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CBS Blackout on Time Warner Cable May Last Until N.F.L. Season

August 15, 2013 by

That would mean three more weeks without CBS programming for the cable subscribers. The contract dispute is approaching the two-week mark with no hint of an imminent settlement.

“I really think these guys are going to need the N.F.L. to add a sense of urgency to this,” said David Bank, a media analyst with RBC Capital Markets.

Neither side in the standoff has mentioned any progress over the last several days. Both have continued to level charges and accusations of blame for Time Warner Cable’s decision to remove CBS’s stations in areas the cable company covers, which include subscribers in New York, Los Angeles and Dallas.

The issue centers on fees that cable companies are obligated to pay to broadcast stations for the right to retransmit them on their cable systems. CBS has asked for a substantial increase, widely estimated at a $1 per subscriber raise. Time Warner Cable has declared the demands exorbitant.

But the focus of the dispute is now additional rights to packages of programming that CBS sells to on-demand subscription video services like Netflix and Amazon. Time Warner Cable wants to gain access to that content; CBS insists it would mean Time Warner Cable was getting for free something it sells for hundreds of millions of dollars to on-demand services.

The only action on the conflict taking place in recent days has involved parties outside the negotiations. Three residents in Southern California filed a class-action suit against Time Warner Cable on Wednesday saying the plaintiffs would not have signed up with the operator had they known programming would be denied to them.

Several politicians including both California senators have urged the Federal Communications Commission to step in, but the agency’s avenues of input are limited. If either side makes a complaint of bad-faith negotiating, the F.C.C. could potentially intercede but neither side has made such a complaint.

While representatives of both sides have said the negotiations continue, no one is predicting the end is in sight.

The N.F.L. season has been cited frequently as the bridge too far because of expected vociferous protests from customers missing games. The cable operator acknowledged at the start of the blackout that it was removing the CBS stations well ahead of the football season because it would lose leverage in the talks once the season began.

But Mr. Bank said the lack of progress thus far points to the need for the N.F.L. season to provide a deadline to generate movement. “We’re going to follow this like a ping-pong game,” he said, but added, “I would think now that it’s going to take another several weeks.”

Article source: http://www.nytimes.com/2013/08/16/business/media/cbs-blackout-on-time-warner-cable-may-last-until-nfl-season.html?partner=rss&emc=rss

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Bits Blog: AT&T Will Buy Some Verizon Spectrum for $1.9 Billion

January 25, 2013 by Leave a Comment

ATT said on Friday that it had agreed to buy some spectrum — the radio waves that carry wireless calls and data — from its main competitor, Verizon Wireless.

ATT said it would pay $1.9 billion for spectrum licenses that would cover 42 million people across 18 states, including California, Colorado, Florida, New York and Virginia. The deal is subject to regulatory approval.

In the wireless industry, this sale was widely expected. In late 2011, Verizon said it had agreed to buy licenses for spectrum from a consortium of cable companies. The Federal Communications Commission demanded clarity from Verizon on what it was doing with some of its leftover spectrum. Verizon later agreed that it would sell some spectrum in order to get approval for the deal with the cable companies.

The spectrum in question is in the 700 megahertz frequency. ATT’s network already has a high concentration of 700 megahertz spectrum, so naturally the carrier was interested in the purchase. In past investor calls, ATT had said it was interested in buying Verizon’s spectrum.

Craig Moffett, an analyst with Sanford C. Bernstein Company, said the transaction had few implications for consumers.

“What we’re witnessing is the horse trading of spectrum bands so all the carriers can rationalize their holdings,” Mr. Moffett said in an interview. But he noted that “more spectrum always tilts the scales in favor of better service.”

ATT has said it will use the additional spectrum to expand its fourth-generation LTE network, which is faster than its predecessor, 3G. Currently it has LTE deployed in about 135 cities, far behind Verizon, which has LTE in 476 cities.

