are positioned to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

Daniel Kline has no position in any stocks mentioned. He knows he should watch House of Cards but hasn't. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.



Quote of the Day 8 April 2015

“Comcast is a big voice; they have a tremendous voice across America, they’re a tremendous voice in Spanish and English, and they have a tremendous voice in Washington. They have over 130 lobbyists walking around Washington DC, watching every move that people make and making sure that they get the first and the middle and the last word anytime somebody wants to hear about what this merger is about. They’re doing and incredibly successful job on their part to control the narrative in Washington DC.”

– Congressman Tony Cardenas (D-Calif)



Netflix Responds to FCC Peering Info Request

Data Delivered in Context of Comcast-TWC Merger Review

By: John Eggerton 4/09/2015 11:30 AM Eastern

Streaming service Netflix this week responded to the Federal Communications Commission's request for data on interconnection, providng the agency with a raft of figures, almost all of them redacted as highly confidential.

The FCC's Dec. 19 request came in its review of the Comcast/Time Warner Cable merger, and at least the commission will see what Netflix says it costs to deliver its service, including paying for interconnection.

Netflix, which has asked the FCC to block the Comcast-TWC deal, talked of the six "large terminating" Internet service providers that have "demanded payment," and the ones who have gotten it -- Comcast, TWC, AT&T and Verizon.

In response to FCC questions, Netflix outlined its arguments that MVPDs are trying to undermine online video distributors by offering programming on unacceptable terms and attempting to keep the exclusive rights to some TV shows -- for example, the last five episodes of a linear TV show -- for their own VOD services.

Of Comcast, in particular, Netflix said, "[Its] behavior has indicated it understands exclusivity is important to OVDs, and so it has deliberately sought to undermine OVDs’ efforts to secure exclusivity."

The company also said that, as a general matter, the proposed merger would enhance Comcast’s incentive and ability to foreclose OVDs from accessing the programming on the terms they need to be competitive.

In response to that same charge leveled by a group of deal critics, Comcast said recently that it "has licensed substantial amounts of content to Apple in connection with the platforms for which Apple has approached NBCUniversal," adding, "And of course NBCUniversal provides substantial content to many other OVDs, and recently has licensed programming to Sony for its new linear Vue service."

"In short, there is nothing to this allegation," Comcast concluded.

Netflix reiterated its argument that Comcast was "unwilling to open sufficient capacity to satisfy the needs of its own customers," and added that congestion at interconnection points can turn a promised 25-Mbps service -- the FCC's new table stakes for ISPs -- into a 2-Mbps service.

"As a result, the consumer would not be receiving the benefit of the 25-Mbps broadband connection that she paid her ISP to provide," Netflix said.

Netflix argued that Comcast congested Netflix's routes in order to extract fees for interconnection, while Comcast said Netflix created the problem itself to make the political point in Washington and try to avoid payment.

Comcast executive VP David Cohen dismissed the charge last fall in a conversation with reporters.

"This was a business dispute," he said of the paid-peering fight. "This was part of a strategy by Netflix, and maybe by Netflix and Cogent, to create a problem in the backbone in order to make a broader point that had nothing to do with the consumer interest, which was that they wanted to make the point that it was better for them to have free interconnection."

A Netflix spokesman responded at the time: "It is not extortion to demand that Comcast provide its own customers the broadband speeds they've paid for so they can enjoy Netflix. It is extortion when Comcast fails to provide its own customers the broadband speed they've paid for unless Netflix also pays a ransom."

- See more at: http://www.multichannel.com/news/technology/netflix-responds-fcc-peering-info-request/389603#sthash.DNOBLxlg.dpuf



Quote of the Day 8 April 2015

"If current trends continue, already high video programming fees will continue to escalate, causing the margins from traditional pay-TV service for smaller cable operators to shrink and then dry up within five years. The FCC must use its power to restore some semblance of sanity to the out-of-control video content market or broadband investment will suffer."
– ACA President and CEO Matthew M. Polka



Pay-TV Providers Need To Embrace OTT Technology

by Aaron Baar, 7 April 2015

While many of the larger pay-TV providers (such as Comcast and Dish in the U.S.) are working on integrating over-the-top content into their services through new technologies and capabilities, those that haven’t begun the process are in danger of being left behind.

According to ABI Research, the pay-TV market is projected to see revenue growth of only 3.7% over the next five years, while over-the-top video will grow at about six times that rate (24%) by 2019. The increasing familiarity and simplicity of OTT services like Netflix and HBO Go mean the pay-TV providers must adopt strategies to integrate these services into their offerings, or risk falling into irrelevance.

“[Pay-TV providers] either need to integrate OTT services or offer similar [independent OTT] technologies,” Eric Abbruzzese, research analyst for ABI, tells Marketing Daily. “Many companies that have a name in the business are already doing that. Those that don’t are banking on the idea that their customers are going to remain loyal.”

Even those who have started developing these technologies — but haven’t come to market yet — are in danger of missing out. Though first-to-market products like SlingTV have run into hiccups, the potential in being a first-mover can yield higher average revenue per unit than coming in at a later time, Abbruzzese says. “We’re predicting the first to market — even with the growing pains — will see the most success,” Abbruzzese says.

The development of new technologies gives pay-TV providers access to new customers, while protecting the base they already have, Abbruzzese notes. To ensure both, he recommends developing technologies that both integrate with set-top boxes and providing independent OTT products.

“While pay TV will continue to hold market majority going forward, the best chance for positive growth in the pay TV space lies in the implementation of OTT capability in both stand-alone and IP-enabled STB capacities,” he says.



