The wheels are in motion for that to happen, Bloomberg reports. Intel wants about $500M for OnCue, its ambitious initiative to offer a cable-like service via the Web. Samsung and Liberty Global have kicked the tires. But Verizon‘s said to be already out talking to broadcast and cable channels about possible carriage terms, according to the news service’s unnamed sources. The big question: Would Verizon need new contracts for an online service, or could it just tweak the current programming agreements that apply to territories where it offers FiOS TV? If Verizon proceeds, then it theoretically could compete with cable and satellite companies across the country. Before Intel decided to unload OnCue, it hoped to create a subscription service that would work with its own interactive set top boxes. But it was unable to persuade network owners to let it provide individual channels — not just the bundles offered by cable and satellite — even though it offered a premium over the fees that conventional distributors pay. Some programmers privately doubted that Intel could guarantee them a quality signal over the Internet, and noted that Nielsen initially wouldn’t be able to measure viewership via its non-traditional set top boxes.
This could come as a helmet to the ribs of the uber-lucrative NFL broadcasting-streaming game and the notion of sponsorship vs. rights deals. Not to mention possibly expanding the broader sports world’s ever-growing “TV everywhere” game plan. Verizon today finalized a $1B extension of its deal with America’s dominant sports league that – beginning with the 2014 season — will allow streaming of all CBS and Fox in-market Sunday afternoon games to mobile phones (regular blackout rules apply). Not only that, but the deal comprises all NFL playoff games, including the Super Bowl. The four-year agreement expands Verizon’s current NFL Mobile package, which gives access only to games on airing on NBC, ESPN and the NFL Network – read Monday, Sunday, and Thursday night football – along with the league-owned NFL Network and its NFL RedZone.
Verizon’s billion (with-a-B)-dollar deal makes the wireless giant one of the NFL’s biggest business partners outside of its media-rights holders. It marks a significant increase over Verizon’s previous NFL pact: Sports Business Daily says the company had been ponying up about $50M a year to the NFL since 2010 — including rights fees, team spend commitments and media spending on NFL media partners – but will make a $210M payment in the just Year 1 of the new deal. A potential hitch is that the new agreement includes access to games only on mobile phones, which certainly should give rise to a kerfuffle about exactly what defines a “mobile phone” in the age of tablets and Galaxy IIIs and such.
It isn’t a la carte but Verizon’s proposal to tie what it pays to carry TV channels to the number of viewers who actually watch is what big media companies might consider “disruptive”, according to the Wall Street Journal. Verizon’s FiOS TV is the nation’s sixth-largest pay-TV provider and has begun negotiations with some smaller companies about basing what Verizon pays on audience size. Under the established industry model, cable and satellite operators pay a monthly per-subscriber fee to carry channels based on the number of homes the channels are available. Verizon’s chief programming negotiator Terry Denson suggests that in many cases “We are paying for a customer who never goes to the channel”.
A coalition of broadcasters, wireless providers, and chip makers Thursday urged the FCC to adopt guidelines to minimize potential conflict between broadcasters and wireless companies as the agency strives to cope with rising stress on bandwidth. Because of ever-increasing …
We still don’t have a firm start date, although the joint venture between Redbox and Verizon says that consumers will be able to subscribe to a “beta product” sometime this month. Redbox Instant by Verizon‘s streaming service will cost a penny more than Netflix and will include four, one-night credits each month to rent DVDs at Redbox kiosks. For an additional dollar a month, customers can use the credits to rent Blu-ray discs. We still know little about the streaming content — Warner Bros is the only studio that has publicly said it will participate. But Redbox Instant says its new deal with EPIX will enable it to offer Paramount, Lionsgate, and MGM movies 90 days after they appear on EPIX’s pay TV channel. The venture also will sell and rent digital versions of new movies from Lionsgate, NBCUniversal, Paramount, Relativity and Sony Pictures Home Entertainment. The web-based service will work with mobile devices powered by iOS and Android operating systems as well as Samsung Blu-ray Players and TVs with SmartHub, LG Smart TV and Blu-ray Players, and Google TV. Here’s today’s release:
That’s one of the details disclosed by web site GigaOm, which found a help page for people beta testing the streaming service that’s due to launch next month — with hopes to challenge Netfllix and Amazon …
CFO Fran Shammo had little to say to analysts this morning about Verizon‘s planned video streaming service with Redbox, aside from the fact that it’s “very close to launching” this quarter and should improve his company’s profits next year. Still, Verizon investors seem content with the company’s direction after it delivered solid Q3 results. The share price is up 1.4% in early trading after Verizon reported net income of $4.3B, +21.2% vs the same period last year, on revenues of $29B, +3.9%. The revenue figure exactly matched Wall Street’s consensus forecast. So did earnings per share, which came in at 64 cents not including charges tied to its payments to TiVo to settle its patent infringement case against the communications giant. The FiOS video business continued to slow: Subscriptions rose just 2.7% vs Q2 to 4.6M. The increase of 119,000 customers fell short of Wall Street’s expectation for 142,000. The company’s FiOS broadband unit also missed analyst targets. It ended up with nearly 5.3M customers, +136,000 vs the consensus forecast of +165,000. “The read-across for cable and satellite incumbents is self-evidently positive; lower growth for FiOS means smaller losses for their competitors,” Bernstein Research’s Craig Moffett says.
