In this week’s podcast, Deadline’s Executive Editor David Lieberman and host David Bloom examine whether Facebook paid too much with its $19 billion purchase of messaging service WhatsApp, ponder whether anyone should pay for the maker of blockbuster mobile game Candy Crush Saga now that it’s filed for an IPO, consider the impact of the FCC’s replacement net-neutrality rules and look at the real motivations behind the clamor for Google Fiber.
The Davids also look at the possible futures of both John Malone and Time Inc. after some very interesting news this week from both.
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There are 34 cities in the areas that Google is eyeing to build speedy fiber optic services like the ones it now offers in Kansas City, Austin, and Provo the company today says in a blog post. The potential expansion territories include Portland, OR; San Jose, CA; Salt Lake City; Phoenix; San Antonio; Nashville; Atlanta; and Charlotte and Raleigh-Durham, NC. ”We’ve long believed that the Internet’s next chapter will be built on gigabit speeds, so it’s fantastic to see this momentum” the company says about its request for proposals on how officials can “work with us to explore what it would take to bring them Google Fiber.” The company plans to announce by year end where it will build, working “closely with each city’s leaders on a joint planning process…These are such big jobs that advance planning goes a long way toward helping us stick to schedules and minimize disruption for residents.” Considerations include topography, housing density, and local infrastructure conditions as well as locations of existing conduit, water, gas and electricity lines or utility poles “so we don’t unnecessarily dig up streets or have to put up a new pole next to an existing one.” With its many Internet services, Google has a strong motivation to promote the development of a state-of-the-art infrastructure. Its efforts so far have already had a ripple effect, prompting cable operators … Read More »
Listen to (and share) Episode 32 of our audio podcast Deadline Big Media, as Deadline executive editor David Lieberman and host David Bloom discuss whether Netflix is about to take off or already has soared as high as it can; what to make of Apple’s massive stock buyback and dividend announcements; and disputes over whether Google Fiber is hurting Time Warner Cable and other competitors, even as Moody’s predicts heavy consolidation ahead for cable providers trying to lock down business clients.
Deadline Big Media, Episode 32 (MP3 format)
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“They have a glow about them,” Time Warner Cable CEO Glenn Britt told analysts this morning. But he sees the search company’s effort to expand its speedy fiber-optic broadband system to Austin — intensifying the competition with Time Warner Cable that began in Kansas City — as “no different” than other overbuilders that have failed to overtake cable operators. Execs say that there’s been a “de minimus” impact so far on Time Warner Cable. While Google Fiber is “very aggressive on price” its products are “essentially the same” as the cable company’s, Britt says. “The video’s the same and the speeds for the last part (of the broadband service) are faster but they connect to the same old Internet….I question the economics of this, and therefore their motivation.” He adds that Google has an “obvious public relations intent to depict the cable and phone industries as stuck with old technology.” But when it comes to business services, which need high Internet speeds more acutely than residential customers do, “we’re pulling tons of fiber.” Google’s “imagery painting is very effective, but not the reality.”
Related: Time Warner Cable Q1 Earnings Fall Shy Of Analysts’ Expectations
Listen to (and share) our audio podcast Deadline Big Media With David Lieberman as our executive editor and host David Bloom talk about broadcaster threats to abandon the airwaves for pay cable if Aereo wins; a gloomy Fitch’s report on the exhibition business just ahead of next week’s CinemaCon gathering in Las Vegas; and what ultrafast internet connections such as Google Fiber might mean for Hollywood.
Deadline Big Media, Episode 30 (MP3 format)
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UPDATE, 2:38 PM: AT&T says today that it, too, “is prepared to build” a speedy 1 gigabit per second broadband system in Austin. It expects the city to grant “the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives.” The investment shouldn’t have a big impact on AT&T’s capital expenditures this year, it says.
PREVIOUS, 12:59 PM: Google seems to like challenging Time Warner Cable. The companies already face off in Kansas City, where Google built its first super-fast fiber optic broadband and TV network. And today the search giant confirmed that in mid-2014 it will begin to enlist customers in a second Google Fiber market: Austin, where Time Warner Cable is the dominant TV provider. “It’s a mecca for creativity and entrepreneurialism, with thriving artistic and tech communities, as well as the University of Texas and its new medical research hospital,” Google says in a blog post. Time Warner Cable, for its part, says that “We already provide fiber-based multi-gig speed for many commercial customers throughout our service areas, and for consumers, we offer several tiers of residential service designed to fit almost any budget or household need. We’re prepared for added competition and believe that any innovation in broadband … Read More »
The No. 2 cable operator took it on the chin this morning after telling analysts in a conference call that rising programming costs and the lack of political ads will ding profits more than many expected. The stock is down 10% at mid-day. The disclosures inevitably led some to wonder whether Time Warner Cable contributed to its problems, at least in Southern California, by agreeing to pay hefty amounts to help create a regional sport channels that carries the Los Angeles Lakers and become a charter distributor for one for the Dodgers. CEO Glenn Britt says he had little choice. “We do not pretend that these deals are inexpensive or cheap,” he said. But sports is must-have programming, and the agreements “minimize and stabilize the cost over a long time period….In both cases these rights were up for auction and were going to be expensive no matter what happened.”