Analysts: Closure of AT&T's DirecTV buy 'imminent,' and 'oh so 2005'

April 6, 2015 | By Daniel Frankel

Nearly 10 months after it was originally proposed, AT&T's (NYSE: T) $49 billion purchase of DirecTV (NASDAQ: DTV) could be finally about to close. In a note to investors Monday, Morgan Stanley analyst Simon Flannery said the next few weeks will be "action packed" for the deal, and that its regulatory approval is "imminent.

Not content to forever hold his peace, however, media analyst Craig Moffett also chimed in and wondered if the deal would be better made a decade ago.

"There was a certain logic to it at the time," wrote Moffett, calling the deal "oh so 2005." Verizon (NYSE: VZ), he explained, "was building a 'future-proof' fiber-to-the-home network. By comparison, AT&T's U-verse was perceived to be a stopgap approach at best; investors understood even as early as 2005 that FTTN wouldn't deliver broadband speeds that would be competitive over the long-term."

Purchasing a satellite distribution platform like DirecTV would have at least allowed AT&T to free up 15 Mbps for broadband, taking video off its "underpowered network," Moffett noted.

"Oh," he added, "and satellite was still growing at the time.

"Don't get us wrong. DirecTV is a well-run asset, with a sterling brand and strong management, and the company's free cash flow will clearly help sustain AT&T's dividend. But it is hard to make the case for genuine strategic fit between the two companies."

Further, Moffett provides a bearish take on the satellite distribution business DirecTV lives in, noting its current stagnant subscriber growth in the U.S. is probably a permanent condition.

"Satellite's broadcast-only platform is increasingly anachronistic in an era of everything-on-demand," he wrote. Second, as cable broadband takes share from DSL, cable's vaunted triple play bundles are increasingly difficult for satellite to compete with, if for no other reason than cable's bundled discount makes the synthetic bundle of satellite TV-plus-cable broadband less price competitive. And third, the cable industry, led by Comcast's X1, has finally closed the gap on satellite's historically advantaged interface."

By 2019, Moffett projects satellite operators to lose around 537,000 subscribers as cable operators pick up around 140,000 new video customers--a reversal of the previous decade's subscriber trends.





How Netflix Is Creating the Ultra-High-Def Future of TV

Brian Barrett Business Wired Magazine 03.31.15

Netflix crystallized the idea of an internet service that streamed unlimited amounts of TV and movies into your home. It redefined television production with House of Cards, bringing a bona fide original series straight to the net. And with documentaries like The Battered Bastards of Baseball, it took the idea of original programming to new heights. But the company isn’t finished.

So many companies are now pushing into the world of internet television, from Amazon to HBO to CBS. But in the foreseeable future, no single outfit will do more to improve your television experience than Netflix. Yes, it will continue to offer new and original series, but more than that, it will change the technology we use to watch shows and movies, pushing things like ultra-high resolution video and a new breed of television that’s better suited to online streaming.

The 4K Front

Netflix was the first company to roll out 4K video, an ultra-high-definition image that offers several times the detail of standard HD images. It began offering 4K versions of shows like House of Cards and Breaking Bad nearly a year ago.

Most people don’t have the 4K TVs needed to watch these ultra-high-definition shows. But Netflix sees where the world is moving, and unlike others, it’s in a position to accelerate the process. Netflix was the first to roll out 4K, says Avi Greengart, a research director with marker research firm called Current Analysis, because many others didn’t have the option. “It could, and its competitors can’t,” Greengart says. “4K requires more bandwidth than many cable and satellite systems have available.” Netflix Open Connect Initiative, an effort to deliver its shows and movies from machines as close as possible to the viewer. It’s a complicated program, but the bottom line is that Open Connect is a way for Netflix to deliver video without clogging up internet pipes—and without being so dependent on big internet service providers like Comcast, Verizon, and AT&T.

The end result is still that Netflix has given the next-generation standard a jumpstart that might otherwise have taken years. “[It] helps solve the chicken-and-egg problem that comes with all new TV technologies,” says Netflix spokesperson Cliff Edwards. “We’re creating a catalog of content people can watch from the very early days of a technology.” If you think that’s not important, the 3DTV industry might disagree.

Is it working? In December, about eight months after Netflix debuted 4K on its service, Amazon followed suit.

Beyond Ultra-High-Definition

But this is merely a first step. Netflix is also pushing what’s called high-dynamic range (HDR) content, which could improve the fidelity of TV shows even more.

HDR sounds like just another buzzword, but like 4K, it can significantly improve your TV viewing experience. Think of it as contrast ratio on steroids. Whites are whiter. Blacks are blacker. And together, they create an image that feels less like the washed out approximation we’re used to and more like being there. Greengart calls the technology the “clean winner” when compared to 4K, in terms of noticeable benefit to the consumer.



Wireless Providers Make OTT Strategy Key to Future Profitability

According to a new report from Wells Fargo, despite ongoing concerns about the amount of bandwidth that over-the-top video is taking up on wireless networks, the popularity of the medium means that carriers, including AT&T, T-Mobile and Verizon, are making wireless OTT a "key pillar" of their future plans.
Why This Matters: While each carrier is taking a slightly different approach, the question is how carriers will capitalize on mobile video, which currently takes up 55% of all mobile traffic and may grow to 72% of traffic by 2019.
The Take: Fierce Online Video



MVPDs Are a Study in Consolidation

By Dave Seyler on Mar, 28 2015 http://rbr.com/wp-content/uploads/cabletv.jpgThere are a relatively small number of companies that provide the vast bulk of MVPD service to American homes. According to a study from Leichtman Research Group, only 13 companies control 95% of the total number of subscribers.

Look a little bit closer, as RBR+TVBR did, and the chart shows that just four companies control two thirds of the market.

Two of the big four are trying to merge, and one of the two remaining is also seeking a merger with another of the big players.

The Comcast/TWC merger would combine the top two cable companies, and would combine the #1 and #4 companies in the MVPD space.