Article source: http://bits.blogs.nytimes.com/2013/01/25/att-will-buy-some-verizon-spectrum-for-1-9-billion/?partner=rss&emc=rss

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TV Stations Scramble for Shows to Fill N.B.A. Spots

November 16, 2011 by Leave a Comment

“We’re about to go into the nuclear winter of the N.B.A.,” David Stern, the league’s commissioner, told ESPN on Monday after the players rejected the latest offer and moved to dissolve their union.

Big media companies are likely to feel the chill, with months of empty television time that would typically be filled with N.B.A. games. ESPN and ABC, owned by the Walt Disney Company, and Time Warner’s Turner Sports pay a combined $1 billion a season for the rights to games. The N.B.A. drives ratings in the coveted 18- to 34-year-old male demographic that advertisers pay a premium to reach. And it gives cable networks leverage in negotiating carriage fees, or the price cable companies pay in order to offer subscribers a network.

The N.B.A. said on Tuesday that at the end of the current season it would discuss repayment to networks for fees associated with canceled games. If the entire season is wiped out, the league could add an additional year to Turner and Disney’s contract, which runs through the 2016 season.

Last season, from October 2010 to June 2011, marketers spent $806 million to advertise during games, with 53 percent of those dollars spent during the playoffs, according to Kantar Media, a division of WPP.

John K. Martin, Time Warner’s chief financial officer, said in an earnings call this month that a drop in ad revenue would be “relatively immaterial” because it would be offset by a reduction in rights costs.

But in addition to ratings and ad revenue, N.B.A. games provide valuable marketing cachet and help promote other shows. For example, TNT promoted its original series “Rizzoli Isles” during last spring’s playoffs.

ESPN will offer marketers time during other live sporting events, when viewers are less likely to skip commercials using digital recording devices. “We are working closely with our advertisers and are prepared to re-express dollars currently committed to the N.B.A. to other properties,” Nate Smeltz, an ESPN spokesman, said.

For now, TNT has replaced N.B.A. games with episodes of “C.S.I: NY.” Marketers will have the chance to advertise on shows on sister networks that reach similar demographics like TBS, Adult Swim or reality shows on TruTV, the network said.

Those lower-rated alternatives will appease advertisers only in the short term, said Brad Adgate, senior vice president for research at Horizon Media, a media buying firm. Last season, a playoff game on TNT between the Chicago Bulls and the Miami Heat drew 11.1 million viewers, compared with an overall nightly average of 1.3 million, according to Nielsen. “There’s no substitute for live sports,” Mr. Adgate said.

The lockout could have a disproportionate impact on regional sports networks that rely on a hometown team’s games to bring in viewers and local advertisers. The MSG network, owned by the Madison Square Garden Company, typically has Knicks games three nights a week. It will now rely on shows that mix archival Knicks games with player interviews. MSG will still have live National Hockey League games.

Instead of New Jersey Nets games, Yankees Entertainment and Sports, known as the YES network, will have “Yankees Baseball Daily,” an off-season news and analysis show, five nights a week, and live college basketball games.

Networks braced for further N.B.A. delays after players said Monday they had rejected the league’s latest offer. Had they reached agreement, a 72-game season would have started on Dec. 15. A 204-day lockout in the 1998-99 season led to a truncated 50-game season and the cancellation of the All-Star Game. Television networks largely made up for the missed games by charging advertisers a premium for end-of-season and playoff games.

Some were still holding out hope that the season, and valuable television programming, would not be totally lost. “We believe in the strength of the N.B.A. brand and hope for an outcome that preserves as much of the 2011-2012 season as possible,” David Levy, president of sales, distribution and sports for the Turner Broadcasting System, said.

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F.C.C. and Cable Companies Push to Close Digital Divide

November 9, 2011 by Leave a Comment

On Wednesday, the F.C.C. will announce commitments from most of the big cable companies in the United States to supply access for $9.99 a month to a subset of low-income households. The low introductory price is meant to appeal to new customers who have not had broadband in the past.

