DTV

Who Won? CBS and Time Warner Cable Strike a Deal

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Monday afternoon, content owner CBS (click ticker for report: ) and cable provider Time Warner Cable (click ticker for report: ) came to an agreement over retransmission fees, allowing CBS programming to resume for Time Warner Cable customers. The battle lasted for nearly a month, and as we predicted, the upcoming NFL season spurred a deal. We noted that anger from consumers regarding the situation seemed relatively subdued, but that can change quickly when a fan cannot view a game. Unfortunately, no exact details of the agreement are available, so determining a winner and a loser becomes more difficult. However, commentary from the CEOs of both companies suggests the deal was more favorable for CBS than Time Warner. CBS made … Read more

Are You Ready for Some Football? Google Is.

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Digital news firm AllThingsD broke the story that Best Ideas Newsletter portfolio holding Google (click ticker for report: ) could be in talks with the NFL over exclusive rights for the NFL Sunday Ticket package, which allows consumers to view every NFL game. Another Best Idea portfolio holding, DirecTV (click ticker for report: ), currently holds exclusive rights for Sunday Ticket through the 2014 season, which costs the firm $1 billion annually. Why It Makes Sense for Google On the surface, such an idea seems interesting for Google. With the exclusive Sunday Ticket package, Google could really make a push into the TV business. Google could even pair the package with a purchase of the Google Chromecast, a portable online … Read more

What’s Going on in the Time Warner-CBS Battle?

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A few weeks ago, CBS (click ticker for report: ) and Time Warner Cable (click ticker for report: ) took their disagreement over carriage fees to another level, as both firms’ existing carriage fee agreement expired, effectively blacking out Time Warner subscribers from viewing the network. Since then, we’ve seen really no signs of the companies coming to any sort of agreement. The Federal Communications Commission (FCC) warned on August 9 that, if the two firms didn’t reach an agreement, the government could get involved and force a resolution. Such an event would be an incremental negative to CBS because we doubt the FCC would see a reason why consumers should be forced to pay more for a network they … Read more

A Content Standoff

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After a few days of threats and warnings, cable distributor Time Warner Cable (click ticker for report: ) dropped CBS (click for report: ) programming from its content offering as the two failed to reach an agreement on retransmission fees. Retransmission fees are charged by basic cable station owners (think CBS, NBC, and ABC) to distributors that wish to carry the content. Time Warner released a statement to its customers blaming CBS for outrageous demands. Current retransmission fees per subscriber hover around $1 a month, but rumors have suggested CBS would like to double this price. Time Warner believes that allowing the fee to double would set an unhealthy precedent, especially when considering that CBS is free via antenna TV.   … Read more

DirecTV’s “Miss” Mostly a Currency Issue

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Best Ideas Newsletter portfolio holding DirecTV (click ticker for report: ) reported strong second quarter results Thursday morning. Revenue increased 7% year-over-year to $7.7 billion, just a bit shy of consensus expectations. The disappointment in the period came from DirecTV Latin America, where revenue still advanced 12% year-over-year on a reported basis (constant currency revenue surged 26% year-over-year). Currency issues can be short-term headwinds, but we think the issues will even out in the long run. Earnings per share increased 8% year-over-year to $1.18, falling well short of consensus estimates. Again, we think this was largely due to currency issues. Free cash flow increased 15% year-over-year to $1.2 billion, equal to 15% of total revenues. In the US, revenue increased 5% … Read more

Could TV Get Competitive?

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Compounding worries that internet-based distribution will continue to eat away from traditional cable distributors, Intel (click ticker for report: ), DirecTV (click ticker for report: ), Time Warner Cable (click ticker for report: ), and Charter Communications (CHTR) are seeking deals to over-the-top (OTT) rights from programmers. This matters because OTT rights could give content distributors the ability to deliver TV shows via the internet rather than set-top boxes. If such a dynamic were to take hold, the TV business could become more competitive, as it would allow virtually every participant to offer services everywhere. Thus far, only Best Ideas Newsletter holding Intel has showed that it is serious about offering a broadband TV service, while the previously-mentioned companies are … Read more

DirecTV to Correct Overstated Subscriber Numbers

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Best Ideas Newsletter holding DirecTV (click ticker for report: ) announced Thursday that it had over-reported Latin American subscribers by approximately 100,000 accounts at the end of 2012. The error came from the 93%-owned Sky Brasil, which continued the practice into 2013, leading to subscribers being over-reported by 200,000 accounts at the end of the first quarter. Unfortunately, it appears these customers also received service without paying after the inflated accounts were improperly terminated. Needless to say, we’re not pleased with the artificial account inflation, which not only boosted raw subscriber numbers but also lowered churn. DirecTV anticipates churn will increase during the second quarter in Brazil, but it will have no impact on the rest of the business. The … Read more

Dish Won’t Go to War Over Clearwire; What’s Next?

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Late on Wednesday afternoon, news hit the tape that Dish Network (click ticker for report: ) would end its pursuit for Clearwire (CLWR), paving the way for Sprint (click ticker for report: ) to assume full control of the company for $5 per share (in line with our fair value estimate). Although we thought as well as the market thought (since shares of Clearwire were trading above the Sprint buyout price prior to the withdrawal) that Dish Chairman and founder Charlie Ergen would make a higher offer for Clearwire, Ergen may have known a bit more than he led onto during the bidding process, given that the FCC just approved draft rules for the auction of additional spectrum one day … Read more

Sprint May Be Settled But What About Clearwire?

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After a drawn-out saga, Dish Network (click ticker for report: ) dropped its pursuit of Sprint (click ticker for report: ) Friday. Sprint seems intent on accepting SoftBank’s offer, and we do not believe Dish could afford to offer more for the US’ third-largest wireless company. Yet, a dropped bid for Sprint does not mean Dish is out of the running for Clearwire (CLWR). On Thursday, Sprint raised its bid for Clearwire to $5 per share, a move valuing Clearwire at $14 billion (and something we had anticipated). Many may suspect that Dish’s decision to end its pursuit of Sprint as a declaration of peace, but we aren’t sure that is the case. Dish founder/chairman Charlie Ergen is well aware … Read more

Best Ideas Newsletter Holding DirecTV is on the Verge of Acquiring Hulu

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Key Takeaways: ·         Best Ideas Newsletter holding DirecTV could acquire Hulu in the ballpark of $1 billion. Though its earnings are undisclosed, we know Hulu posted $695 million in revenue in 2012, and people watched 24 billion minutes of entertainment on Hulu during the first quarter of 2012. ·         The acquisition keeps Hulu out of the hands of competitors. It also keeps Hulu out of the hands of companies that may want to enter the content distribution business. ·         The cord cutting trend is overblown, but we think Hulu is a nice hedge against cord cutting. We also think Hulu rounds out DirecTV’s TV Everywhere package. ·         Content costs could come down, and DirecTV is well positioned to benefit. We … Read more