While he hasn’t decided whether to oppose the deal in Washington, DirecTV CEO Mike White says Comcast’s $42.5B pact to buy Time Warner Cable would result in “unprecedented media concentration in one company.” The No. 1 satellite service provider is “still assessing some of the competitive implications” but White wants to “ensure it’s appropriately scrutinized” — especially the “effective broadband monopoly they might have in two-thirds of the country.” The owner of NBCUniversal also would have a lot of power to raise content prices. That “creates some significant changes in the competitive landscape that we have to think hard about.” Couldn’t Comcast use its clout, with 30M subs after a merger, to slow the rate of increase in programming costs? Perhaps, but “it’s a complicated dynamic because that leverage may not flow through to its competitors.”
White says he’ll continue to resist high programming costs.”None of our customers have an income like those of us on the call here.” He wouldn’t comment on the state of the carriage negotiations with The Weather Channel, which went dark on DirecTV in January, but says that his company “may have lost a few thousand customers in the first quarter” due to the dispute. “Fundamentally I continue to believe if your viewership goes down ….that should be reflected in the price.” Read More »
If you guessed Sam Champion‘s new The Weather Channel show was going to be called AMHQ — you win! Champion himself did the unveiling, this morning, via Twitter.
TWC put out a news release, however, explaining AMHQ is short for America’s Morning Headquarters – but that the official title is AMHQ. Read More »
Fans of the shock jock won’t like the conclusions that Macquarie Equities Research’s Amy Young reaches in a new report on this provocative question. While Howard Stern was a big draw for SiriusXM in 2004 when he agreed to … Read More »
On a day when a blizzard blanketed a large chunk of the country in snow and ice, there’s a new offensive in the carriage war between DirecTV and the Weather Channel. As the blackout continued during the whiteout, TWC has fired off an open letter to the satcaster’s board (read it here). The missive, signed by the Weather Company Chairman and CEO David Kenny, urges DirecTV to waive termination fees for customers who want to switch to a provider that carries the Weather Channel. “We have heard from viewers across the country, like Heather in Texas who wrote, ‘We just signed on with DIRECTV.…Had I known this was going to happen I would NOT have signed up. I read the fine print (too late) and found that they can do that. It’s wrong.’” The letter, dated tomorrow, closes with a near-plea for expediency: “As our team of more than 220 expert meteorologists tracks winter storms, wildfires in Southern California, and many other potential weather emergencies, a prompt reply—not to me, but to your customers—would surely be appreciated.”
Weather Channel Pushing Public Safety Image After DirecTV Blackout
DirecTV Hits Back In Weather Channel Spat, Citing Customer Complaints
All this comes on the heels of the Weather Channel’s weekend session at TCA, when execs reiterated their claim that DirecTV’s blackout — which began January 14 at midnight ET. is putting Americans at risk. The Q&A with TV critics was one day at Moody’s warned that the channel’s bond rating could suffer if the satcaster dispute continues. Read TWC’s press release that accompanied its letter to DirecTV below:
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The Weather Channel faces “severe operational and credit ramifications” if it can’t reach a deal with DirecTV to bring it back to the satellite company’s 20M subscribers, Moody’s Investors Service says today. The channel went dark this week on the No. 1 satellite service. The bond rating firm isn’t worried yet, saying that “there is a good chance that both parties will eventually renew the contract in order to avoid customer dissatisfaction and churn.” But TWC had better watch out. Its debt burden sharply increased last year when it borrowed $600M to pay a dividend to its owners — NBCUniversal, Bain Capital Partners, and Blackstone Management Partners. Moody’s said at the time that the borrowing seemed to indicate that “NBCU is comfortable with high leverage at [TWC], and signals that it does not view [TWC] as a strategic core-asset, but as an opportunistic investment.” Although it said that TWC generates enough cash to pay down the debt quickly, it expected the company to “either make acquisitions or build capacity for future dividend payments.” That’s why the DirecTV dispute is worrisome. Revenues from TV ad sales and distributor fees account for as much as 60% of TWC’s sales, Moody’s estimates — and without DirecTV the top line number could decline “in the mid single to low double digit range.” That could trouble debt owners: TWC is “weakly positioned” in Moody’s rating of B1, which indicates its belief that its debt too risky for many investors. Read More »
4TH UPDATE, 10:05 PM: Each side is — gasp! — blaming the other for the blackout. Now DirecTV has issued a statement of its own regarding the Weather Channel. It reads in part: “Consumers understand there are now a variety of other ways to get weather coverage, free of reality show clutter, and that The Weather Channel does not have an exclusive on weather coverage – the weather belongs to everyone.” (The full statement is below.)