The DirecTV/AT&T merger would bring the satellite company together with one of the two big telco providers, putting it just behind Comcast/TWC in terms of subscribers.

The Leichtman study showed that cord-cutting is taking a toll in the space, but its affect is limited. The sum and total of lost subscriptions amounted to only 0.2% in 2014.

Lack of growth is certainly a concern, but loss of the overall subscriber base is less of one, at least for the time being.

Motley Fool looked at the pending mergers. It noted that if the two are approved, the next company likely to be teed up would be Dish Network. It believes it would be an attractive partner for one of the remaining cable companies, such as Charter or Cox, or perhaps Cablevision.

RBR+TVBR observation: Again, we wonder how any sentient being in Congress or at the FCC can look at a local retransmission consent negotiation between one of the huge companies almost invariably representing the MVPD side and think that what is two broadcast stations negotiating together somehow have the upper hand.

Unlike MVPDs, broadcast ownership is limited. There are a few big television groups, but they can only extend so far. There are myriad other television licensees operating in markets large and small.

Unlike MVPDs, the amount of program streams a broadcaster has in a local market is also limited – it is only in the last few years that broadcasters have had more than one program stream at their command, versus hundreds available to MVPDs.

The fact that broadcasters have been able to continue to excel in the provision of local content, including the incredibly important news, information, public affairs and emergency content is a testimony to the power of local broadcasting. MVPDs, despite their size, certainly haven’t been able to match this service.

Let’s add this into the mix: Unlike MVPDs, broadcasters have and honor public service obligations. Compare this with the long MVPD tradition of living at the very bottom of the corporate list when it comes to providing public service – year in and year out its ratings are among the very worst.

It is also a testament to the value of national broadcast networks that they are able to create much sought after news, sports and entertainment programming despite the massive number of cable channels they compete with.

All of this has made local broadcast of very high value to MVPDs.

And sure, we understand why they’d like to get it at a low cost.

That doesn’t mean they should get it at a reduced rate – they should pay fair value, and the best way to arrive at that figure is via an open negotiation.

And if two local broadcasters operate together via a legal business agreement, we see no reason why they should not be able extend this relationship to MVPD dealings. Really – it’s still two stations with perhaps between two and six program streams against the multiple offerings of the MVPD.

The MVPD has the option to drop the stations. Its subscribers might not like it, though. They may drop the MVPD and switch to one that does carry the local station, as difficult as MVPDs make that to do.

The MVPD should not have the option of crying to Congress or the FCC and have any reasonable expectation of sympathy.

How some legislators and FCC officials are able to believe that MVPDs are somehow being bullied is simply beyond imagination.


Read more at http://rbr.com/mvpds-are-a-study-in-consolidation/#pLkHkFtAp23cRjzI.99



Quote of the Day: 30 March 2015

“We can have an open Internet policy that advances the interests of tens of thousands of innovators and millions of Internet users, or we can have an open Internet policy that advances the interests of a few powerful companies. The choice is clear. And I’m proud that the commission has made the right choice, adopting strong, sustainable and sensible open Internet protections.”
– FCC Chairman Tom Wheeler



FCC Hit With Lawsuits Over New Net Neutrality Rules

USTelecom, a trade association representing several major telcos and broadband providers, filed suit against the FCC in a Washington court yesterday to overturn the commission’s new net neutrality rules, while Texas-based ISP Alamo Broadband filed its own suit in New Orleans.
Why This Matters: This is just the beginning. The court filings kick off a legal effort to overturn the FCC's regulations, passed in February, which aim to keep Internet providers from speeding up, slowing down or blocking Web traffic.
5 Takes: The Verge | The Washington Post | MCN | Deadline | Home Media



HBO, Sony, Showtime Want Internet Fast Lanes to Reach Consumers with OTT Video

HBO, Sony and Showtime are in discussions with ISPs to avoid congestion and data caps for their online OTT streaming services, essentially creating an internet “fast lane” in order to circumvent the more congested public Internet.
Why This Matters: Such special treatment could be prevented by the FCC under its new net neutrality rules, which prevent prioritization in exchange for payment. The FCC did not issue a specific rule banning data caps or exemptions to data caps, but claims the authority to intervene if data caps are used in a way that harms competitors.
5 Takes: Ars Technica | The Verge | Deadline | CED | Home Media The Switch



Republicans can’t overturn the FCC’s new net neutrality rules without this Democrat. And he’s not playing along.

Washington Post 20 March 2015

It's no secret that Republicans want to replace the Federal Communications Commission's new net neutrality regulations with legislation. But they need Democrats to do it — and at least one prominent liberal is signaling that he won't go along with the plan unless the GOP substantially changes the deal on the table.

Sen. Bill Nelson (Fla.) is the top Democrat on the Senate Commerce Committee. On Wednesday, he reiterated what he's been saying for weeks: That he's open to working with Republicans on a "truly bipartisan" bill aimed at preventing Internet providers from speeding up, slowing down or blocking Web sites. But he'll only cooperate, he said, "provided such action fully protects consumers, does not undercut the FCC's role and leaves the agency with flexible, forward-looking authority to respond to the changes in this dynamic broadband marketplace."

It's a subtle critique of a bill proposed by Sen. John Thune (R-S.D.), the chairman of the Senate Commerce Committee, and Rep. Fred Upton (R-Mich.), the head of the House Energy and Commerce Committee. That legislation would enshrine many of the FCC's regulations into new law. But there's a catch: It would also strip the FCC of some of its powers. And for Democrats like Nelson, that's a non-starter.

"Nelson's comments draw the battle lines," said Paul Gallant, a telecom analyst at Guggenheim Securities. "He's definitely open to moving a bill, but he wants to keep some type of safety-net power for the FCC over ISPs. Republicans don't like open-ended authority for agencies. So, game on."

