Time Warner Cable raised a lot of eyebrows when it paid $3B for TV rights to the LA Lakers for the next 20 years and then a record $8B for LA Dodgers rights for the next 25 years. When the Dodgers deal launches in 2014, the cable company will have four new networks for all that content. But the plan to partially pay for those new channels via boosting TWC customers’ fees — even from Southern California users who don’t want the channels and have no way to opt out of the bundles — apparently is not sitting well. Some of those customers filed a class action suit in LA Superior Court today targeting TWC,
the Lakers and the Dodgers for restitution and injunctive relief for violating California Business & Professions Code 172000. The complaint (read it here) says unless restrained by the court, TWC will “pass these costs along to its total Southern California subscriber base, resulting, directly or indirectly, in additional fees passed onto subscribers beginning with the 2014 season of approximately $4-$5 per month per subscriber … which together add (or will if unrestrained) $100 per year to the subscriber’s TWC bill”. Read More »
Time Warner Cable Sued For Passing Lakers-Dodgers Costs On To Customers
Time Warner Cable’s Share Price Slips As Talk Of Merger With Charter Cools
Investors like the consistent reports that Charter Communications is prowling for acquisition targets, especially now that it’s backed by Liberty Media which recently paid $2.6B for a 27% stake in the cable operator. But some are less sure than they were late last week that Time Warner Cable will be a target. Shares in the No. 2. cable company slid 2.5% to $101.29 today. That’s just a slight retreat after Friday’s 8.3% jump to a 52-week high of $104.13, which followed a CNBC report that Charter has its eye on a transformational deal with Time Warner Cable. Liberty Media CEO Gregg Maffei met with TWC chief Glenn Britt recently to talk about the benefits of of a merger of equals, CNBC’s David Faber reported. Although there was no offer, Faber said that TWC decided to “re-engage with longtime advisor Morgan Stanley and hire an outside PR firm in case it needed to defend against a more public onslaught.” Investors don’t rule out the possibility that Charter, which has a market value of $11.9B, will make a bold effort to combine with TWC, valued at $29.5B. But many believe Charter probably would start off looking for smaller targets such as Cox, Mediacom, or Suddenlink. That was also a recurring theme in conversations at last week’s annual Cable Show in D.C. Charter was +1% today to $117.72 after its 5.6% bump on Friday. Most cable companies “are trading on deal … Read More »
Justice Department Questioning Time Warner Cable’s Restrictions On Broadband Rivals: NYT
It’s not the lead of the NY Times‘ report on Time Warner Cable and other cable and satellite distributors’ tactics to make it difficult for web rivals — most notably Intel’s venure — to enter the industry. But it could be one of the most interesting wrinkles in the story, which picked up steam this week at The Cable Show in Washington DC. That’s where Time Warner Cable boss Glenn Britt suggested during a Q&A that his company designed carriage deals with language that could prevent alternate programmers from getting access to the same content. “We actually have roughly 300 different deals for different networks and I hesitate to make any generalizations”, Britt said Tuesday. “We may well have ones that have that prohibition. We have other ones that probably, say, if you go over-the-top then we get those same rights. And all the variations on that you can imagine. This is not a cookie-cutter kind of business”. Time Warner Cable yesterday defended itself against the anticompetitive claims being bandied about since then, saying in part in a statement: “The amount and scope of exclusivity and windowing in Time Warner Cable’s arrangements with programmers pales by comparison to that found between other players in the entertainment ecosystem”. Stay tuned on this one.
