DirecTV Now Raising Prices, Changing Service Plans

Despite losing nearly 270,000 DirecTV Now subscribers in the fourth quarter (ended Dec. 31, 2018), AT&T is initiating a $10 monthly price hike for its standalone online TV service that takes effect in early April.

DirecTV Now is also changing service plan options for new subscribers to include Plus ($50 for 40 channels, including CNN, ESPN and HBO) and Max ($70 for 50 channels, including HBO/Cinemax, ESPN and regional sports networks).

The plans replace existing (wordy) options such as “Live a Little Plan” ($40) with 65 channels; “Just Right” ($55) with 85 channels; “Go Big” ($65) 105 channels; and “Gotta Have It” ($75) for 125 channels.

Existing subscribers will have their plans grandfathered in.

AT&T is also offering OTT streaming versions of its linear pay-TV packages, including “Entertainment” (65 channels for $93 per month); “Choice” ($110 and 85 channels); “Xtra” ($124 for 105 channels); “Ultimate” ($135 for 125 channels); and “Optimo Mas” ($86 for 90 channels).

As cord-cutting increases among consumers, AT&T hopes migrating linear TV subscribers to OTT distribution translates into more broadband subs. The company ended 2018 with 15.7 million high-speed Internet subs.

 

 

 

 

Sprint Calls Out AT&T Over ‘False’ 5G Claims

Next-generation 5G wireless technology continues to get a lot of attention (and hype) — notably as an enhanced distribution channel for mobile video entertainment.

AT&T and Verizon have been among the first wireless carriers offering 5G networks in the country. AT&T last December said it become the first telecom in the United States offering 5G wireless service over a commercial, standards-based mobile 5G network.

Indeed, consumer awareness of the fifth-generation wireless technology successor has reached mainstream, according to new data from The NPD Group.

Yet, 5G is still more marketing than reality. Availability of 5G-compatible phones to consumers might occur by the end of the year — with mainstream usage on par with 4G LTE years away, according to analysts.

That’s why Sprint is calling foul on AT&T regarding what it claims are false advertising and deceptive acts by the corporate parent to WarnerMedia to confuse consumers.

Sprint, which claims to have 54.5 million subscribers and is attempting merge with T-Mobile, took out a full-page ad in the March 10 edition of The New York Times accusing AT&T of allegedly deceiving consumers into believing that their existing 4G LTE network operates on a much-coveted and highly anticipated 5G network.

A recent survey commissioned by Sprint found 54% of consumers mistakenly believed, based on AT&T’s claims, that the company’s 5G E network is the same as or better than a true 5G network. Another 43% of consumers wrongly believed that if they were to purchase an AT&T phone today, it would be capable of running on a 5G network.

“AT&T is not offering its customers 5G but is delighted by the confusion they’ve caused with their deceptive ‘5G E’ marketing and attempt to convince consumers that they’ve already won the 5G race,” David Tovar, SVP, corporate communications, at Sprint said in a statement. “We’re not standing for this kind of deception, and neither should consumers.”

Indeed, Sprint filed a federal lawsuit asking that AT&T’s ads be stopped.

“Every carrier – every company – should tell consumers the truth and be held accountable for the promises they make,” Tovar said.

An AT&T representative wasn’t immediately available for comment.

 

 

 

 

House Democrats Investigating Whether Trump Personally Sought to Block AT&T/Time Warner Merger

The Democrat-controlled House of Representatives continues to ratchet up scrutiny of President Trump and his administration — now focusing on whether the President personally attempted to block AT&T’s $85 billion acquisition of Time Warner.

The merger, which created WarnerMedia, was officially confirmed last month by a federal appeals court denying an objection by the Department of Justice.

Jerrold Nadler (D-N.Y.), chairman of the House Judiciary Committee, and David Cicilline (D-R.I.) sent letters to Makan Delrahim, chief of the Justice Dept.’s antitrust division, and White House counsel Pat Cipollone, seeking documentation regarding possible interference by Trump.

Jerry Nadler

The inquiry is in response to a New Yorker story that claimed Trump personally wanted to kill the merger largely due to his dislike for Turner-owned CNN and its reporting of his administration.