Related: Weather Channel Tells TV Critics That DirecTV Is Putting Americans At Risk; Critics Dubious
3RD UPDATE, 9:21 PM: Here we go again. In the latest showdown between a pay TV company and a content provider, the Weather Channel is no longer available on DirecTV as of midnight Eastern. The parties were unable to reach a carriage deal. DirecTV customers who tune to the familiar channel 361 are getting the feed from a small operation called WeatherNation, which the satcaster had snuck onto channel 361 before year’s end. “We offered DirecTV the best rate for our programming, and I am shocked they have put corporate profits ahead of keeping a trusted channel that subscribers rely on every day,” David Kenny, chairman and CEO of The Weather Company, said in a statement tonight. “We are not looking for a large fee increase. We are simply looking for a fair deal. …” (Read the company’s full statement below.)
During the Weather Channel’s crowded session at the TCA Press Tour this morning, its president David Clark and Sam Campion — recently poached from Good Morning America — toed the company line that the satcaster not carrying their channel amounts to a public safety issue. Their statements echoed a release from the Weather Channel late Friday that urged DirecTV subscribers to call their congressmen to voice concern about losing the service. The satellite TV giant responded with a release of its own saying it had received numerous complaints about the Weather Channel’s growing slate of reality programming.
The Weather Channel-DirecTV action comes four months after Time Warner Cable and CBS settled their dispute that had resulted in a monthlong blackout of CBS and Showtime channels for TWC customers. Read More »
A major storm rained down on Winter TV Press Tour 2014 this morning when The Weather Channel took the stage to blast DirectTV over their current carriage dispute. In anticipation of the channel’s appearance before a couple hundred journalists at the tour, it issued an ominous campaign late last night warning viewers they needed to contact their congressional reps to intervene, or else DirecTV would take away “its critical weather programming,” calling it a “public safety issue.”
TV critics at the press tour weren’t entirely drinking The Weather Channel’s Kool-aid. One critic noted TWC is a successful company owned by a big corporation, asking “Is it fair to declare it a public utility?” in what’s really a business dispute.
Related: DirecTV Hits Back In Weather Channel Spat, Citing Customer Complaints
“Absolutely. And I’m not kidding,” Weather Channel president David Clark responded ominously. “If you’ve ever been in a severe weather situation and you need to make a decision to protect your family and you need to make it fast” you need “to know your information comes from a trusted source… We have a mission to serve that we take seriously. Don’t think you can stand a fly-by-night alternative to that,” he said, warning “you’re going to be putting your audience at risk.”
And by “fly-by-night” he meant a little channel called WeatherNation that the satellite giant’s subscribers might have noticed appearing right next to Weather Channel on DirecTV’s lineup in recent weeks, as the satcaster’s carriage deal with The Weather Channel is set to expire next week.
At Clark’s side on stage, The Weather Channel’s pricey new hire Sam Champion warned “there isn’t one,” in re alternatives to The Weather Channel in a weather emergency. “I’d love to say we can rest assured we’re safe in our homes because of BLANK. There isn’t one… Getting people ready, getting them through a storm that is the worst time in their life, is something I don’t take lightly, and this channel does it better than anyone else — anywhere . The Coast Guard, the Navy — everybody — police officers, fire officers watch this channel during emergencies to get information. That’s a responsibility that no one takes lightly. What we’re trying to say is we want people to have access to it.”
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This is becoming a theme at the International CES. Earlier today Netflix said that it will stream 4K content including the next season of House Of Cards to LG TV sets. Now Samsung is raising the stakes … Read More »
One in a series of Deadline stories that look back on 2013 and ahead to 2014.
Some of 2014′s most important sporting events won’t take place on a grassy field or an indoor court. They’ll play out in board rooms as TV execs continue their struggle to balance the diverging interests of those who love sports, and others who don’t — but still have to subsidize the programming as part of the pay TV bundle. Sports accounts for about 33% of cable and satellite company programming costs, Barclays Equity Research’s Kannan Venkat estimates. That percentage will grow: Sports prices are rising about 10% a year while other channels rise about 7%. DirecTV CEO Mike White says consumer frustration could soon begin to boil. “There’s a point where you have to stand up for the 99% who are angry about their bills.”
Will 2014 be the year when distributors make a serious effort to slow their rising sports costs? It’s possible, especially in dealings with regional sports channels — particularly in Los Angeles. Time Warner Cable is about to introduce a service for Dodgers games, SportsNetLA, following its launch last year of SportsNet and Deportes which show Lakers games. The cable company is said to want other distributors to pay $5 per subscriber per month for the Dodgers, roughly the same price MSG charges for its regional service that offers the New York Knicks and Rangers. But so far other distributors have not stepped up to the plate. DirecTV could help everyone hold out; the No. 1 satellite company has led the charge against high-priced regional sports networks. It declined to carry the Pac-12 Network which is home to two schools (UCLA and USC) in the key LA market, the University of Texas’ Longhorn Network, and Comcast-owned sports services in Portland, Philadelphia and Houston. (The Houston network filed for Chapter 11 bankruptcy protection in September.)
