One is a cable premium network, the other is a digital streaming service, one requires a cable subscription, the other access to broadband. Yet both deliver original and licensed content in a subscription format. As the leader, HBO has normally had to compete with other premium channels including Showtime, Starz, and the upstart Epix on the cable platform, while Netflix sees more competition from Amazon and Hulu. And as the two services try to crossover into each others space, there is competition brewing between Netflix and HBO.
For HBO, their push into digital is the successful HBO Go app which lets cable authenticated subscribers stream and watch content on their mobile devices; For Netflix, it is access on OTT boxes, including TiVo, who now has some cable MSOs accessing it along side cable premium services. And as each financial quarter is announced, competition extends to their balance sheet. "The company's founder and CEO, Reed Hastings, announced in a Facebook post on Wednesday that for the first time, Netflix has pulled in more subscriber revenue than HBO over a three-month period." While HBO still has more profitability, it has also been doing it a lot longer. But Netflix continues to disrupt the business model and for that HBO and the other premium cable services need to keep pushing their value and content advantages.
Friday, August 8, 2014
Thursday, August 7, 2014
T - Mobile May Have Other Suitors
Sprint decided to pull its bid to merge with T-Mobile, either because it doubted it would receive FCC approval or simply felt it wasn't a good fit. But T-Mobile may not be single for long. Speculation comes that Charlie Ergen and his Dish Network might once again be interested in pursuing a telecommunication company. Last year he tried to obtain Sprint but lost that fight; T-Mobile might be the next best thing.
"After buying up billions of dollars worth of spectrum over the past several years, Dish has been scouting for a partner to enter the wireless business as its core video business has matured" according to the WSJ. At the same time, Dish has been securing more streaming programming partnerships. On Tuesday they announced a new deal with A&E Networks that includes streaming rights. It follows a deal in March with Disney Networks. An acquisition of T-Mobile gets Dish closer to delivering a nationwide streaming service model.
With AT&T planning to acquire DirecTv, a Dish T-Mobile merger would help to keep them competitive, albeit still smaller in scope and size. It does help improve the competitive landscape in what is more than just a cellular business model these days. Broadband access is everything and choice is already limited. It seems to me that Dish and T-Mobile would be a strong synergistic match. It also brings another legitimate entity into the streaming space.
"After buying up billions of dollars worth of spectrum over the past several years, Dish has been scouting for a partner to enter the wireless business as its core video business has matured" according to the WSJ. At the same time, Dish has been securing more streaming programming partnerships. On Tuesday they announced a new deal with A&E Networks that includes streaming rights. It follows a deal in March with Disney Networks. An acquisition of T-Mobile gets Dish closer to delivering a nationwide streaming service model.
With AT&T planning to acquire DirecTv, a Dish T-Mobile merger would help to keep them competitive, albeit still smaller in scope and size. It does help improve the competitive landscape in what is more than just a cellular business model these days. Broadband access is everything and choice is already limited. It seems to me that Dish and T-Mobile would be a strong synergistic match. It also brings another legitimate entity into the streaming space.
Wednesday, August 6, 2014
Content And Distribution Mergers Kaput
Its summertime and perhaps all the flurry of activity to merge media companies was more hope than reality. On both the content and distribution side of the business, two attempt to merge operations has failed to materialize, for now. Last night, Fox has decided to not go after the Time Warner business and Sprint has withdrawn its plans to acquire T-Mobile. The FCC now can concentrate on fewer remaining acquisition efforts, Comcast - Time Warner Cable and AT&T - DirecTv.
Still the notion of consolidation is a sound one, assuring an immediate pop in market saturation and more leverage against other bigger entities in the competitive landscape. That these two deals have failed to materialize could open the doors for other mergers to move forward. Or simply cause the media industry to pause and reconsider the strategy. It is the dog days of summer and perhaps all will be refreshed to do battle post Labor Day.
Still the notion of consolidation is a sound one, assuring an immediate pop in market saturation and more leverage against other bigger entities in the competitive landscape. That these two deals have failed to materialize could open the doors for other mergers to move forward. Or simply cause the media industry to pause and reconsider the strategy. It is the dog days of summer and perhaps all will be refreshed to do battle post Labor Day.
Tuesday, August 5, 2014
Gannett Follows The Non Synergy Strategy
Just a day after Tribune, a week after Scripps, and a few months since Time Inc spun off from Time Warner, Gannett has announced that it too will spin off its print business. While announcing the purchase of cars.com, Gannet decided the time was right to put its publishing arm, including USA Today, into a separately run company. And while timing of the separation hasn't been announced, it simply confirms that broadcast and digital operations see no room in their 21st century companies for old fashioned print content, despite the potential value of its news gathering and future web subscription businesses.