“Even the appearance of White House interference in antitrust law matters undermines public trust in the Department of Justice’s integrity and tarnishes meritorious enforcement by the antitrust division,” Nadler and Cicilline wrote. “The fact of actual interference would constitute a serious abuse of power.”

David Cicilline

Delrahim has said he was never pressured by Trump to pursue antitrust litigation.

“I have never been instructed by the White House on this or any other transaction under review by the antitrust division,” Delrahim said on Nov. 8, 2017, prior to filing the lawsuit.

AT&T originally sought to investigate Trump’s influence — a request denied by federal judge Richard Leon in the original antitrust trial. CEO Randall Stephenson called Trump’s possible interference the “elephant in the room.”

Makan Delrahim

Report: Trump Personally Sought to Block AT&T/Time Warner Merger

Despite claims to the contrary, President Trump wanted to block AT&T’s $85 billion acquisition of Time Warner — largely for political reasons, according to a report by The New Yorker.

According to the publication, which cited a “well-informed source,” Trump in 2017 called on former economic advisor Gary Cohn and then-chief-of-staff John Kelly to personally ensure that the Justice Department filed a lawsuit against the merger — which it did in November, citing antitrust concerns.

Trump, on the 2016 campaign trail, had said the merger would be bad for the country. According to the New Yorker, Trump’s decision was largely due to his dislike for Time Warner’s CNN news division, which he often called “fake news” in response to critical reports of his administration.

“The President does not understand the nuances of antitrust law or policy,” a former unnamed official told the publication. “But he wanted to bring down the hammer.”

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When a U.S. federal court judge ruled in favor of AT&T, the DOJ filed an appeal, which was rejected last week by an appeals court. The merger resulted in the creation of WarnerMedia, which includes Warner Bros., HBO and Turner.

The intervention by the Justice Department raised eyebrows at the time as it represented the agency’s first since it successfully blocked AT&T’s $39 billion acquisition of T-Mobile in 2011.

Indeed, The New Yorker stated Trump had no objection to 21st Century Fox’s $71.3 billion asset sale to The Walt Disney Co. by longtime supporter Rupert Murdoch, whose Fox News business remains an influential media asset to the President.

House Democrats Seek to Reinstate ‘Net Neutrality’ Legislation

House Democrats in Congress reportedly plan to unveil legislation aimed at restoring net neutrality guidelines mandating Internet service providers (ISPs) treat all traffic on the Web equally.

The legislation, which would ban ISPs such as Comcast, AT&T and Verizon from blocking/slowing Web traffic or offering faster lanes for a fee, would be released Wednesday by House Speaker Nancy Pelosi, as reported by Reuters.

Internet giants such as Facebook, Amazon, Google and Netflix endorse net neutrality guidelines.

The Federal Communications Commission in 2017 voted 3-2 along party lines to repeal net neutrality guidelines it established in 2015 in a similar vote under the Obama Administration. Those guidelines classified the Internet as a utility under Title II of the Communications Act of 1934.

The repeal enabled ISPs to enforce how its subscribers access the Internet.

Pelosi seeks to work with Senate Democrats getting “Save the Internet” legislation passed that would then require President Trump’s signature — a probable long shot considering Trump’s pick to head the FCC, Ajit Pai, orchestrated the net neutrality repeal.

The U.S. Supreme Court last year refused to hear the appeal of the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule.

Regardless, with 22 state attorneys general endorsing net neutrality, and the U.S. Senate — which is controlled by Republicans — voting in 2018 to restore guidelines, the House feels it has the political momentum.

 

 

 

 

Bob Greenblatt Named Chairman of WarnerMedia’s Entertainment Unit; Kevin Tsujihara’s Role Expanded

As expected, AT&T March 4 named former NBC Universal executive Bob Greenblatt chairman of WarnerMedia’s entertainment and over-the-top video businesses. Greenblatt reports to WarnerMedia CEO John Stankey.

Greenblatt, who left NBC Universal six months ago, joins the former Time Warner company following last week’s exits of HBO boss Richard Plepler and Turner’s David Levy.

Greenblatt oversees HBO, TNT, TBS, truTV, and the company’s over-the-top video business. Kevin Reilly remains in charge of Turner programming, in addition to spearheading WarnerMedia’s pending streaming video service.

