Apple and Comcast are looking to team up on a deal for high quality streaming TV, “people familiar with the matter” tell WSJ. News of the early talks between the companies comes a month after Bloomberg reported …
We’re still waiting for Apple to introduce its long-rumored iWatch. But Google today showed what it plans for mobile devices, beginning with watches including ones made by LG, HTC, Samsung and Motorola: The Android Wear software integrates voice commands and the kinds of location-based information that owners …
The same day that Disney launches its mega-hit Frozen in the digital realm, the company is announcing a cloud-based purchase and storage service for its films. In a new deal with Apple, Disney Movies Anywhere goes live today exclusively through iTunes, kicking off with more than 400 Disney, Pixar and Marvel titles such as Iron Man 3, Finding Nemo and Mary Poppins. The service allows users to browse, buy, manage and watch movies on PCs and iOS devices using an app or website. The move comes 15 months after the company announced it was pulling the plug on Disney Movies Online, its barely-known and costly Internet pic service.
Not that DMA is without precedent.
In many ways, DMA is Disney’s answer to UltraViolet. While the House of Mickey has not been a part of the UltraViolet gang, the cloud-based digital rights library has been backed by many of the other major studios as well as Lionsgate, DreamWorks Animation and HBO, among others. With two such systems now on the movie market, there undoubtedly will be concerns about consumer confusion over DMA and UltraViolet, which debuted in 2011. The latter’s backers want the service to be the industry standard and to provide consumers with a single digital locker for their movies. A desire the new DMA now challenges.
Additionally, the tie-up with Apple is key for Disney. Right now UltraViolet titles can be played on Apple devices, with the help of an app, but don’t show up in iTunes. DMA is powered by KeyChest, Disney’s adaptable technology that can integrate with any existing distribution partner as well as work with new ones to enable access to digital content. DMA bolsters the companies’ ties with Apple. Last year, the Disney Channel app was made available on Apple TV.
In this week’s podcast, Deadline Executive Editor David Lieberman and host David Bloom kick the tires from several perspectives on that $45 billion Comcast-Time Warner Cable merger that would remake the cable industry. What will it mean for the cable industry, Hollywood and consumers? And what are its prospects for winning regulatory approval?
The Davids also check in CBS’s red-hot quarter and continued optimism on retransmission fees despite the big cable merger; welcome the long-in-coming videogame industry revival; and engage in shameless speculation about the latest reports of an Apple set-top device, and whether it might survive the Time Warner-Comcast merger.
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom catch up on the many highlights from earnings season announcements, beginning with those by possible dance partners Comcast and Time Warner Cable and what their news might mean for Comcast’s takeover bid. They also take the market temperature on Viacom and tech giants led by Google — which sold off its Motorola Mobility unit after owning it just two years — and Facebook, Apple, Yahoo and Amazon. They also look at exhibitors’ demands for shorter movie trailers and whether studios will play along.
Does that mean the glass is half full? Apparently not to investors trading in the initial moments after Apple reported its results for the quarter that ended in December. Shares are down about 5% post-market after the electronics company reported net income of $13.1B, essentially flat with last year, on revenues of $57.6B, +5.7%. The top-line figure is slightly higher than the $57.4B that analysts expected. Yet earnings at $14.50 a share were well ahead of the $14.08 the Street anticipated. The company says that revenues in the current quarter could hit $44B; bulls had been hoping for something closer to $46B. Investors also might be disappointed in the news that Apple sold 51M iPhones in its fiscal Q1, which it says is an “all-time quarterly record” and up 6.7% vs the period last year. Optimists thought the company would come closer to 56M. Apple also sold 26M iPads (also a record and +13.5%), 4.8M Macs (+17.1%), and 6M iPods (-52.3%). “We love having the most satisfied, loyal and engaged customers, and are continuing to invest heavily in our future to make their experiences with our products and services even better,” CEO Tim Cook says.
Here’s how the latest results look:
The activist investor made his pitch in a letter to fellow shareholders today urging them to support his resolution calling on Apple to increase its share-repurchase plan. “Given that the company has $130 billion of net cash and $40 billion of expected annual earnings, and the fact that it is hard to find a better time in history to borrow money, a $50 billion share repurchase over the course of fiscal year 2014 seems more than reasonable to us,” Carl Icahn writes — calling this “one of the greatest examples of a ‘no brainer’ we have seen in five decades of successful investing.” He adds that he’s an Apple fan, and over the last two weeks bought $1B of its stock, including $500M today, for a total holding worth about $3.6B. One reason for his optimism is his hope that Apple will finally introduce a TV set that will make it easy for users to watch shows from conventional pay TV and the web, and take advantage of the growing interest in 4K, or Ultra HD, screens. “While cable companies will likely be slow to upgrade their linear TV infrastructure due to cost, video content is expected to be accessible through the internet via services like Netflix and others,” Icahn writes. “We believe ultra high definition represents a major catalyst for the next TV replacement cycle and a promising moment for Apple to introduce its first new product in this category.”