John McCain Calls On FCC To Review Pay TV Channel Bundles
The FCC might not want to take on this issue — but that hasn’t stopped the Arizona senator, and former GOP presidential candidate, from pressing it today. “The time has come for television video consumers to have the option to either purchase individual channels or the tiers of channels currently offered by cable and satellite companies,” John McCain says in a letter to Acting FCC Chairwoman Mignon Clyburn. “Today, this option does not exist and consumers are forced to buy channels they do not want,” he wrote. “This is wrong, and action should be taken.” Noting that consumers “want options that the current television market is not providing”, McCain asked Clyburn “to review this issue and take steps to shift this balance toward consumers, by providing consumers with greater choice when purchasing television video”. He rejects cable programmers’ claim that the pay TV bundle is a good deal for subscribers. Read More »
Time Warner Cable CEO Warns That Price Hikes Might Backfire: Cable Show
Time Warner Cable CEO Glenn Britt, cable’s Jeremiah when it comes to the industry’s rising prices, appeared more worried than ever today — and still out of step with his colleagues —
when he discussed the issue with Wall Street analysts at the annual Cable Show taking place this week in DC. “People are starting to pay attention to the fact that the multichannel TV package, the big package which is in 90% of the homes, is starting to get too expensive for lower-income people,” he said. Broadcast networks, sports channels and others who have stepped up their demands for higher rates shouldn’t become cavalier just because “nothing is going to happen” with Sen. John McCain’s bill to promote a la carte pricing. (Britt added, “And he doesn’t think so either, by the way.”) The bill is “just the beginning of it. It would behoove the whole industry including the content companies who are all crowing about their pricing power to pay attention because it will come to some end that we may not like if we all keep behaving the way we are.” It was hard to find others at the industry love fest who’d publicly agree. Read More »
AT&T Mulls Joint Bid For Hulu With Chernin Group
The free-for-all to acquire Hulu might be turning into a tag-team match. Telco titan AT&T is considering a partnership with the Chernin Group, founded and run by ex-News Corp exec Peter Chernin, to make a run at the streaming service, AllThingsD reports. AT&T isn’t among the seven bidders for Hulu that emerged last month, but
the Chernin Group is. In fact, Chernin helped create the premium video service with he was at News Corp, which co-owns Hulu with Disney and Comcast. The LA-based Hulu board began seeking the latest round of bidding in March and is expected to make its next move in the next several weeks.
TiVo Shares Spike Following Settlement Of Patent Infringement Case With Motorola
No details on the terms yet, but TiVo stock closed +8.3% after the court in Texas where the trial was to begin on June 10 confirmed that the case has been settled. TiVo had alleged that Motorola DVRs used by Time Warner Cable infringed on its patents for common processes including the ability to watch one show while recording another. Susquehanna Financial Group’s Thomas Claps had forecast that TiVo would prevail with a settlement that could go as high as $1B. Brean Capital’s Todd Mitchell said recently that “TiVo is well positioned for this case based on precedent, and we estimate potential damages could be as high at $800 million.” Prior to this case, the DVR pioneer was batting 3-for-3 in similar patent cases, winning settlements with Dish Network, AT&T, and Verizon. TiVo has no comment on the case. It will face off with Time Warner Cable again next year in a similar patent dispute involving Cisco.
Time Warner And China Media Capital Form Investment Partnership
NEW YORK – June 6, 2013 – Time Warner Inc and China Media Capital, China’s leading investment
fund focused on media and entertainment, today announced the formation of a strategic investment partnership. The announcement
was made in the western Chinese city of Chengdu, where top business leaders convened for the 2013 Fortune Global Forum. The goal of the partnership is to capitalize on China’s rapidly expanding media sector as digital devices proliferate and China’s demand for high-quality content across multiple platforms rises.
“This partnership with CMC and Ruigang Li will give us a unique window into one of the world’s largest and fastest growing media and entertainment markets,” said Time Warner Chairman and CEO Jeff Bewkes. “Increasing our global presence is one of Time Warner’s strategic priorities and China is one of the most attractive territories in which we operate, but it is complex. This alliance will give all our businesses a savvy and accomplished partner as we strive to bring our leading brands and storytelling to people everywhere, across a wide range of devices.”