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Meanwhile, longtime home entertainment executive Kevin Tsujihara remains chairman/CEO of Warner Bros., while adding responsibilities involving children and young adult viewers.

Specifically, Tsujihara will now also oversee Cartoon Network, Adult Swim, Boomerang, Otter Media, Turner Classic Movies and WarnerMedia’s licensed consumer products.

CNN president Jeff Zucker adds the title chairman of WarnerMedia news and sports, while Gerhard Zeiler transitions from president of Turner International to chief revenue officer at WarnerMedia.

“We have done an amazing job establishing our brands as leaders in the hearts and minds of consumers,” Stankey said in a statement. “Adding Bob Greenblatt to the WarnerMedia family and expanding the leadership scope and responsibilities of Jeff, Kevin and Gerhard — who collectively have more than 80 years of global media experience and success — gives us the right management team to strategically position our leading portfolio of brands, world-class talent and rich library of intellectual property for future growth.”

Report: Warner’s Tsujihara Still Keen on Premium VOD

Warner Bros. Entertainment Chairman and CEO Kevin Tsujihara again pushed the idea of early home access for consumers that want theatrical movies sooner — oft termed premium VOD.

“Clearly we want the theatrical experience to continue and to maintain that incredible social experience,” he told the Los Angeles Times Feb. 27, noting that Crazy Rich Asians “got into the zeitgeist,” which is “very difficult to do on a streaming service.”

But he said that early home access is part of the evolution of content delivery.

“If consumers want to be able to experience it in the home sooner, then they should have that option as well,” he said. “That’s where we’d like to see the movie business go.”

As far as the new direct-to-consumer streaming service coming from parent company AT&T, Tsujihara told the Times that the studio’s content will go to that platform as well as linear, current customers.

“It’s about finding the right platform for the content,” he told the Times. “Some will go to HBO, some will go to Turner, some will go to Netflix, and other streaming platforms, and some will go to the direct-to-consumer platform.”

He also commented on the promise of 5G.

“It actually could have a significant impact on our ability to deliver content,” he told the Times.

He said 5G would “turbocharge” the ability to deliver VR and AR experiences.

CFO: WarnerMedia Asset Better Than Expected; Disney Eyeing AT&T’s Hulu Stake

A day after a federal appeals court ruled in favor of AT&T’s $85 billion acquisition of Time Warner, resulting in the creation of WarnerMedia, CFO John Stephens said ownership of the parent to Warner Bros., HBO and Turner has been a fiscal home run.

“It’s turned out to be an asset that may be better than we expected. And we expected a lot,” Stephens told an investor group.

Speaking Feb. 27 at the Morgan Stanley technology, media and telecom conference in San Francisco, Stephens attempted to shoot down media speculation that layoffs and additional cost cutting would occur following the court’s decision.

“We’ve been very careful to set up a separate operating unit [with WarnerMedia] that’s a lot like Time Warner,” he said. “We wanted to protect the culture, we [didn’t] want a finance bean counter from a telephone company go in to what is a tremendously good asset.”

Stephens said results over the past nine months at WarnerMedia have been “consistently” good. They continue to generate cash, they continue to generate value, produce some great-value content.

“The performance of the people at Time Warner … I couldn’t be more pleased with,” he said.

Indeed, through Feb. 24, Warner Bros., led by Aquaman and Clint Eastwood’s The Mule, continues to top all studios at the domestic box office with 22.4% market share and $313.4 million in revenue, according to BoxOfficeMojo.com.

“They continue to generate cash, they continue to generate value … produce some great-value content,” Stephens said. “Sharing that really high-quality content is important.”

From a M&A perspective, he said supply-side integration, marketing, data analytics would be combined without infringing upon WarnerMedia’s culture.

“They [had] a CFO [Howard Averill] and we have a CFO. Those kinds of head-counting synergies have been achieved,” Stephens said.

Stephens said he expects the final season of “Game of Thrones” to drive HBO Now subscribership. He said AT&T is considering putting HBO on unlimited mobile wireless packages – with the increased revenue used to fund additional content spend.