So what happens post break up to these publishing companies? Do they themselves seek to merge together into few, bigger organizations, relying on economies of scale and fewer rivals to attain better market penetration? Or is it simply the first step in the eventual loss of these notable brands? One thing is for sure, more of these announcements will come.
So what happens post break up to these publishing companies? Do they themselves seek to merge together into few, bigger organizations, relying on economies of scale and fewer rivals to attain better market penetration? Or is it simply the first step in the eventual loss of these notable brands? One thing is for sure, more of these announcements will come.
Monday, August 4, 2014
Print No Longer Part Of A Multi Media Strategy
Content synergy, enabling companies to diversify and present its media across multiple platforms, seems to have a black sheep in the family. While it seems crucial that content be accessible wherever and whenever the consumer chooses, there are limits. The notion of content everywhere, on TV, on mobile, on computer, but not on print. And companies are jettisoning their print businesses to focus on content everywhere else.
This spinning off of print businesses has increased of late. Earlier this year we watched Time Warner unload its Time magazine business into a separate company. Last week, E. W. Scripps and Journal Communications announced plans to "spin off the Milwaukee Journal Sentinel and Scripps' newspapers into a new publicly traded company, Journal Media Group" while merging their broadcast business into its own business. And today, Tribune Company is splitting its broadcast operations from its printing business and brands like The Chicago Tribune and Los Angeles Times. Synergy with print media can't be done according to Scripps, Time Warner, and Tribune.
Each of these new independent print publishing businesses, competing in what is assuredly a very mature business, have to work alone to create new multimedia partnerships. Pushing hard to transition from print to digital, from test and photo only to the incorporation of video and audio content from new sources. Each of their parent companies couldn't see ways to do it across businesses and sharing content internally. Its time for these print companies to either sink or swim.
What went wrong? Why couldn't they find internal economies of scale to support the old business model while new ones are established? Why couldn't synergy work? I think that part of the problem lies in the fact that public owned companies are hard pressed to grow quickly and anything that slows them down must be jettisoned off. Until print finds its footing in a digital space, it is a mature business with high costs and an uncertain future. Public companies can't always afford to nurture and be patient.
Another possibility is that new digital content companies are already pursing old print customers; consumers can go online today and find the news they need from websites and social networks. Of course, they lack the credibility or full resources of an established news gathering organization. And in a world of immediacy, we seem to prefer now our news quickly at our fingertips and in short, easy to digest bursts. That puts print at a disadvantage until they can better connect to the consumer with a continuous and noticeable update of their news feed. And consumers have to see enough differentiation to agree to pay a subscription fee as opposed to trolling the web for free content. That may be the most difficult model to maintain.
So expect more companies with broadcast and print businesses to follow suit. Spin off their old newspaper and print distribution businesses and focus on their broadcast and digital content instead.
This spinning off of print businesses has increased of late. Earlier this year we watched Time Warner unload its Time magazine business into a separate company. Last week, E. W. Scripps and Journal Communications announced plans to "spin off the Milwaukee Journal Sentinel and Scripps' newspapers into a new publicly traded company, Journal Media Group" while merging their broadcast business into its own business. And today, Tribune Company is splitting its broadcast operations from its printing business and brands like The Chicago Tribune and Los Angeles Times. Synergy with print media can't be done according to Scripps, Time Warner, and Tribune.
Each of these new independent print publishing businesses, competing in what is assuredly a very mature business, have to work alone to create new multimedia partnerships. Pushing hard to transition from print to digital, from test and photo only to the incorporation of video and audio content from new sources. Each of their parent companies couldn't see ways to do it across businesses and sharing content internally. Its time for these print companies to either sink or swim.
What went wrong? Why couldn't they find internal economies of scale to support the old business model while new ones are established? Why couldn't synergy work? I think that part of the problem lies in the fact that public owned companies are hard pressed to grow quickly and anything that slows them down must be jettisoned off. Until print finds its footing in a digital space, it is a mature business with high costs and an uncertain future. Public companies can't always afford to nurture and be patient.
Another possibility is that new digital content companies are already pursing old print customers; consumers can go online today and find the news they need from websites and social networks. Of course, they lack the credibility or full resources of an established news gathering organization. And in a world of immediacy, we seem to prefer now our news quickly at our fingertips and in short, easy to digest bursts. That puts print at a disadvantage until they can better connect to the consumer with a continuous and noticeable update of their news feed. And consumers have to see enough differentiation to agree to pay a subscription fee as opposed to trolling the web for free content. That may be the most difficult model to maintain.
So expect more companies with broadcast and print businesses to follow suit. Spin off their old newspaper and print distribution businesses and focus on their broadcast and digital content instead.