The Thune-Upton bill would prohibit the FCC from regulating Internet providers using the same tool it uses to police legacy phone service — Title II of the Communications Act. Consumer advocates, Web companies and President Obama all pushed hard for Title II last year, while Internet providers warned it would hurt their ability to offer faster, better service.

The Republican-backed proposal would also limit the FCC's authority to police Internet providers under another part of the law known as Section 706. The FCC has used 706 to knock down state limits on city-run Internet services, and some lobbyists want the agency to flex that muscle even more.



Live from Chicago: The New Digital Media Economy INTX Reflects New Reality Of Connectivity, Interactivity

3/16/2015 3:00 PM Author: Alfred Liggins & Jerry Kent

Like you, we’re privileged to live and work in an amazing era. Today, the tap of a button brings stories to life over objects we hold in our hands. We interact with friends in distant places as if they were right next door. A gesture into thin air and, like that, images and sounds appear in stunning resolution in our living rooms.

These amazing feats spring from an almost incomprehensible collaboration of people, ideas, energy and invention. They draw from the widest of possible worlds, borrowing from a technology here, a breakthrough there, blending the known with the new to create and extend the realm of the possible.

It’s this interplay of invention and creativity that will be showcased live at the inaugural edition of The Internet & Television Expo (INTX), May 5-7 at Chicago’s McCormick Place West.

What used to be known as The Cable Show is being transformed into something entirely new: a live event where companies and individuals across every conceivable media and communications domain come together. A highly entertaining animated video you can watch here tells the story nicely.

At INTX, you’ll find collaborators and competitors, friends and frenemies, united by a common vision in the promise and power of a networked digital economy. From Internet media to wireless broadband, every category that matters to this emerging world is represented at INTX.

This wide-open, anything’s-game philosophy is reflected in the list of media industry and public policy leaders you’ll hear from at INTX, including Comcast’s Brian Roberts, FCC chairman Tom Wheeler, Vimeo’s Kerry Trainor, Nancy Dubuc of A+E Networks, Michael Kassan of MediaLink and many more.

The same philosophy also is behind some of the unique experiences that will be served up at INTX, including live General Session content produced by journalists Peter Kafka and Kara Swisher from Re/code; the INTXHACK live app development competition; and special INTX Intersections – dedicated pavilions that provide deep-dive immersion into subjects like the Internet of Things, TV content navigation, TV Everywhere and more.

Our world has changed. We’ve transcended old boundaries and entered promising new domains. The Internet & Television Expo reflects this reality. Connectivity, interactivity and a multi-dimensional media product suite are the ingredients that now unite a vast ecosystem made richer by its many participants.

As co-chairs of INTX 2015, we’re extremely enthused about the possibilities to express this wide, wide world in a unique live event setting. It’s an exciting time. It deserves an exciting show.

By Alfred Liggins, chairman and CEO, TV One and CEO and president, Radio One; and Jerry Kent, chairman and CEO of Suddenlink Communications, co-chairs of INTX 2015

- See more at: http://www.multichannel.com/blog/mcn-guest-blog/live-chicago-new-digital-media-economy/388882#sthash.zdH40UpZ.dpuf



How Many People Want to Pay for ESPN? The Web Will Tell Us.

By Peter Kafka @pkafka March 18, 2015, 12:25 PM PDT

Do you want your pay TV with sports or without sports?

For years, that question has been more or less academic: If you paid for cable TV (or satellite TV, or telco TV), you got sports, and you paid a lot for it, because Disney’s ESPN and its related channels are the most expensive part of your monthly bill.

Now, for the first time, you’re going to have a real choice. You can thank Dish Network and Sony for that: Dish Network’s Sling TV service provides a package of TV channels, delivered over the Web, that includes ESPN. And Sony’s Vue service, which launches today in a handful of U.S. cities, offers a bunch of TV channels, but doesn’t include ESPN.

Both services are still serving some non-ESPN sports to their subscribers: Sling TV, which costs $20 a month, includes channels from Turner, which means viewers will have access to some college basketball, pro basketball and pro baseball games. And Sony’s service, which starts at $50 a month, includes Turner as well as CBS, Fox and NBC broadcasts, which means you’ll get access to lots of pro football games, as well as whatever Fox Sports has. (UPDATE: Vue viewers may not get the NFL either — I asked the league if their games would be available on the service this fall and they wouldn’t confirm that, which I’m interpreting to mean that Sony doesn’t have NFL rights, at least for right now.)

But ESPN is the most dominant sports programmer in the country, by a long shot: The network has many of the most high-profile sports leagues and events locked up exclusively for many years to come.

ESPN has been able to pay for that stuff with the high subscription fees it commands from TV distributors, which it is able to get because distributors believe their customers must have ESPN and its exclusive sports deals. (Apple agrees, too: Sources say it would like to include ESPN in the bundle of TV networks it wants to offer in its service.) Whether that’s a virtuous cycle or vicious cycle depends on which side of the negotiating table you’re sitting on, but it has been in place for some time.

So now we get a real-world test: Do people really care enough about sports, and ESPN specifically, to pay for it? Or are they happy to pay for lots of other stuff but not ESPN? We won’t see the results for a while, but when we get them they could have important meaning for lots of people in the TV business.