Related: Time Warner Cable Shares Fall After It Reports Mixed Q4 Performance
Execs say it’s too early to calculate the hit it will take in 2014 when the Dodgers’ SportsNet LA launches. The upshot, though, is that the vow Britt made last month to draw the line on rising programming costs will mostly affect small channels that few people watch — including Ovation, which the cable company ditched at year end. Britt renewed his commitment to “drop or re-position channels that don’t add to price-value.” Time Warner’s programming costs jumped 32% over the last four years, he says, while the Consumer Price Index rose 9%. Read More »
“I’m sorry for the scramble earlier today,” Google CEO Larry Page told analysts on a conference call. And that was that regarding the uproar today after the company’s earnings were prematurely released — resulting in a temporary halt in trading. Execs continued to cheer-lead, especially as they talked up progress in rolling out Android-powered devices. “Most people thought we were nuts” to develop the operating system, Page — whose voice is hoarse — said, adding that there are now a half-billion Android-powered devices. He’s also enthusiastic about Google TV, saying that “it’s great to have a real browser on your television” and that the company is “working hard to get distribution for YouTube, for Chrome and for the Internet as a whole on television screens. We’re very excited about that, we’re still in the early stages of that.” Page says that the company is “in the early stages” of rolling out Google Fiber — the state-of-the-art video and broadband service it recently introduced in Kansas City. “I’m excited about the user experience there.” Meanwhile YouTube “continues to grow like crazy,” he says. “The recent video with the horse dancing, Gangnam Style, has 500M views….If you’re the provider of content it’s an amazing thing.” Despite the execs’ abundant optimism, Google shares are up less than 1% in after-market trading.
Related: Google Resumes … Read More »
Welcome to the pay TV world, Google. The mighty search company startled a lot of people in cable when it announced its Google Fiber TV and Internet service in Kansas City. The fiber optic service, launched in July, offers consumers broadband speeds of 1 Gb per second, far faster than cable’s typical 5 Mb per second. How could cable and its allies fight that? Google provided a clue today in a letter disclosing what it told several FCC staffers yesterday: They discussed “the importance of being able to provide customers with access to must-have live regional sports programming and the difficulty of obtaining this programming.” Read More »
Bloomberg TV Asks FCC To Force Comcast Channel Placement
Bloomberg TV petitioned the FCC on Friday to force Comcast to immediately place the independent business news channel in the close numerical proximity to similar news services in 59 additional markets. The FCC back in May agreed with Bloomberg that Comcast needed to move its news channel into “news neighborhoods” to comply with a key condition of the NBCU takeover. That condition was meant to prevent Comcast from favoring its own news nets, such as MSNBC or CNBC, over independents. The FCC on August 14 stayed the order in some markets, and Bloomberg contends the stay allows Comcast to disregard the terms of the overall “neighborhooding” order.
Apple Didn’t Violate Samsung Patents, Trade Commission Judge Says
Apple did not violate four patents owned by Samsung Electronics in making the iPod touch, iPhone and iPad, a judge at the International Trade Commission said in a preliminary ruling on Friday. Apple and Samsumg have been embroiled in patent disputes in 10 countries. Apple won a landmark victory last month after a U.S. jury found the South Korean firm had copied key features of the iPhone and awarded Apple $1.05 billion in damages. Friday’s decision will be reviewed by the full commission in January.
Google Fiber Makes More Deals For Content Ahead Of K.C. Launch… Read More »
Google’s prototype fiber-delivered broadband service in Kansas City has struck a deal to carry NFL Networks and the a la carte RedZone channel (every touchdown from every Sunday afternoon game). This marks the second competing provider in a Time Warner Cable market to sign with the NFL services. Cincinnati Bell signed its fiber optic system last month. TWC and Bright House Network are the only major distributors that don’t carry the NFL Network. Registration for Google Fiber in Kansas City ends September 9 with installations presumably beginning the following day, according to Multichannel.com.