Related: TWC Sued For Passing Lakers-Dodgers Costs On To Customers
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Deadline Financial Editor David Lieberman and host David Bloom talk about highlights from this week’s big UBS media investor conference, which was dominated by lots and lots of talk about the future of pay television, whether the conversation was about DirecTV dropping channels, Viacom and Sony possibly starting an online service, Aereo’s big talk about partnering with cable companies and challenging broadcasters in the Supreme Court, or rising ad revenues for CBS and other broadcasters in a year plumped up by revenues from the Winter Olympics, mid-term elections and an improving economy.
Deadline Big Media podcast 63 (.MP3 version)
Deadline Big Media podcast 63 (.M4A version) Read More »
The No. 1 satellite company will look at set-top box data to “determine cost/value tradeoffs” different channels offer — and then “prune/drop less popular channels when necessary” — it said today in an Investor Day gathering. ”Programming costs is the biggest issue affecting our industry,” DirecTV CFO Pat Doyle says. He hopes to hold the annual growth in U.S. programming costs to between 7% and 9% a year through 2016, roughly even with this year’s 9%. Execs are eager to persuade the Street that the company’s annual U.S. revenues will grow by “mid-single digit” rates through 2016 — possibly ahead of the consensus estimate of 4.4%. They also forecast “high single digits” annual cash flow growth, beating expectations for 6.6%. New businesses could add $1B to the top line in a few years — and one could be an Internet video service. “We’re going to be opportunistic in looking at that space,” CEO Mike White says. It probably would be less ambitious than, say, Intel’s attempt to offer a full-fledged pay TV service on the Web. That “wouldn’t make sense” as broadband providers move to usage based pricing. Noting that a niche service might work, White added “we’ll have more to say about that later in the year.” Meanwhile, he has little interest in integrating Netflix into DirecTV’s set top box. Although it’s “not that hard to do,” it wouldn’t be in his interest to “undermine our pay-per-view movie business.” About 30% of DirecTV subs currently also subscribe to Netflix. Read More »
The No. 1 satellite company warns broadcasters that their rush to raise retransmission consent fees could backfire. DirecTV‘s outlays to broadcast stations are up 50% this year, and that’s “not sustainable,” CEO Mike White told analysts today … Read More »
Not so long ago, analysts looked to DirecTV‘s Latin American operations for encouraging signs about the company’s future while the U.S. business started to stall. But most of the upbeat surprises in Q3 were in the U.S. as DirecTV benefited from Time Warner Cable’s battle with CBS — and comparisons with last year when the No. 1 satellite company suffered from its own fight with Viacom. DirecTV’s net income of $699M is +23.7% vs the period last year on revenues of $7.88B, +6.3%. Analysts thought the top line would be a little lower, at $7.85B. Earnings at $1.28 a share were well ahead of forecasts for $1.02. The U.S. operation seemed to be on track with subscriptions up nearly 1% vs last year to 20.16M, ahead of expectations. Domestic revenues grew 7% to $6.17B due to price increases and higher pay-per-view sales — offset somewhat by promotional discounts. The average monthly revenue per sub increased 6.2% to $102.37. The operating profit margin also grew to 16% from 15.2% as cost controls helped to take the sting out of price increases for programming. The good news in Latin America includes the settlement of a dispute with Brazilian officials over performance rights fees that cost less than DirecTV anticipated. But for the most part the region fell short of investor expectations. Subscriptions were up 17.3% to 11.34M — some analysts were looking for about 11.45M. Revenues in the region were +5.4% to $1.66B with an operating margin of 15.8%, up from 14.0%.
Related: DirecTV CEO Weighs Aereo-Like Service To Fight Rising Retransmission Prices Read More »
Seems they’re considering just that — with Time Warner Cable weighing the possibility of buying the Barry Diller-backed streaming video company — Bloomberg reports today, citing unnamed sources. Aereo uses thousands of tiny antennas to pick up local TV signals that it streams to its subscribers without paying broadcasters a dime. If the cable and satellite companies followed through, it could create a nightmare for broadcasters. TV station owners likely will collect $3B this year from cable and satellite company retransmission consent payments, and the amount is expected to double during the next five years. By 2015 the payments could account for 24% of CBS’ cash flow, 11% of Fox’s, and 3% of Disney’s, Guggenheim Partners’ Michael Morris predicted this week. Much of that revenue could evaporate if cable and satellite companies replicated Aereo’s model. No wonder the major TV station owners have asked several courts, including the U.S. Supreme Court, to rule that the service infringes on their copyrights. (Aereo says it merely leases consumers the kind of equipment they could use to watch and stream TV at home for free.)
Related: Nexstar Slaps Aereo With 2nd Utah @uit, Seeks Injunction
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Family run News-Press & Gazette has a relatively small chain of 13 stations mostly in Arizona, California, Colorado, Oregon, Idaho, and Texas. But the contract impasse with the No. 1 satellite company may affect ABC: News-Press’ network affiliates … Read More »
Liberty Media’s John Malone and other execs are pounding the drums for cable and satellite companies to merge — in part to help hold down their rising programming costs. You’d expect outlays to … Read More »