TiVo‘s stock led the media pack yesterday, up nearly 4% after it announced that it will collect $250M from Verizon to settle their patent infringement dispute. And today it’s still on top, up about 3% to …
TiVo shares were up about 10% in pre-market trading immediately following the announcement. The deal ends a bitter legal fight that began in 2009 and was scheduled to go to trial October 1. It ensures that Verizon FiOS customers can continue to use the company-supplied DVRs, which are manufactured by Cisco. In addition, the companies say that they’re looking at arrangements to collaborate — including by offering TiVo users content from the planned Redbox Instant By Verizon streaming video service. TiVo will collect about $100M “as consideration for past damages,” and recognize some of that in the current quarter, it says in an SEC filing. The settlement also resolves Verizon‘s countersuit against TiVo. The companies say they’ve “entered into a cross license of their respective patent portfolios in the advanced television field.”
Consumer advocates say that this pretty much ends prospects that cable and phone companies will vigorously compete in wired and wireless broadband. But government officials believe they extracted enough compromises from the companies to resolve antitrust concerns and protect the public interest. The Justice Department filed a consent decree to let Verizon pay close to $4B to a consortium of cable companies led by Comcast for some airwave spectrum they control, as the erstwhile competitors also strike a series of agreements to develop products and cross-market each other’s services. The FCC also is teed up to endorse the deal; Chairman Julius Genachowski said he will circulate an order based on the consent decree to be approved by the full commission.
Comcast was careful to hide the price of its new Xfinity Platnum Internet service — which offers download speeds of up to 305 Mbps and upload speeds of 65 Mbps — in its press release today. But the company …
Dish Network Loses Fewer Subs Than Expected In Q2.
Dish Network shares are up 1.8% at midday after it disclosed better-than-expected subscriber numbers for the quarter that ended in June. In a press release announcing plans for a debt offering, the satellite company said it wound up with 14.06M customers: That’s down by 10,000 from the previous quarter, with an average monthly churn rate of 1.60%. Wells Fargo analyst Marci Ryvicker says she projected a loss of 119,000 subs and a 1.65% churn rate.
The letter from 32 House Democrats to FCC chairman Julius Genachowski and Attorney General Eric Holder comes as the two agencies head into the home stretch of their review of Verizon‘s nearly $4B deal to buy wireless spectrum from Comcast and other cable companies — and cross-market each other’s services. The FCC is expected to approve it, but the Justice Department remains concerned that it might result in rate hikes, Reuters reports. The FCC declined Friday to grant a critic of the deal, Public Knowledge, additional time to comment on it. The letter today from the House Democrats says that the Verizon-cable deal would “appear to turn the promise of the 1996 Telecommunications Act on its head.” When the law wiped away many cable regulations, “consumers were promised the benefits of increased competition between cable and phone companies, driving investment in broadband networks, creating jobs, enabling new and improved services and applications, and lower prices.” But Verizon’s deal with cable “would eliminate or reduce cross-platform competition and diminish incentives to expand FiOS deployment. This would leave many of the communities that we represent on the wrong side of the digital divide.” The companies have told Congress that the new arrangement would help the companies to create broadband services without diminishing competition. “There’s nothing in these transactions that will stop us from trying to beat the brains out of FiOS,” Comcast EVP David Cohen said in March. Here’s today’s letter:
UPDATE, 6:45 AM: CFO Fran Shammo, the only Verizon exec on today’s call with analysts, blasted commentators who said yesterday that the telecom giant was forced announce that it will auction off some of its airwave spectrum — if the government approves its deal to buy licenses held by Comcast and other cable companies. “This is nothing near a fire sale,” he says. If Verizon doesn’t like the offers it receives “then we won’t go through with the sale.” He also denied charges that the company was forced to sell the spectrum “because we ran into a roadblock at the FCC,” which — along with the Justice Department — must approve the cable deal in order for it to close. “We’re being good stewards” of the publicly owned airwaves, he said. Most of the questions dealt with Verizon’s growing smartphone and wireless data business. The company says it now offers its speedy 4G LTE service in 230 markets, about two-thirds of the country. About 9.1% of its wireless customers have 4G devices, up from 0.6% a year ago. While Shammo steered clear of specifics about the earnings hit Verizon takes for subsidizing iPhones, he says that the company is supporting Microsoft’s effort to build what he called “a third ecosystem” for Windows-powered mobile devices in addition to Apple’s iPhones and Google’s Android systems. He’s bullish about tablet sales: Verizon sold 390,000 in Q1, up 60% vs the same period last year, but probably can improve on that. There was a slowdown in anticipation of the roll out of the new iPad, which was only available for two weeks in the period.