Time Warner Cable And LIN Resolve Retransmission Dispute
More than 1.5M Time Warner Cable subscribers in 14 markets can relax. The cable company — which also represents Bright House Network – ”has reached an agreement with LIN Media for continued carriage of their broadcast stations,” it said today without details about terms. The companies’ carriage agreement was due to expire today, and LIN had warned that its stations might have to go dark on TWC and Bright House systems. The two cable companies account for about 20.6% of LIN’s viewers, according to SNL Kagan data. Stations that appeared to be at risk included LIN TV’s NBC, CW, and MyNetworkTV affiliates in Austin; CBS and CW stations in Buffalo, NY; NBC and CW outlets in Dayton, OH; and Fox and CW stations in Green Bay. TWC said that LIN wanted a 50% hike in the retransmission fees it negotiated two years ago. LIN countered that it was asking for “less than what Time Warner pays for many of its cable networks with far lower ratings.” LIN’s stations were blacked out on Time Warner Cable for 25 days in fall 2008 when negotiations reached an impasse.
Starz Adds Digital And VOD Rights In New Deal With Time Warner Cable
UPDATED: The companies’ long term carriage agreement replaces a monthly arrangement. It expands the cable company’s opportunities to stream movies and original shows in a TV Everywhere package for computers and mobile devices including Apple’s iPhone and iPads, and what they call “select” gadgets powered by Google’s Android system. In addition, “many markets” will receive on-demand bonus materials for Starz‘ original series including Da Vinci’s Demons, Magic City, and The White Queen. Even so, Stifel analyst Benjamin Mogil says that he believes Time Warner Cable will pay less for Starz’ services “similar to the affiliate deals that were signed in 4Q12 (down 16%).” Lazard Capital Markets’ Barton Crockett says payments likely are comparable to the current monthly arrangement but includes more promotion from Time Warner Cable “which could help grow revenues quickly.” The terms cover Starz and Encore as well as 12 multiplex channels that include Movieplex, Retroplex, and Indieplex.
Reed Hastings On ‘Arrested Development’, Hulu, And Netflix As The Next HBO: Video
CNBC sat down with Netflix CEO Reed Hastings on the sidelines of the AllThingsD conference in Rancho Palos Verdes, CA this morning. Hastings was of course mum on providing ratings data for its new original series Arrested Development, which premiered this week, saying the company was more interested in how it performed over the course of a year or so but that “it’s been huge, just as we hoped”. The push into original programming is a massive step for Netlfix, Hastings said, saying “this is how HBO started”. He also took a swipe at the Big Media congloms among those hovering around the sale of Hulu, saying he’s more worried about a “hungry” independent buying up the rival streaming service.
‘Arrested Development’ Return Got Netflix Subscribers’ Attention
The former Fox cult comedy that had been dark for seven-plus years resurfaced as a Netflix exclusive Sunday night, and fans gobbled it up. According to data analytics company Procera Networks, one DSL network had 36% of devices watching Netflix on Sunday viewing at least part of one episode of Arrested Development, more than triple the number for the streaming service’s House of Cards premiere. One cable network saw an 8% jump in the number of subscribers accessing Netflix over the previous Sunday, and the show represented 10% of all Netflix traffic on one US university network. There also was significant file-sharing of the episodes, PaidContent reports. The editor of TorrentFreak said about 100,000 people downloaded episodes of the show within the first 24 hours –- a significant number but only a tenth of those who grabbed the season premiere of HBO’s Game Of Thrones in April, for example.
Will LIN TV Stations Go Dark On Time Warner Cable?
The broadcaster has begun to warn more than 1.5M viewers in 14 markets that its stations could disappear from Time Warner Cable and Bright House Network systems at the end of next week unless the companies reach a new retransmission consent agreement. Stations at risk include LIN TV‘s NBC, CW, and MyNetworkTV affiliates in Austin; CBS and CW stations in Buffalo, NY; NBC and CW outlets in Dayton, OH; and Fox and CW stations in Green Bay, WI. The two cable companies account for about 20.6% of LIN’s viewers, according to SNL Kagan data. LIN says on its Buffalo CBS affiliate’s website that “It costs a substantial amount of money to produce local programming, bid for top-quality programming, invest in high-definition, and make other upgrades to equipment and technology so we can deliver a superior product.” It adds in a statement that it wants “less than what Time Warner pays for many of its cable networks with far lower ratings.” But Time Warner Cable spokesman Jon Gary Herrera says that LIN is asking for a 50% rate hike, “a very steep increase from a contract negotiated two years ago.” Stations and pay TV companies typically settle retransmission consent disputes at the eleventh hour. But LIN’s stations were blacked out on Time Warner Cable for 25 days in fall 2008 when negotiations reached an impasse.