Industry Trade Organizations to Spearhead Legal Challenges to Title II

Trade associations representing large U.S. Internet service providers are expected to take the lead in suing the Federal Communications Commission over its new web traffic regulations.
Why This Matters: Such an approach would allow companies to streamline their litigation efforts and could help firms avoid drawing any fire individually, as Verizon did after it challenged the previous version of net neutrality rules on its own in 2010.
3 Takes: Reuters | CED | Fierce Wireless



12 March 2015

FCC Publishes Open Internet Order

The FCC released its long-awaited 400-page Open Internet Order today, which reclassifies broadband as a Title II service under the Communications Act and spells out the new Net Neutrality rules.
Why This Matters: The FCC reiterated that it intends to forbear on all provisions that deal with rate regulation. Opponents claim that the maneuver will stifle innovation and investment. The issue is almost certainly headed back to the courts.
5 Takes: THR | MCN | USA Today | NYT | NPR



TDG: More Than 20% of U.S. OTT Streamers are “Cord Cheaters”

According to new research from The Diffusion Group (TDG), more than 20% of adult broadband users who stream video from an online subscription service are “cord cheaters” – consumers who access these services using the account name and password of someone that does not reside in the same household.
Why This Matters: The problem is particularly acute for Dish Network's new OTT service, Sling TV, with 25.5% of users not paying a dime, followed by Hulu Plus (21.2%), Netflix (19.9%) and HBO Go (18%). Amazon Prime has the lowest benchmark of the major services, with TDG reporting its cord-cheating rate at 9.9%.
5 Takes: Fierce Cable | Rapid TV News | Broadband TV News | Advanced Television | IPTV News



Charter in Talks to Buy Bright House Networks

Charter Communications is reportedly in talks to acquire mid-sized cable operator Bright House Networks in an all-stock deal worth as much as $12 billion that would bring an additional 2.5 million customers in Florida, Alabama, Michigan, Indiana and California into the Charter fold.
Why This Matters: According to reports, the companies aren’t likely to announce any deal before regulators are able to rule on Comcast’s acquisition of Time Warner Cable. But Charter shares soared 6.5% on the possibility of a deal.
4 Takes: Bloomberg | MCN | Re/code | Fierce Cable



Are Campaign Donations Behind Republican Opposition to Net Neutrality?

By Lauren Walker 3/11/15 at 12:22 PM

Last week, Rep. Marsha Blackburn (R-Tenn.) introduced the “Internet Freedom Act”—legislation that would nullify the Federal Communications Commission’s (FCC) new network neutrality rules. This counter-legislation came as no surprise, as Republicans had warned of “ongoing efforts” to oppose the FCC’s move. But what has many concerned are recent revelations that Blackburn and all but two of the bill’s 31 co-sponsors received thousands of dollars from telecoms in the last election cycle.

Late last month, the FCC voted to use its power under Title II of the 1934 Communications Act to reclassify broadband Internet as a telecommunications service. The new classification allows the commission to put in place regulations mandating that Internet service providers (ISPs) like Comcast, Verizon and AT&T, transmit all Web traffic at the same speed, regardless of commercial interests. This idea of “open Internet,” commonly known as net neutrality, ensures that as long as the content requested is lawful, it will all be delivered at the same speed.

“The Internet is simply too important to allow broadband providers to be the ones making the rules,” FCC Chairman Tom Wheeler said prior to the vote. “This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech. They both stand for the same concept: openness, expression and an absence of gatekeepers telling people what they can do, where they can go and what they can think.”

But net neutrality opponents argue that these regulations will hurt competition, make networks less profitable and discourage investment. The proposed “Internet Freedom Act” reads:

“The rule...shall have no force or effect, and the Commission may not reissue such rule in substantially the same form...”

Blackburn added in a press release, “My legislation will put the brakes on this FCC overreach and protect our innovators from these job-killing regulations.”

But there may be another reason Blackburn opposes net neutrality—she received at least $80,000 from telecommunications companies last election cycle. According to the Center for Responsible Politics, Blackburn received $25,000 from AT&T, $20,000 from Comcast, $20,000 from the National Cable and Telecommunications Association and $15,000 from Verizon.

And she is not alone. Twenty-nine of the legislation’s co-sponsors received more than $800,000 from Verizon, Comcast, Time Warner Cable and the National Cable and Telecommunications Association, the Daily Beast reports.

Tim Karr, the senior director of strategy at Free Press—a nonprofit advocating for Internet consumer rights—said to the Daily Beast that these election donations, nearing a million dollars, pale in comparison to the amount of money ISPs would gain and the amount they would donate to future campaigns if net neutrality was killed.



TV ratings see double-digit declines for fifth straight month

By Claire AtkinsonTop of Form 1

Bottom of Form 1

March 13, 2015

February was another heartbreaker for the $65 billion television ad business.

Commercial ratings — the viewing “currency” that determines what advertisers pay for TV time — cratered across broadcast and cable networks, marking the fifth straight month of double-digit declines for the industry.

“It’s clear the downward spiral in TV ratings continues with no end in sight,” media analyst Michael Nathanson wrote in a research note on Friday.

Overall prime-time broadcast network ratings were off 12 percent last month compared to a year ago, while cable networks dropped 11 percent, according to his report.

Nathanson looked at so-called C3 ratings, which come in later than traditional ratings. They measure average commercial viewership in shows up to three days after the original air date via DVR playback.

While a couple of networks that carried the Super Bowl and the Olympics last year clearly suffered because of tougher comparisons, almost every channel was hurting.

Looking at total-day C3 ratings, only three networks boosted their audience: HGTV, Discovery and TBS, while TNT, History and Nickelodeon fell the most.

Typically, TV ad sales executives can increase prices to compensate for a ratings decline, citing scarcity. But Nathanson said seismic changes are pressuring networks to hold the line on pricing.

Although some of the ratings declines can be blamed on changes to Nielsen’s measuring methods, among other changes, “we believe these terrible ratings trends are also indicative of changing viewership habits,” he wrote.

The numbers underscore the rapid changes in how TV viewers are consuming content.

Americans are increasingly watching TV shows on Netflix, Hulu, Amazon streaming and other services. Some 40 percent of households now have subscription video service, Nielsen reported earlier this week.

Those same services are flexing their muscle and competing for content. Yahoo, Amazon and Hulu are among the bidders for the streaming rights to “Seinfeld” episodes, WSJ.com reported Friday.



