Is Vivendi A Content Buyer?

With all the talk of media mergers, Reuters thinks that Vivendi might just be the company to start acquiring content companies in order to become a major media player.  "Bankers are honing pitches to buy U.S.-based TV companies like AMC, Starz, and Scripps Network Interactive, or a movie studio such as Lionsgate, said two of the people."    Of course any potential of a deal could ramp up conversations by other US players to prepare their own competitive bids.  This summer could be the start of such announcements.

Aereo Decision Could Come Within Two Weeks

The Supreme Court of the United States has certainly had some time to review their notes and deliver a decision. Can Aereo continue its business model or do the broadcasters have the right to yank away free over the air signals from a company that leases antennas? " There are still two more Mondays in the session, and the court could add a Thursday session next week as it has done the previous two."  Or they could continue to wait till the next session this Fall although the expectation is that a decision will come shortly.

I have no inside track nor have I heard any of the testimony.  In fact, I am not even a customer of Aereo; rather, I still get triple play service from our cable provider.  Simply looking at the information that has played across the media, I am firmly of the belief that Aereo will be victorious and broadcasters will still be able to get license fees from cable operators.  Until a decision is rendered, we can only wait and watch. 

There are still two more Mondays in the session, and the court could add a Thursday session next week as it has done the previous two. - See more at: http://www.multichannel.com/news/technology/no-aereo-decision-yet/375250#sthash.j6P5j5OT.dpuf

Amazon Releases The Fire Phone

• 4.7-inch screen
• 13-megapixel camera with optical image stabilization
• 2.2-GHz processor with 2GB of RAM
• Gorilla Glass on both sides
• 3 D Effects
• One-handed shortcuts
• Firefly
• MayDay
• Starts at $199 on a two-year contract according to AT&T's website 
• Starts at $649 off-contract according to Amazon's website 
• Launches July 25
• Exclusive to AT&T

Apple Offering Lower Cost iMac Desktops

Timing is everything and perhaps today's Apple announcement that they are offering a lower cost iMac on the same day that Amazon is announcing its new smartphone is just that.  While it may not derail the Amazon PR efforts, it certainly tries to keep Apple in the news. 

Some news is already speculating that the exclusivity distribution for Amazon of its new smartphone on the AT&T platform will hurt them.  I don't tend to agree and think that exclusivity, especially if the product delivers unique value, will serve them well.  Still, until we hear the official news, we can only wait and see.

As to the Apple iMac announcement, it is limited to the desktop.  More and more people have found the power and flexibility of the laptop far more important.  It may just be a way to lower inventory while more future effort will be focused on a new line of laptop computers. 

Tomorrow's Amazon Announcement

It is expected to be announced tomorrow that Amazon will extend its communication footprint past the tablet to now include its own smartphone.  How this handset differentiates itself from Apple and Android based phones remains to be seen.  One rumor is that the screen will deliver a 3D like experience.  Whether that proves valuable to the consumer remains to be seen.  It hasn't worked with past products, from gaming systems to HDTVs, but perhaps the timing and the technology is finally right.

The other news is that AT&T will be the exclusive carrier for the new Amazon phone.   Of course, the primary use of the phone is calling and texting, but consumers also like a large library of apps for games, news, weather, video, music, and other needs.  Amazon might just have its own app that further eases the transaction process along with easy access for Amazon Prime customers to all its subscription services.  Along with subscription and advertising, e-commerce is the third leg of revenue streams that Amazon continues to conquer. 

Its certainly been a long time since Apple first did its iPhone exclusive deal with AT&T; now the iPhone can work on almost every carrier.  Loyal Amazon customers could follow a similar path.  And should the product prove highly desirable, could give AT&T a nice bump in subscription.

Tomorrow's Amazon announcement could be broader than just a phone.  Updating its Kindle line of tablets, e-readers, and Fire set top box, and creating a stronger synergy of its product line could be viewed very positively by consumers and investors.  Integration, communication, and commerce could just be the buzzwords we hear by CEO Jeff Bezos. 

The Necessity Of Media Mergers

Friday, I mentioned that the Univision news regarding possible suitors was the tip of the iceberg.  In today's Wall Street Journal, more speculation abounds.  Given the consolidation of cable operators, the slowing growth of TV advertising, and the threat of cord cutting to reaching more subscribers, content companies need to consolidate as well to leverage their value to a smaller base of operators.  In order to continue to raise subscription fees, content companies need to leverage their size as well along with the threat of loss of valuable programming.  That Time Warner Cable lost a significant number of subscribers during one such negotiation demonstrates how important that leverage can be.

