This is a nice — if predictable — pickup for Epix, which has been struggling to become a fixture on pay TV distributors’ premium channel lineups. Bright House is the No. 6 cable company, with about 2M video subscribers including a heavy concentration in Florida. But most of its carriage deals are handled by Time Warner Cable. And TWC gave a big boost to the Viacom-Lionsgate-MGM-owned service in March when it became the biggest pay TV operator to carry Epix. With a 90-day free introduction, Epix “has become one of Time Warner Cable’s most-watched networks,” Lionsgate CEO Jon Feltheimer told analysts last week. Distributors including Comcast and DirecTV have questioned the need to offer a movie-oriented premium channel in addition to ones controlled by HBO, Showtime and Starz.
Ovation will be back on Time Warner Cable and Bright House Networks systems and has committed to carry 200 or more hours of original programming dedicated to the arts in 2014, 250 hours in 2015 and 300 each year after. The arts-focused network was the guinea pig for TWC boss Glenn Britt’s plan to drop poor-performing networks as a way to control costs, dumping the arts-focused network when its previous carriage contract expired at the end of 2012. “Ovation is among the poorest performing networks, and is viewed by less than 1% of our customers on any given day,” the No. 2 cable operator said when it announced it was cutting off Ovation. “We’ve paid more than $10 million in carriage fees to Ovation over the past several years. They’ve had ample opportunity to improve the ratings and the content, and have failed to deliver.” One of TWC’s biggest beefs with Ovation was the lack of original programming. But the network has learned its lesson since: the commitment to the original hours comes after it launched an in-house production studio Ovation Studios. Among the new offerings will be a James Franco-hosted series James Franco Presents which premieres next month.
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.
The deal looks like good news for cable operators — and Dish Network, which is amassing wireless spectrum to transmit entertainment on its own national broadband service. In effect, the cable guys are finally acknowledging that it’s too late for them to compete with Verizon, AT&T, and Sprint by creating their own wireless phone business. Cox tried in a few communities, but said two weeks ago that it has stopped selling new subscriptions — and will stop providing any service in March. Now Comcast, Time Warner Cable and BrightHouse Networks are following suit: Pending approval by the FCC and antitrust regulators, their joint venture, called SpectrumCo, will provide Verizon with 122 licenses for wireless airwaves that reach about 259M people. (The technical term is POPs, for ”points of presence.”) Comcast owns the biggest stake in the venture and will collect about $2.3B; Time Warner Cable should receive $1.1B and BrightHouse $189M. Wells Fargo analyst Marci Ryvicker figures the companies will see a 60% profit from the investments in spectrum that they made beginning in 2006. The companies say that the deal is “an important step toward ensuring that the needs and desires of consumers for additional mobile services will not be thwarted by the current spectrum shortage.” But cable isn’t shutting the door on wireless. Verizon and the cable guys say that they “will become agents to sell one another’s products” — and that could include opportunities for cable operators to become wholesalers …
Cable and telecom execs are buzzing this morning about the possibility of a major deal involving Sprint Nextel that could help cable operators offer wireless services along with the standard “triple play” options: TV, wired broadband, and wired phone. Comcast and other operators are talking with Sprint about a buyout of struggling wireless firm Clearwire. Its shares are up more than 30% in mid-morning trading following a Bloomberg story about the possible deal. Here’s how it might work: Comcast and other operators – perhaps Time Warner Cable, Cox, Cablevision, and Bright House Networks – would make an investment in Sprint. The telecom company then would buy all or most of the 46% of Clearwire that it doesn’t already own. (It’s unclear whether that might include the 15% stake owned by Comcast, Time Warner Cable and Bright House Networks.) Presumably, cable companies then would offer Sprint’s wireless phone and broadband services.
Sprint could use some help: It has been in the red for 15 consecutive quarters. And if federal officials allow AT&T to buy T-Mobile, then Sprint could become an also-ran behind the newly merged company and Verizon. Clearwire’s also in trouble. It’s in the red and needs at least $600M to build and upgrade its speedy 4G network which is available to 130M households and has about 7.7M customers.
The big question is whether the deal would be worth the trouble for cable companies. Most have promised to return cash to shareholders — not to make big …
The Pac-12 Conference, which until July 1 was known as the Pacific-10 Conference, announced today that it is forming a national and regional sports network to launch in August 2012 that will broadcast 850 sporting events a year, including every football and basketball game, with subscribers also able to watch games on mobile and the iN Demand VOD platforms. A national network will join six regional channels – Washington, Oregon, Northern California, Southern California, Arizona and Mountain — to cover the six states in the college sports conference, which has added the University of Colorado and the University of Utah to its roster to give it 12 members. The 350 nationally televised games will be split with Fox and ESPN, which already have a long-term contract with the conference worth $3 billion. Comcast, Time Warner Cable, Cox Communications and Bright House Networks also are part of the venture, with satellite and telco platforms expected to come into play later. At its launch, the conference said the network will reach about 40 million cable customers nationwide.