The F.C.C. is billing the initiative as the biggest effort ever to help close the digital divide. Because no federal funds are being invested, the initiative relies in large part on the cooperation of private companies. One such company, Comcast, started offering $9.99 monthly broadband service to some low-income households this year after promising the F.C.C. that it would do so when it acquired control of NBCUniversal.

By enlisting the cable companies as well as a wide range of nonprofit groups that will educate eligible families about the low-cost access, “we can make a real dent in the broadband adoption gap,” Julius Genachowski, the F.C.C. chairman, said in a telephone interview Tuesday.

Mr. Genachowski has made broadband deployment and adoption the top priority of his tenure at the F.C.C. The government estimates that about one-third of American households, or 100 million people, do not have high-speed Internet access at home. Some of those homes simply do not have access to service, but most do and choose not to receive it, for reasons involving cost and perceived relevance to their lives.

To address the first point, along with the low monthly price, a technology company will supply refurbished computers for low-income households for $150; Microsoft will provide software; and Morgan Stanley will help develop a microcredit program so that families can pay for those computers.

To address the second point, job Web sites and education companies will offer content that will, in theory, make online access more valuable.

Eligibility will be limited to those households that have a child enrolled in the national school lunch program and that are not current or recent broadband subscribers. About 17.5 million children are enrolled in the school lunch program. That limitation is likely to disappoint advocates who would like more affordable access extended to all households.

For those households, the $9.99 monthly price will apply only for a two-year period. The price is akin to an on-ramp for new customers, with the hope being that they will decide to pay more for access once they have had it for a while.

The F.C.C. said the initiative would begin in the spring and reach all parts of the country in September 2012. It is similar in some ways to Adoption Plus, a partnership that was proposed two years ago, but never carried out, by the National Cable Telecommunications Association, a cable trade group.

The participating cable companies — including almost all of the biggest ones in the country, like Time Warner Cable, Cox and Charter — are not expected to sustain a significant financial loss. Broadband service normally has a high markup, and the $9.99 price will more than cover the overhead costs of providing monthly Internet service.

The announcement on Wednesday will not include two companies that are major players in the broadband business, Verizon and ATT. The F.C.C. is reviewing ATT’s proposed acquisition of T-Mobile.

Asked why the cable companies were willing to participate, Mr. Genachowski said he thought they “looked at this and said, this is an important national challenge, let’s be part of the solution.”

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Apple May Be Aiming to Makeover TV Next

October 7, 2011 by Leave a Comment

Under Mr. Jobs, Apple dipped its toe only slightly into the television business with Apple TV, a set-top box for accessing Internet video. That product has been one of the rare disappointments in its lineup, especially when compared with smashes like the iPhone and iPad.

But many in the tech industry contend that television is ripe for technological makeover, and that the next big challenge for Apple, after the death of Mr. Jobs, is likely to be in that area.

“It’s the big area they haven’t colonized,” said James McQuivey, an analyst at Forrester Research. “It’s the thing we spend more of our time on than sleep.” 

In the meantime, companies like Microsoft have started to take a stronger leadership role in helping to push the technology of television forward, as Apple did in areas like music and mobile phones.

Television is such a tantalizing target in part because people spend so many hours watching it, but also because the industry over all has been slow to innovate except perhaps in making screens larger. In particular, the consuming public is still waiting for television content — everything that people watch — to be delivered over the Internet in a convenient, affordable package on all the devices people are now using.

One big reason for Apple’s failure to gain traction in television is that Apple TV has not had a compelling source of television and movie content that allows the product to stand out. Although the company’s iTunes store is stocked with many popular shows like “Glee” and “Sons of Anarchy,” network and movie studio executives have hesitated to make all of their content widely available at attractive prices, in large part over concerns about angering cable companies, a big source of their revenue, and their pipeline into living rooms.

In August, Apple discontinued an iTunes rental service that allowed viewers to rent television episodes for 99 cents through the store for watching on devices like Apple TV, saying that consumers were not as interested in renting episodes as in buying them.