Deadline Financial Editor David Lieberman and host David Bloom look ahead to the six big questions facing big media after a big 2013, as potentially huge changes loom in the coming year. What does 2014 hold for Netflix, Apple, cable TV consolidation and the broader pay-TV industry, local broadcasting and theatrical exhibition? Lieberman puts on his fortuneteller hat and looks at what paradigms could be shifting.
One in a series of Deadline stories that look back on 2013 and ahead to 2014.
People in and around the media business may look at 2013 as the calm before the storm. The Dow Jones Media Index, up nearly 39% this year (as of mid-December), is the highest it’s been in at least a decade while stock prices are at or near all-time highs for industry leaders including CBS, Comcast, Discovery Communications, Disney, Netflix, and Viacom. Many execs say that the good times will keep rolling in 2014. Additional ad revenues will pour into the market for the Olympics and mid-term elections, and media companies are making headway in their efforts to adjust to social media and new technologies. But next year moguls may have to work harder than they have in years for their unconscionably high pay. They face a possible return of merger mania, new efforts by tech giants to divert advertising and subscription dollars, and skittish shareholders poised to sell at the first sign that company earnings can’t fulfill their outsized expectations.
Here are a few of the specific questions on the minds of industry insiders as they look ahead to 2014:
Will Netflix tap the brakes on its content spending spree?
Hollywood’s becoming addicted to Netflix’s money. After a few years of license deals it owed creators of its streaming content $6.5B at the end of September, with 43% due in less than a year – and it has vowed to commit nearly $3B in 2014 for TV shows and movies. Those are huge numbers for a company that’s expected to generate $4.4B in revenue this year. Netflix can justify the outlays because it’s growing like Topsy. The number of domestic households that subscribed to the $7.99-a-month service grew 25.8% to nearly 30M in the 12 months ending in September. That fueled a 300+% increase in the stock price in 2013 making Netflix more valuable than Sony in investors’ eyes. “At some point [Netflix] could emerge as a monopolistic player in its [subscription video on demand] niche that would allow it to increase pricing, subs, and leverage in content negotiations,” Janney Capital Markets’ Tony Wible says, summarizing the bull case. But bears warn that Netflix will find itself overextended if sub growth slows, Amazon or Hulu gain momentum, and especially if cable companies aggressively move to a usage-based pricing system for broadband. Producers shouldn’t “assume Netflix and Amazon will bail them out and buy everything they make, forever,” Bernstein Research’s Todd Junger notes. “Eventually somebody has to lose.” With several shareholders urging CEO Reed Hastings to show Hollywood a little less love, studios in 2014 will have their antenna up for any signal that indicates a shift in Netflix’s spending plans.
The activist investor disclosed his effort in a tweet — apparently coordinated with a release from Time magazine promoting its new cover story about him where he discusses his proposal. “I’m not against the management of this company,” he …
Listen to (and share) Episode 59 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s financial editor joins host David Bloom and Jonathan Geller of Deadline’s sibling site BGR.com in talking about the mobile business, starting with the fundamental face-off between Apple and Google over mobile business models. They also talk about the prospects for Samsung, Microsoft and BlackBerry; T-Mobile’s radical new approach to the mobile phone business; a new study suggesting more than half of Internet bandwidth is consumed by just two sites, YouTube and Netflix; and the dubious future of next-generation video game consoles as Sony launches the PS4 today and Microsoft debuts the Xbox One in a week.
Separately, the two Davids pick through the most notable news from this week’s media earnings reports, including MGM’s 2012 gifts that keep giving, CBS and Dish Network doing a dance around the Hopper and Viacom’s debt to Miley Cyrus and some zombies.
Listen to (and share) episode 56 of our audio podcast Deadline Big Media With David Lieberman. Deadline’s executive business editor talks with host David Bloom about giant pay-TV profit margins, Netflix’s big quarter as it moves past HBO in the United States; Carl Icahn’s latest efforts to turn the heat up on Apple; and Apple’s very interesting series of new hardware and software products and what they might mean for Microsoft.
The activist investor isn’t limited to Twitter and CNBC to broadcast his views. Hot off his $800M windfall this week from the sale of half his Netflix shares, today he introduced a site, Shareholders’ Square Table, where he says he’ll “discuss what can be done to change our current, dysfunctional system of corporate governance” that results in CEOs and boards “that are strangling shareholders and the economy.” His first target is Apple: Icahn published a letter he sent yesterday to CEO Tim Cook repeating a plea for the company to spend $150B to repurchase shares. Over the last month Icahn boosted his Apple stake by 22% to 4.7M shares “reflecting our belief the market continues to dramatically undervalue the company.” He adds that he “could not be more supportive of you, the existing management team, the culture at Apple and the innovative spirit it engenders.” But he’s unhappy with the current pace of buy-backs. “Apple’s Board of Directors does not currently include an individual with a track record as an investment professional,” he says. “In my opinion, any further delay in executing the buyback we hereby propose will reflect this lack of expertise on the board.” If Apple follows his advice, then in three years the share price — which closed yesterday at $524.96 — could appreciate to $1,250. To show that he isn’t in this to make a quick profit, Icahn says that he would “withhold my shares from the proposed $150 Billion tender offer. There is nothing short term about my intentions here.”