Shareholders Quiz Time Warner Chief On Political Ties And Gun Coverage
CEO Jeff Bewkes must be glad that he only has to meet with ordinary shareholders once a year. Two dominated the Q&A session at today’s gathering with questions based on a view that Time Warner is engaged in campaigns to promote President Obama’s political fortunes, and gun control legislation. One found it suspicious that Michelle Obama awarded the Oscar for Best Picture, won by Warner Bros’ Argo. He noted that actor George Clooney — one of the film’s producers — had hosted fundraisers for the Obama campaign, and that the President and First Lady attended TNT’s annual Christmas In Washington special to raise money for the Children’s National Medical Center. “What a way to say ‘thank you’,” the shareholder said. Bewkes explained that the TNT show invites “sitting office holders that we have elected, whether wisely or not. They are not candidates.” As for the Oscar, “that’s done by the members of the Academy….That’s a whole forest if you wander into that.” Read More »
UPDATE: WSJ Says DirecTV Also Mulling A Piece Of Hulu

UPDATE, 4:26 PM: The second company eyeing a Hulu stake is DirecTV, the Wall Street Journal reported today.
PREVIOUSLY, WEDNESDAY AM: Time Warner Cable, the country’s No. 2 cable service and a second unidentified pay-TV entity are considering taking a piece of the ad-supported streaming-video service, The Wall Street Journal reports. Slower growth in the pay-TV sector has the NY-based Time Warner Cable paying more attention to its broadband operations lately. Disney, News Corp and Comcast own about a third each of the 6-year-old
service, which recently topped the 4 million-subscriber mark. Other groups mulling a stake in Hulu include Yahoo and the Chernin Group, run by ex-News Corp. exec Peter Chernin.
EXCLUSIVE: Warner Bros TV Shake-Up – Top Exec Bruce Rosenblum Settled Out And Peter Roth Signed To Big Long-Term Deal; All The Behind-The-Scenes Drama & Detail
UPDATE SUNDAY 2 PM: Warner Bros Entertainment CEO Kevin Tsujihara is finally confirming internally my news that Warner Bros Television Group Bruce Rosenblum is exiting. This, after Tsujihara for months and even in recent weeks has told almost everyone there that Rosenblum was staying.
BREAKING … SATURDAY 10 PM… EXCLUSIVE: Hollywood always fires people in success, or so the saying goes. I’ve learned that
the announcement by Warner Bros Entertainment CEO (and soon-to-be-chairman) Kevin Tsujihara is planned for 7 to 14 days after next week’s TV upfront presentations. Despite Tsujihara’s claims for months that he hadn’t made up his mind what to do about the brilliant but sharp-elbowed Bruce Rosenblum, I can tell you Tsujihara declared from Day
One of his new job that “Bruce is an unnecessary layer of management”. This, even though Rosenblum’s Warner Bros Television Group consistently contributes half of Warner Bros Entertainment’s profits year after year. I’m told that Rosenblum won’t be replaced as President of the Warner Bros Television Group now that he’s quietly settled out his contract which expires in August. (Tsujihara never made a move to negotiate a new one for him.) Some already expect Rosenblum not to turn up at next week’s upfronts. Instead Bruce is sitting on a fat severance package in recognition of his more than two outstanding decades at Warner Bros and for keeping his mouth shut during the humiliation of losing the WB CEO job and then getting kicked to the curb on top of that. Many in Hollywood thought Tsujihara might keep Rosenblum in place rather than bust up what is so obviously a winning formula atop the TV group. Instead Tsujihara proved that, just like his Time Warner boss Jeff Bewkes, he is more obsessed by politics and personality than profit. (“It would have been pretty awkward, quite frankly,” Tsujihara told the TV community about keeping Rosenblum on.)