Last year, talks between Apple and television executives, including NBCUniversal, Viacom and Discovery, stalled over a plan to license their programs for an Internet subscription service akin to Netflix and Hulu Plus, according to executives briefed on talks.

The cold shoulder to Apple from television executives is a stark contrast to the success Mr. Jobs had in wooing the music companies when the iTunes Store was begun eight years ago. At the time, Mr. Jobs used his personal charisma to persuade record executives to let Apple sell songs for 99 cents each through iTunes. It also helped him that the iPod hadn’t yet turned into a blockbuster product.

The subsequent explosion in sales of 99-cent digital singles on iTunes further eroded compact disc sales, many music executives say. Television executives were determined to avoid the same experience. “It didn’t work in TV and movies precisely because it did in music,” said Mr. McQuivey of Forrester Research.

Mr. Jobs himself often downplayed Apple TV’s impact on the market. While he used lofty words like “magical” to describe the iPad, Mr. Jobs on more than one occasion referred to the $99 Apple TV as a “hobby” for Apple because of its lackluster sales. Analysts estimate the company has sold about two million of the devices. It has sold nearly 29 million iPads since the product was introduced in the spring of 2010.

In an on-stage interview last year at the D: All Things Digital conference, Mr. Jobs further expounded on his pessimism about the market by saying that it was hard to sell innovative television devices like Apple TV to consumers, when cable companies give their customers a set-top box for little or no cost upfront. “That pretty much squashes any opportunity for innovation because nobody’s willing to buy a set-top box,” he said.

In the meantime, one of Apple’s rivals, Microsoft, announced a major new push into the television business on Wednesday, before the announcement of Mr. Jobs’s death. The company said it was entering a partnership with nearly 40 television providers, including Bravo, Comcast, HBO and Verizon FiOS, that will allow the 35 million members of its Xbox Live online service to watch mainstream cable programming through Microsoft’s game console.

Article source: http://feeds.nytimes.com/click.phdo?i=fb8492915959e2b5b38d6c7c3263690a

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Time Warner Cable Is Said to Acquire Midwest Cable Operator

August 15, 2011 by Leave a Comment

Time Warner Cable, the second biggest cable television company in the United States after Comcast, is near a deal to acquire Insight Communications, a large operator in the Midwest, for about $3 billion, a person with knowledge of the deal said on Sunday night.

It would be Time Warner Cable’s biggest acquisition since 2006, when it and Comcast picked up the assets of Adelphia, a bankrupt cable television company.

The deal is expected to be announced on Monday, said this person, who spoke on the condition of anonymity because the deal had not been made public.

The acquisition highlights Time Warner Cable’s confidence in the cable subscription business at a time when cable companies are losing customers to telecommunications companies like Verizon, and when other customers are contemplating cutting the cord and consuming video online instead.

Insight provides cable, broadband and phone services in Indiana, Kentucky and Ohio. Some of its locations complement Time Warner Cable’s operations; the two serve different parts of Columbus, Ohio, for example.

Time Warner Cable has about 12 million cable customers. The deal for Insight, the ninth largest cable operator in the country, will give Time Warner Cable an additional 680,000 cable customers.

A representative for Time Warner Cable declined to comment on Sunday night, while representatives for Insight did not respond to requests for comment. The impending deal was first reported by Bloomberg News.

Insight is owned by the Carlyle Group and other private equity firms.

When it was put up for sale this year, its owners sought $3.5 billion to $4 billion; Time Warner Cable was said to be unwilling to pay that much for the company. A spokesman for Carlyle declined to comment on Sunday.

In June, Time Warner Cable paid $260 million to acquire assets from NewWave Communications, a cable company based in Missouri with 70,000 cable subscribers. On a conference call with Wall Street analysts last month, the Time Warner Cable chief executive, Glenn Britt, said the company was “interested in extending our cable footprint” when “we can do so at the right price.”

Michael J. de la Merced contributed reporting.