Cablevision First Cable Op to Sign With HBO Now Streaming Service

Will Be Available to Optimum Online Customers 3/16/2015 3:30 PM Eastern

By: Mike Farrell

Cablevision Systems is the first cable operator to sign up for Home Box Office’s new standalone streaming service – HBO Now.

All the particulars of the deal weren’t revealed – including pricing and when exactly it will debut. Cablevision said the service will be available to its Optimum Online customers in the New York metro area.

HBO unveiled HBO Now earlier this month exclusively with Apple TV for $14.99 per month. Apple reportedly has a three-month exclusive digital window for the product, which will make its debut in April, coinciding with the fifth season of popular HBO original series Game of Thrones.

“As New York’s premier connectivity company, we are enabling Optimum Online customers to enjoy content in any way they choose to receive it. We are well-positioned to support HBO Now and, as technology advances, Cablevision will continue to meet the evolving needs of our customers,” Cablevision chief operating officer Kristin Dolan said in a statement.

Other cable operators have reportedly been in discussions with HBO about the product, including Cox Communications. Cablevision is apparently the first of several MSOs that will eventually offer the product. HB has said repeatedly that it plans to work closely with its distribution partners in offering the product, whcih it claims is targeted initially at the estimated 10 million broadband-only homes across the country.

“We couldn’t be more excited that our longtime partner has joined us for the launch of HBO Now," said HBO president, global distribution Tom Woodbury in a statement. "We believe that HBO Now will have great appeal to Cablevision's broadband customers.”

- See more at: http://www.multichannel.com/news/technology/cablevision-first-cable-op-sign-hbo-now/388884#sthash.pAu4McrJ.dpuf



17 March 2015

FCC Stops the Clock on Merger Reviews

The Federal Communications Commission has stopped the informal shot clocks on the Comcast-Time Warner Cable and AT&T-DirecTV mergers to give a federal appeals court time to rule on a challenge to protective orders related to those deal reviews.
Why This Matters: The delay will give the court time rule on the right to review highly confidential video programming agreements – the deals for retransmission consent with CBS, Disney and others.
5 Takes: MCN | THR | Variety | L.A. Times | Rapid TV News



TV Stations With No Signal - What happens to local news?

HERE, AFTER—Can a TV station exist as a local news operation without a signal?
Deborah D. McAdams 03.13.2015 04:34 AM


I’ve been casting this question lately and haven’t had a lot of bites. It likely is out of the question in terms of current business models, so why spend the cognitive energy? Another, somewhat larger factor I sense among TV station personnel is that they are focused on what’s in front of them.

Media staffs in general have been so stripped of any perceived redundancy, there is nothing left to scrape but bone. They haven’t the time or energy to keep track of the hijinks at the Federal Communications Commission. Who can go to work day after day and invest their personal best into an operation that may go on the auction block and disappear? We all toil under such auspices to some degree, but it’s easier to ignore a specter that’s not in our face every day.

Yet the specter—in this case, the spectrum auction— is coming, whether next year, the year after, the one after that or maybe all three. Wireless providers will get as much TV spectrum as they want. The upcoming incentive auction is their second dip in the well since 2008, when they took 108 MHz in the 700 MHz band. Those frequencies are still being developed—something conveniently omitted from all the spectrum “crunch” caterwauling during the Julius Genachowski FCC. You don’t hear it so much anymore because A) the propaganda achieved the intended goal of securing Congressional authorization for the incentive auction, B) sometimes, even journalists will question something after repeating it over and over again for a few years, and C) it was horse leavings.

The spectrum-transfer campaign has now morphed into a numbers game where the potential value of a TV station license on auction approaches $1 billion. It already may exceed that. I haven’t looked at the latest estimates because virtually all that I’ve seen so far are arbitrary and backed entirely by agenda-fueled rhetoric. I.e., more horse leavings with a specific intention—bringing broadcast licensees to the table.

One cannot argue with a successful strategy.

Interest in the auction has exploded compared to two years ago. The $45 billion AWS-3 auction at the end of 2014 didn’t hurt: Incentive auction estimates have gone nuts. Whether or not they’re realistic no longer matters. The consensus among broadcast executives with whom I’ve spoken is that “you’d be a fool not to look at the numbers.”

Owners seriously considering a sale will dig past the hyperbolic figures. They’ll look closely at each of their markets and assess competition, availability of media services, recent spectrum acquisition valuations specific to those markets (versus the Brobdingnagian totals proposed by auction promoters), station revenue, market position and local economics. TV stations seem to be holding their own in the local ad market, but who knows for how long, and who wants to hold their own when they can retire in the sun with a humidor of Cohibas?

Let’s count the hands.

While one can make a decent argument that local television news provides a contributive community service, it’s also a business. Businesses have to make money. As much as the Consumer Electronics Association and the user community in general spit nails at paying for content, creators of content comprise mostly soft-bodied animals who require shelter from the elements and regular meals.

For 50 years, we’ve had the uncomplicated triad of journalists, advertisers and broadcasters (or publishers). Our increasingly rapid plunge into the Digital Age is dismantling that arrangement and leaving the components scattered with no clear path to a new structure. Detractors say “citizen” journalism fills the gap, but anyone monitoring Facebook’s meme cavalcade knows there is a greater need than ever before for fact-checking, confirmation and analysis. Snopes cannot go it alone.

The thing we’ve come to know as “news”—the local, regional and global information that may effect our daily lives—was for decades the province of a balance of personalities: Fervid, intellectually curious reporters; dispassionate exacting editors; referees, artists, sales people, accountants and managers. Those were the salad days. These are not. Now we have “one-man bands” and “blog sites.”

Truly, we get what we pay for, and with that in mind, I return to my original query: Can a TV station exist as a local news operation without a signal? Will Verizon and AT&T support market-based news? Will cable and satellite TV service providers pay a fee for it? Can local programming of any sort thrive without national network partnership?