While larger media entities like ABC and FOX may have the resources to weather a changing entertainment landscape, midsize media companies may need to consolidate to assure their long run stability.  The article looks at AMC, Scripps (HGTV, Food), Discovery, Viacom (MTV, Comedy Central) and even Time Warner (home of CNN, HBO, TNT) as smaller companies needing bigger parents. 

And while Netflix has been focused on digital distribution, they might also seek acquisition of a content creator to help fill their pipeline.  "Among studios Lions Gate Entertainment, maker of "Mad Men" and "The Hunger Games" movie franchise, is seen as a potential target. Sony Corp.'s studio is also viewed as a possible target."   Who is next to announce is anyone's guess.  But the authors agree with me that there should be more announcements coming. 

Merger Mania Part II

Just last week, following the third announced merger news of Sprint and T-Mobile, I speculated that the next would be a cable network.  Well, the pace of media merger mania is not slowing down.  According to The Wall Street Journal, Univision is having preliminary for sale discussions.  As its major competitor, Telemundo, is owned by NBC, another broadcaster could be interested in acquiring the broadcast network and its sister cable nets.  "Univision has been seeking to expand its offerings to attract more advertising and subscription revenues from pay TV operators. In the past two and a half years alone, it has launched nine cable channels, bringing the total to 12."  Given the growth of the Hispanic community and the great ratings that Univision continues to get, the network would be a fine addition for folks like CBS, FOX, and ABC.  Some think that Time Warner, home to the Turner property of networks, would be a great fit as well.

That a deal has not yet been struck may be a function of price/value.  Univision last turned over 7 years ago and the current owners may be seeking a bigger ROI.  Should a buyer be found, the FCC will have a very busy summer as they decide on all the merger matters before them, including Comcast -Time Warner Cable, AT&T - DirecTv, and Sprint-T-Mobile. And who will be next to sell.  I expect more to come this year. 

Amazon Prime Adding Music Subscription

The Amazon Prime consumer has one more reason to stay a loyal subscription.  Not only do they get free shipping of their retail purchases and movie steaming, but now they can access a music subscription service as well.  Given all the noise of Apple buying Beats and Google building its music business, Amazon was quick to act.  Surprisingly, no one has tried to acquire any of the big players in the business, notably Spotify or Pandora. 

How will the Amazon Prime Music service compare against the others, I will leave that to the music experts.  But for those current Amazon customers that may have groused at the recent increase in their monthly fee, this offer may calm their concerns.  And for those potential Amazon Prime subscribers, the addition of music creates another valuable value-add to the mix to encourage someone to become a Prime customer.

The rise in music subscription streaming services will have ramifications verse download and purchase of albums and singles.  How much of a disruptor it is to the music industry remains to be seen.  But if you can access your songs at any time with a subscription, why own. 

Amazon Tough Negotiations Go Public

Most business negotiations go on behind the scenes between vendors and distributors; as consumers will only see the product on the shelf and the price we should pay.  Sometimes, those negotiations become public and consumers get engaged and enraged at the process, especially when it affects them personally. 

We have seen it with cable networks and distributors, but now we are seeing it between digital retailers and their vendors.  The big news concerns the largest digital retailer, Amazon, and their fight with not one, but two vendors.  The first has been with book publisher Hachette, regarding terms for selling their books.  Their next big release is with JK Rowling, a potential must have summer read.  And now we hear of another negotiation gone south with Warner Bros. on the sale of their movies, including the DVD release of The Lego Movie. 

Of course, we as consumers don't know all the details of the negotiation, we only know that it limits availability of getting this content from this distributor.  While it may be difficult to switch cable providers to assure receiving content, it seems much easier to simply buy these books and movies from other retailers.  The same clicks can get you the JK Rowling novel or Lego movie from multiple other retailers including Barnes & Noble, Target, and Walmart.  Perhaps that it is Amazon, the largest digital retailer, that is in the middle of such controversy, makes us pay more interest.  For whatever the outcome, consumers can still get their content.  And that might hurt the Amazon customer experience in the long run.