Warner Bros Television President Peter Roth has just been signed to a new long-term deal and will report to
Tsujihara for the first time. Roth reps the increasing power of content and the executives directly responsible for its creation. ”As I look at the key people that exist, Peter comes at the top of the list. He’s at the top of the game right now creatively,” Tsujihara enthused privately on Day One of his new job. But Rosenblum’s roles will be assumed by a new WBTV leadership mix including Warner Bros TV Group EVP Craig Hunegs, Warner Bros International Distribution President Jeffrey Schlesinger, and Warner Bros Television EVP Brett Paul. (“Peter is the big teddy bear but Brent was sent in to beat you up,” notes one exec.) These guys are some of what Bewkes was referring to back on January 28th when he talked about the “very strong benches of people beneath”. All will become the TV group’s new sharp-elbowed negotiators who won’t rub people the wrong way like Rosenblum did.
It’s been a professional and emotional roller-coaster for Rosenblum ever since he expected the top job and didn’t get it. Read More »
Deadline Big Media With David Lieberman, Episode 34
Listen to (and share) episode 34 of our audio podcast Deadline Big Media With David Lieberman as Deadline’s Executive Editor David Lieberman and host David Bloom look at out-of-whack CEO pay; a Washington threat to the Pay TV oligopoly; YouTube goes subscription with 30 new channels; and why Time-Warner’s Jeff Bewkes thinks blockbusters make sense financially.
Deadline Big Media, Episode 34 (MP3 format)
Deadline Big Media, Episode 34 (MP4a format) Read More »
HBO GO Without Cable? Not Yet, Says Time Warner Chief
“We have the rights to do it and we would do it if we thought it was in our economic best interest,” Jeff Bewkes says this morning. But the potential market for a stand-alone HBO streaming service in the U.S. is “not sufficiently big enough now.” HBO chief Richard Plepler in March raised some consumers’ hopes that they might soon be able to subscribe to HBO without first buying basic cable: He said that it could make sense to package HBO GO with cable or phone company broadband services. Bewkes noted, though, that HBO and Cinemax have about 40M subscribers via U.S. cable and satellite services. Time Warner wants to protect those relationships: Distributors’ pricing and marketing decisions are even more important than the quality of the programming when it comes to influencing churn rates at the premium channels. Even so, Bewkes says that at Time Warner “we always look at opportunities to increase distribution” — and it already offers HBO GO without a pay TV subscription in Scandinavia. “We’re always going to keep evaluating it depending on the country.”
Related: Time Warner Q1 Results Weighed Down By Publishing And CNN
Time Warner Q1 Results Weighed Down By Publishing And CNN
The first three months of 2013 were mixed for the entertainment giant. Time Warner says this morning that it generated net income of $720M, +23.9% vs last year’s Q1, on revenues of $6.93B, -0.6%. That missed the consensus analyst forecast of $7.12B. But adjusted earnings at 82 cents a share were well ahead of predictions for 74 cents. At the cable networks, including HBO, revenues were up 3% to $3.7B with operating income +11% to $1.3B. The company says that a 1% decline in ad sales ($12M) and 4% drop in content revenues ($11M) took some of the edge off of subscription revenues which were +5% ($115M). Ad growth at Turner‘s U.S. entertainment networks “was more than offset by declines at its news networks, due to lower demand” as well as the closing of channels in India and Turkey last year. Film and TV entertainment saw operating income grow 23% to $263M even though revenues fell 4% to $2.7B. Time Warner attributes the decline to “lower theatrical performance and a decline in television licensing revenues” — adding that it was offset by higher home video sales for The Hobbit: An Unexpected Journey and Argo. Meanwhile the magazine publishing unit, which the company plans to spin off, generated a $9M operating loss (vs last year’s $5M loss) on revenues of $737M, -5%. Read More »