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Dispute Over Time Warner Cable’s Streaming to iPad Bursts Into the Open

March 29, 2011 by Leave a Comment

That question has divided the television industry in recent weeks, ever since Time Warner Cable started streaming several dozen TV channels to customers’ iPads. Immediately, channel owners like Viacom and Scripps Networks seized on the streaming capability as a contract violation — in part because they want cable companies to pay them more for the privilege to stream.

Legal threats were made last week, and the dispute was brought into public view on Monday when Time Warner Cable introduced a Web campaign that promoted “more freedom to watch on more screens” and asked, “Why do some TV networks want to take it away?” The television industry is, in effect, joining book publishers in being unsettled by the iPad and the new era of tablets. There is little doubt that people will be watching more TV on tablets in the future. (Imagine a son watching “SpongeBob SquarePants” on an iPad while his father watches basketball on the big-screen TV.)

What is undetermined is whether people will be watching through an application provided by their cable company, an individual channel’s app, or through a paid service like Netflix.

To stream programs from Time Warner Cable, customers download an iPad app through the Apple iTunes store, log in to verify their account, and choose from a selection of live channels like CNN and Comedy Central. The iPad app only works inside the home, and only for customers who receive both television and Internet from the operator.

Other cable television operators say they are coming out with their own streaming apps soon. Cablevision’s app could come out this week.

But some channel owners say that companies like Time Warner Cable should be consulting with them more closely before introducing new products. “Portability is a different business proposition,” said an executive at one of the major channel owners, suggesting that there should be a premium paid for the ability to take a TV show into bed or into the bathtub. One commercial for Time Warner Cable’s app actually shows a person watching TV on a tablet while taking a bath.

The executive said Time Warner Cable should have “worked out the business issues” with channel owners before coming out with the app. The chief issue is counting the audience: another executive said there had been a “stampede” of channel owners asking the Nielsen Company to include iPad streaming in its ratings of programs.

The channel executives spoke only on condition of anonymity because their parent companies had refused to comment on the dispute.

But Scripps, the owner of HGTV and the Food Network, said earlier this month that it “has not granted iPad video streaming rights to any distributor and is actively addressing any misunderstandings on this issue.”

Melinda Witmer, an executive vice president at Time Warner Cable, said in an interview last week that she thought the current dispute was “fundamentally about money and leverage,” not about the language of contracts. “I already bought these rights,” she said.

Ms. Witmer compared the complaints of channel owners to a person who waves a gun around and winds up shooting themselves in the foot. For distributors that depend on monthly subscription checks from customers, new products like iPad apps are ways to keep the payments coming — and that revenue, of course, is ultimately shared with the channel owners.

Some channel executives said Viacom, the owner of MTV, VH1 and other channels, is taking the most aggressive stance against the streaming app. One of the complaints is that the app now includes only a portion of all the channels that are available through the traditional set-top box. Time Warner Cable is offering 32 channels for the iPad.

Cablevision is expected to change that. Its app will transplant every existing channel and video-on-demand option to the iPad, literally making it into a TV set. The company declined to comment Monday.

Verizon and Comcast have said that they were also working on streaming apps for iPads. But for now, the Time Warner Cable skirmish may make other cable companies or distributors think twice about replicating TV on tablets. Comcast, for instance, has not added live streaming to its iPad app yet; instead, it has focused on adding on-demand programming.

Comcast is the nation’s largest cable company; Time Warner Cable is No. 2.

The cable distributors have trod lightly into an area that will most likely prompt more fighting with channel owners: out-of-home viewing by customers.

Not every channel owner is arguing against the streaming notion, however. Time Warner, which was separated from Time Warner Cable two years ago, is comfortable with the current app, and its recent contract renegotiation with Comcast specifically included tablet streaming rights.

Ms. Witmer of Time Warner Cable said she thought some of the resistance by channel owners stemmed from a lack of understanding of the technology. “In fairness, truthfully, to all the executives in this industry that are trying to run businesses that are part of this ecosystem, it is exhausting — exhausting — keeping up with everything that is changing rapidly,” she said.

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