“There’s benefits there that can fund some of those things,” Stephens said. “We want to have that same kind of [‘Thrones’] excitement year round.”

Separately, Disney is reportedly in discussions with AT&T to acquire its 10% stake in Hulu. When combined with Fox’s 30% interest, Disney could control 70% of the SVOD and online TV platform, along with Comcast’s 30% stake.

 

 

 

 

NPD: 5G Consumer Awareness Reaches Critical Mass

Next-generation 5G mobile wireless network technology may be more hype than reality at the moment. But consumer awareness of the fifth-generation wireless technology successor has reached mainstream, according to new data from The NPD Group.

According to the latest NPD Connected Intelligence, 5G awareness among consumers reached 64% at the end of the second half of 2018. That represented a 20% gain from 44% at the end of the first half of 2018.

The report – based consumer panel research of 3,600 U.S. cellphone users completed in February – found 33% of smartphone owners interested in purchasing a 5G-enabled smartphone once available.

Millennials reported have the highest potential (49%) to make the move to 5G, while consumers on unlimited data plans, who NPD says value downloading and streaming video content, are slightly less eager (43%) to purchase a 5G-enabled smartphone.

Verizon late last year launched limited 5G network rollouts in Houston, Sacramento, Los Angeles and Indianapolis, while AT&T bowed service in 12 cities, including Atlanta, Charlotte, N.C., Dallas, Houston, Indianapolis, Jacksonville, Fla., Louisville, Ky., Oklahoma City, New Orleans, Raleigh, N.C., San Antonio and Waco, Texas.

“In the last several days, we’ve seen the first 5G-enabled smartphone announcements and as expected, the devices are coming with a premium price tag, due to economies of scale, and a slightly larger form factor, given the hardware needs, than what consumers have become accustom to,” Brad Akyuz, executive director, industry analyst, NPD Connected Intelligence, said in a statement. “While consumer sentiment is positive, cost, form factor, and availability of 5G services will ultimately determine whether consumers will upgrade to 5G-enabled smartphones to enjoy much faster connection speeds.”

 

AT&T Eyeing HBO, Warner Content for AVOD Distribution

AT&T currently markets standalone over-the-top video services DirecTV Now and Watch TV — the latter offering mobile access to 30 pay-TV channels for $15 monthly and no long-term contract.

Watch TV has generated about 500,000 subscribers since its debut last June. DirecTV Now, which jettisoned more than 260,000 subs after ending promotional pricing late last year, has about 1.6 millions subs.

The telecom now appears to be considering ad-supported VOD — long a stepchild to subscription streaming VOD service such as Netflix, Amazon Prime Video and Hulu.

With Amazon subsidiary IMDb.com launching a free ad-supported VOD service, Hulu’s basic SVOD plan featuring commercials, and Comcast launching AVOD for Xfinity subscribers in 2020, AT&T is pondering ad-supported distribution for select content from subsidiary WarnerMedia.

Speaking on the Jan. 30 fiscal call, CEO Randall Stephenson reiterated that companies with “very strong” IP, “deep libraries” of IP are the ones that are going to succeed over time.

He said Warner Bros. CEO Kevin Tsujihara and WarnerMedia boss John Stankey have been analyzing optimal distribution channels and license opportunities for content.

Tsujihara helped craft the recent non-exclusive license extension with Netflix for “Friends,” a deal that lets WarnerMedia stream the venerable sitcom through its pending SVOD service launching later this year.

Stephenson said WarnerMedia content would be targeted toward what he called “two-sided” business models that include SVOD and AVOD.

“There’s a demand and the customers have become accustomed to advertising free subscription services,” he said. “And we think HBO and a lot of the Warner content [is] premium content will fit into that mold.”

While Stephenson didn’t reveal AVOD specifics, he said the recent acquisition of Xandr to help sell targeted digital advertising to AT&T’s 170 million mobile and broadband subscribers, underscored opportunities for advertising-supported models that help keep content (i.e. catalog) prices down, keep consumer costs down and help fund additional content acquisition and purchasing.

“Xandr is a big part of making that model work,” he said. “So, our model will be a two sided model, with a heavy subscription service, with some ad-supported elements to it as well.”