There were 1,782 full-power TV stations in the United States as of last June. Of those, 719 provided local news with fewer people, according to the Radio Television Digital News Association.

As much as traditional journalism has suffered the digital transition and been hijacked in general—think Anonymous, where no one wears a byline—the baby may be sleeping in the proverbial bath water.

Local TV news can be a lifeline, and not just during disasters. A heat wave isn’t exactly a disaster, but it can be if you’re 80 and your air-conditioning goes out and no one knows you’re suffocating. We always hear about the big ones, where people are warned in time to dodge a tornado, or how transmitter engineers in New Orleans risked life and limb to keep a signal on the air.

You don’t hear so much about the heat shelter announcements, food donation coordination, crazy person on the loose bulletins and the myriad other daily pieces of information that keep us safe, informed and prepared when necessary. We’ve had this type of information handed to us for so long that perhaps we’ve forgotten what our lives might be like without it.

We may soon find out.
- See more at: http://www.tvtechnology.com/article/mcadams-on-tv-stations-with-no-signal/274969#sthash.36G0wgGR.dpuf



Cord-cutters approach 7% of US TV population

Details Michelle Clancy | 13 March 2015

While consumers watch more than 30 hours of video per week on average, the number of households planning to cancel their pay-TV service (potential cord-cutters) has also increased, reaching 7% of US broadband households with a pay-TV service.

That's the word from a Parks Associates report, Under Attack: Assessing New Threats to Pay TV, which notes that the new deal between Apple and HBO to stream the HBO Now streaming service to Apple devices is just the latest example of reasons why consumers will continue to cut the cord.

"The pay-TV industry is experiencing a slow crisis in terms of paying customers," said Brett Sappington, director of research at Parks Associates. "Content is key to attracting and retaining consumers, and consumers are now looking beyond pay-TV for that content."

He added: "At the same time, companies like Google and Amazon are getting into the content creation business, providing a new competitive threat to the traditional ecosystem. "

For consumers, the lines are blurring between CE makers, operators and content providers, so they will make their decisions, first and foremost, based on who has the desired content and secondly on who provides the easiest method to find and consume that content.

"Consumers have extensive content choices, including live TV, VOD, and OTT streaming, and they are using multiple interfaces to access desired content," said Barbara Kraus, director of research at Parks Associates.


Read more: Cord-cutters approach 7% of US TV population | OTT | News | Rapid TV News http://www.rapidtvnews.com/2015031337562/cord-cutters-approach-7-of-us-tv-population.html#ixzz3UXZPV7JV





Moffett: 18M U.S. Homes Without PayTV

Analyst Says That Number Will Grow

3/12/2015 2:00 PM Eastern By: Mike Farrell

MoffettNathanson principal and senior analyst Craig Moffett estimates that about 18 million homes in the United States either have never had pay TV service or have cut the cord, with as many as 3.1 million of those homes added in the last four years. And according to MoffettNathanson’s recent report: The Poverty Problem: Six Years On, the number of homes that will do without a pay TV subscription could grow at an even faster rate in the future.

Moffett has tackled the issue of declining incomes and their impact on the pay TV universe before in his detailed 2008 report, The Poverty Problem, where the analyst warned that a sharp decline in discretionary income – money available to homes after payouts for food, shelter, healthcare and transportation – would lead poorer homes to disconnect their pay TV subscriptions. In revisiting the report six years later, Moffett wrote that he was proven both right and wrong – pay TV growth has been flat since 2009 while broadband penetration rates have climbed even as prices have risen. At the same time, discretionary income has fallen in the past six years to about -$583 per month from $0 for the poorest homes, while pay TV subscriptions have remained relatively steady.

But Moffett warned that a recent uptick in new household formation, coupled with an aging Baby Boomer population and an emerging Millennial demographic that has been raised on online, over-the-top and subscription video on demand services, could bode even worse for pay TV.

“When one offsets the growth in new household formation against observed changes in Pay TV penetration, it suggests that there either was a sharp acceleration in cord cutting in recent month or, perhaps more likely, that the uptake of Pay TV among these new households was extraordinarily low,” Moffett wrote. “Whatever the explanation, there are now as many as 18 million households today who are non-subscribers, either because they have cut the cord or never had it in the first place, 3.1 million of which were added since the end of 2011.”

Moffett points to research that could potentially make the future look even bleaker for pay TV.

According to a 2012 report prepared for the Bipartisan Policy Center, about 12 million new households were expected to be added between 2010 and 2020. But Moffett notes that while that may sound like good news for pay TV – more homes means more subscribers – it masks some dramatic changes in what makes up those households. According to Moffett, that period will include a net loss of 11 million baby boomer-led homes (typically strong subscribers to pay TV) and a net gain of 23 million echo-boomer and millennial-led households (who are less likely to subscribe to pay TV).

“If subscribership in these cohorts remains low, it could portend much steeper attrition rates for Pay TV over the next decade than we, or others, currently forecast,” Moffett wrote.

Just what that impact will be will depend on the availability of alternatives, Moffett added. Newer lower cost products like Dish Network’s Sling TV (which attracted about 100,000 people to its introductory offer in its first month) and others “could accelerate the transition to OTT significantly,” Moffett wrote. “Not because the products are so compelling to younger generation new households, but instead because the pressures on disposable income are so great for lower income cohorts of all age brackets.”