Thursday, July 31, 2014
AMC Nets - Eat Or Be Eaten
With all the media moves being made on the distribution front, Comcast and Time Warner Cable, AT&T and DirecTv, and on the content front with Fox trying to buy Time Warner, consolidation has become the key buzzword. To remain competitive and to build leverage, strength comes with size and content needs that size to demand higher license fees for its programming.
Speculation on how will do the acquiring and who will be acquired have included nets like Discovery, Scripps, and AMC Networks. Well it seems that AMC would rather eat than be eaten. It has mad a bid to own a major piece of BBC America. Once sold by Discovery Networks, although never owned by them, BBC America has been a small but steady network. And like AMC, BBC has distributed some original programming, like Orphan Black, that has received critical attention. These two nets have partnered in the past so such a move could be a good programming fit.
But the question is whether it is enough to maintain independence or simply delay it. AMC owners, the Dolan family, have demonstrated that they can both buy networks, like Sundance Channel, and also sell networks, including Bravo Network to NBC and fuse to Nuvo. They spun off both AMC Nets and MSG into separate companies from each other as well as from its cable distribution arm, Cablevision Systems. So if the timing and dollars are right, AMC Networks could take either approach. If staying strong is the approach, a BBC America acquisition may not be enough to stay independent.
Speculation on how will do the acquiring and who will be acquired have included nets like Discovery, Scripps, and AMC Networks. Well it seems that AMC would rather eat than be eaten. It has mad a bid to own a major piece of BBC America. Once sold by Discovery Networks, although never owned by them, BBC America has been a small but steady network. And like AMC, BBC has distributed some original programming, like Orphan Black, that has received critical attention. These two nets have partnered in the past so such a move could be a good programming fit.
But the question is whether it is enough to maintain independence or simply delay it. AMC owners, the Dolan family, have demonstrated that they can both buy networks, like Sundance Channel, and also sell networks, including Bravo Network to NBC and fuse to Nuvo. They spun off both AMC Nets and MSG into separate companies from each other as well as from its cable distribution arm, Cablevision Systems. So if the timing and dollars are right, AMC Networks could take either approach. If staying strong is the approach, a BBC America acquisition may not be enough to stay independent.
Wednesday, July 30, 2014
Twitter Finds Growth While Losing Money
Sports, especially the World Cup, was kind to Twitter last quarter. The social media site grew users and usage and exceeded its revenue projections. It also led, as CEO Dick Costolo suggests, new user engagement "from people checking out special feeds set up by Twitter. This gives
Costolo confidence that Twitter can build more 'experiences' around big
events and big topics in the future." Still, the service continues to lose money although at a smaller pace than the previous quarter.
So is the quarter a one shot wonder brought in by a rabid international World Cup interest or can Twitter figure out other ways for users to stay connected to the app ans use it for longer and longer periods? It certainly is an easy way to connect with fans over sports and live events. The Emmys are next month and the World Series in October but can they equal the impact that World Cup offered. Also, they are US centric events while World Cup was a global phenomenon that comes every 4 years. And while the Olympics are a couple years away, they hardly seem to deliver that same passion.
Twitter has a lot to be proud of while it continues to focus on monetizing its social engagements. Too much apparent advertising might spoil the process, too little won't pay the bills. Its a big job for Costolo to keep dollars flowing into the site.
So is the quarter a one shot wonder brought in by a rabid international World Cup interest or can Twitter figure out other ways for users to stay connected to the app ans use it for longer and longer periods? It certainly is an easy way to connect with fans over sports and live events. The Emmys are next month and the World Series in October but can they equal the impact that World Cup offered. Also, they are US centric events while World Cup was a global phenomenon that comes every 4 years. And while the Olympics are a couple years away, they hardly seem to deliver that same passion.
Twitter has a lot to be proud of while it continues to focus on monetizing its social engagements. Too much apparent advertising might spoil the process, too little won't pay the bills. Its a big job for Costolo to keep dollars flowing into the site.
Tuesday, July 29, 2014
Windstream Gains Could Help All Telecom
Per the WSJ, thanks to IRS approval, Windstream, a rural telecommunications company, will be able to "spin off some of its telecommunications network assets into an
independent, publicly traded real estate investment trust, a move that
comes as a wave of U.S. companies look for ways to lower their tax
burdens." That news has lifted the telecom sector resulting in telephone and cable companies, those with a wireline infrastructure, with a potential tax benefit as well. And whether they also decide to spin off assets into a REIT or not, the stock market expects they will, leading to higher stock prices today.
How it translates into better service, more investment in the infrastructure, more employment, and other capital investment programs remains to be seen. Should that be the case, it demonstrates that a heavy tax burden actually reduces the opportunity for new dollars to grow and other benefits to be taken.
How it translates into better service, more investment in the infrastructure, more employment, and other capital investment programs remains to be seen. Should that be the case, it demonstrates that a heavy tax burden actually reduces the opportunity for new dollars to grow and other benefits to be taken.
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