Discovery Communications is increasing its piece of the OWN: Oprah Winfrey Network joint venture with Winfrey's Harpo, the programmer said Monday. Discovery said it's paying $70 million for an additional 24.5 percent, which would give it more than 70 percent. It said Winfrey will remain CEO, with her exclusivity commitment to the network extended through 2025.
Cable is facing "increasing headwinds" in the form of more video competition, slowing broadband growth, their balance sheets and more-uncertain merger and acquisitions permutations, Barclays analyst Kannan Venkateshwar wrote investors Monday, downgrading the cable and DBS industry to neutral, and Charter Communications to underweight. He said Charter faces high programming cost growth and wireless launch costs atop its reluctance to raise broadband prices. Charter didn't comment.
The Communications Workers of America is urging all states' attorneys general not to sign onto DOJ's lawsuit seeking to block AT&T buying Time Warner (see 1711200064). The union on Saturday tweeted that President Chris Shelton was in the process of reaching out to them. CWA told us Monday it expects to talk with all of them within the next several days. In a letter from the union to the AGs dated Nov. 22, Shelton chalked up the DOJ litigation to political interference from the Trump White House due to the administration's CNN enmity. Justice didn't comment Monday.
Comments are due Jan. 16 on a Copyright Office NPRM on an update of rules for cable operators' royalty reporting practices, the Copyright Office said Friday. It said it's proposing a variety of changes to the statement of account forms, including greater specificity of subscriber and rate information requested and a requirement covered cable systems pay a separate per-telecast royalty atop other royalties that cable systems must pay under Section 111 of the Copyright Act.
Pay-TV subscribers increasingly are getting at subscribed content via connected TVs, opting to be self-aggregators rather than go through pay-TV operator aggregation, nScreenMedia said Wednesday. Use of streaming media players is coming at the expense of mobile devices and PCs, it said, saying "a small but significant group" of pay-TV watchers is avoiding operator-provided set-top boxes altogether for programmer and operator TV Everywhere apps on connected TV platforms.
More than half of U.S. households subscribing to over-the-top video services pay for more than one service, Parks reported Thursday. Of the households with multiple subscriptions, 81 percent use Netflix plus another service, typically Amazon or Hulu, and the average number of subscriptions per household is rising, said analyst Brett Sappington. “Video services do not necessarily have to displace a Netflix” or another heavyweight service to gain market share, Sappington said. “Services can potentially find success as a complementary offering." Sappington said consumers who pay for OTT services are more likely than nonsubscribers to watch free online video services, and the more OTT video subscriptions consumers have, the more likely they are to use free or “freemium” video services that offer different service tiers. Some 30 percent of households with one subscription service use at least one free, ad-supported online video service. The ratio jumps to 47 percent for households subscribing to three premium services and to 63 percent for households subscribing to five or more services.
The American Cable Association will petition for reconsideration of the ATSC 3.0 order if broadcasters put undue pressure on small cable operators to carry the standard, ACA said in docket 16-142, posted Tuesday. Such petitions can be submitted within 30 days of the order's publication in the Federal Register, and many ACA members will be negotiating retransmission consent deals in the next month, the group said. It cited Commissioner Mike O'Rielly's warning at commissioners' November meeting he would be watching for examples of possible violations of good-faith rules for 3.0 carriage. "Should broadcasters insist on ATSC 3.0 carriage in their negotiations with ACA members, the 'concrete examples' of which Commissioner O'Rielly spoke may become available sooner rather than later," ACA said. "We hope, however, that broadcasters will show some measure of restraint."
MGM's Epix will be available via Comcast's X1 platform early next year under a distribution agreement they announced Tuesday.
DOJ's case against AT&T's buy of Time Warner is backed by only speculation and out-of-context statements, telecom consultant Jonathan Lee blogged Monday. He said the case (see 1711210005) has numerous "unsupported" assumptions that New AT&T could profitably raise TW programming prices; that blackouts are always worse for MVPDs than for programmers; that New AT&T will be well insulated from the threat of a rival MVPD not carrying TW content because it would pick up some defecting customers; and that New AT&T could profitably charge its own retail customers more.
Vertical mergers are nearly always pro-competitive and pro-consumer, result in lower consumer pricing or better products, and no loss of competitors in the market, R Street blogged Wednesday, calling DOJ's case against AT&T's buy of Time Warner (see 1711200064) "weak." It said negotiations about merger conditions likely will continue in coming weeks. A "targeted" behavioral condition covering the licensing of TW content to competing online video distributors like Sling TV "may be enough to grease the wheels and get this merger over the line," it said, but it's not clear if AT&T would accept such conditions or try to get court approval of the buy without any conditions. Many antitrust experts said the DOJ doesn't face easy success (see 1711210005). DOJ has a strong case, given the growing bipartisan view that behavioral conditions are problematic, Cleveland State University law professor Chris Sagers blogged Tuesday. Federal agencies frequently put conditions on vertical mergers, he said, saying the size of the deal -- one of the largest in history -- is also important. It could help the DOJ that the case has been assigned to U.S. District Judge Richard Leon, whose opinion in the Tunney Act proceedings in the Comcast/NBCUniversal merger (see 1109020106) "was modestly strongly worded," and who ordered the government's requested relief "be toughened up in a few respects." Separately, Technology Policy Institute President Emeritus Thomas Lenard, in a column Wednesday in RealClearPolicy, said AT&T likely went into the TW deal thinking it could negotiate conditions similar to those put on Comcast/NBCUniversal. But the antitrust division, with its suit, is making clear it doesn't favor such conditions in AT&T/TW, Lenard said. Divestitures have costs, such as destroying some of the value and efficiencies the parties hoped to get from the deal, plus their disruption, he said, saying the facts of the case will determine whether structural or behavioral remedies are best. In a tweet Tuesday, telecom consultant Jonathan Lee waved off the DOJ's argument that TW-owned sports content like NBA, MLB and NCAA games are must-have content, citing Charter Communications and SportsNet LA and its challenges getting carriage on MVPDs. The DOJ complaint ignores the travails the legacy media sector faces from cord cutting to ad dollars shifting online and the hope M&A represented, BTIG Research Analyst Rich Greenfield wrote Wednesday. He also said DOJ arguments Turner content is must-have is questionable. And he said it was surprising the complaint didn't have clear examples of Comcast/NBCU consent decree failures or the economic harms inflicted on consumers, since DOJ presumably will need to show that deal hurt competitors and consumers and that the larger AT&T/TW deal carries larger potential hurts.