- See more at: http://www.multichannel.com/news/news-articles/moffett-18m-us-homes-without-paytv/388807#sthash.hn6W6CQt.dpuf



Netflix Outspends BBC, HBO and Discovery on Content

Ben Keen, chief analyst and VP, consumer media, IHS, told Cable Congress attendees in Brussels yesterday that Netflix now outspends the BBC on content overall, and spends more than HBO and Discovery, with only Sky spending more, driven by its massive investment in sports rights.
Why This Matters: According to Keen, Netflix’s subscriber growth is closely following that investment in content. He said about 20% of Netflix’s content spend is on original content with the balance spent on acquisitions. He also reported that bundled and standalone OTT video subscriptions are expected to grow massively over the next five years as traditional cable TV subscriptions continue to decline.
4 Takes: TBI Vision | Broadband TV News | Advanced Television | DTVE



Are Campaign Donations Behind Republican Opposition to Net Neutrality?

By Lauren Walker 3/11/15 at 12:22 PM Newsweek

http://www.newsweek.com/are-campaign-donations-behind-republican-opposition-net-neutrality-312975

Last week, Rep. Marsha Blackburn (R-Tenn.) introduced the “Internet Freedom Act”—legislation that would nullify the Federal Communications Commission’s (FCC) new network neutrality rules. This counter-legislation came as no surprise, as Republicans had warned of “ongoing efforts” to oppose the FCC’s move. But what has many concerned are recent revelations that Blackburn and all but two of the bill’s 31 co-sponsors received thousands of dollars from telecoms in the last election cycle.

Late last month, the FCC voted to use its power under Title II of the 1934 Communications Act to reclassify broadband Internet as a telecommunications service. The new classification allows the commission to put in place regulations mandating that Internet service providers (ISPs) like Comcast, Verizon and AT&T, transmit all Web traffic at the same speed, regardless of commercial interests. This idea of “open Internet,” commonly known as net neutrality, ensures that as long as the content requested is lawful, it will all be delivered at the same speed.

“The Internet is simply too important to allow broadband providers to be the ones making the rules,” FCC Chairman Tom Wheeler said prior to the vote. “This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech. They both stand for the same concept: openness, expression and an absence of gatekeepers telling people what they can do, where they can go and what they can think.”

But net neutrality opponents argue that these regulations will hurt competition, make networks less profitable and discourage investment. The proposed “Internet Freedom Act” reads:

“The rule...shall have no force or effect, and the Commission may not reissue such rule in substantially the same form...”

Blackburn added in a press release, “My legislation will put the brakes on this FCC overreach and protect our innovators from these job-killing regulations.”

But there may be another reason Blackburn opposes net neutrality—she received at least $80,000 from telecommunications companies last election cycle. According to the Center for Responsible Politics, Blackburn received $25,000 from AT&T, $20,000 from Comcast, $20,000 from the National Cable and Telecommunications Association and $15,000 from Verizon.

And she is not alone. Twenty-nine of the legislation’s co-sponsors received more than $800,000 from Verizon, Comcast, Time Warner Cable and the National Cable and Telecommunications Association, the Daily Beast reports.

Tim Karr, the senior director of strategy at Free Press—a nonprofit advocating for Internet consumer rights—said to the Daily Beast that these election donations, nearing a million dollars, pale in comparison to the amount of money ISPs would gain and the amount they would donate to future campaigns if net neutrality was killed.



Google Fiber Ended 2014 With 29,867 TV Subs:

Report Video Market Impact Small But Growing

by Jeff Baumgartner 3/12/2015 2:00 PM Eastern; Multichannel News

Google Fiber is stirring fear among incumbent telcos and cable operators, but the provider has yet to make a big dent, at least with respect to video, in the early going, according to new subscriber data uncovered by MoffetNathanson.

Citing figures released today by the U.S. Copyright Office, which tracks video subs due to compulsory license fee requirements, the firm’s report found that Google ended 2014 with 29,867 video subs – 194 in Stanford Iwhere it's conducting a trial); 7,026 in Kansas City, Kan.; 20,140 in Kansas City, Mo.; and 2,507 in Provo, Utah (Google Fiber entered Provo in 2013, when it acquired the assets of iProvo).

MoffettNathanson’s figures also show that Google’s video service penetration in Stanford is 5% (based on 3,913 homes passed); 13%/53,925 in Kansas City, Kan.; 10.5%/192,406 in Kansas City, Mo.; and 8%/31,524 in Provo.

In a research note about the findings, MoffettNathanson analyst Craig Moffett said those numbers are “testament to how hard, and how slow, it is to build scale as an overbuilder,” noting that Google Fiber's current crop of video customers represents just 0.026% of the U.S. cable market.

“To Cable & Satellite investors, Google Fiber is a bit like ebola: very scary and something to be taken seriously... but the numbers are very small, it gets more press attention than it deserves, and it ultimately doesn't pose much of a risk (here in the U.S. at least),” Moffett wrote.

He also points out that Google Fiber has lamented the high costs of programming, adding that it recently had to raise the price on its TV/1-Gig bundle for new subs in Kansas City. Speaking at the COMPTEL conference last October, Google VP of access services Milo Medin called video “the single biggest impediment” to deployment, labeling it “the biggest piece of our cost structure.”

But Moffett also points out that Google Fiber’s video sub total in Kansas City has more than doubled in the past year and is still accelerating, while also acknowledging that Google Fiber’s broadband subs, which aren’t factored into the latest data from the U.S. Copyright Office, are likely to be “meaningfully higher” than its video totals.

While it’s still early days for Google Fiber, which uses a demand-based deployment approach, the numbers have apparently been good enough to warrant further investment. Google Fiber has begun to roll out its 1-Gig-capable network in Austin, Texas, and announced in January that it will expand to 18 new cities across four metro areas in the Southeast U.S. – Atlanta, Ga.; Charlotte, N.C.; Nashville, Tenn.; and Raleigh-Durham, N.C.

- See more at: http://www.multichannel.com/news/technology/google-fiber-ended-2014-29867-tv-subs-report/388806?utm_medium=twitter&utm_source=twitterfeed#sthash.pCYEy7S5.dpuf