Cox Adds YouTube to Online TV Service

Cable pay-TV operator Cox Communications reportedly has begun offering access to YouTube (including YouTube Channels) on its upstart “Contour” online TV service. The cabler recently incorporated direct-access to Netflix subscribers as well.

Contour, which is available in pay-TV channel bundles priced from $59.99 monthly is powered by Comcast’s broadband-based X1 platform. Contour features include a voice remote, which allows customers to change channels, find shows, get recommendations and launch apps by simply using voice commands.

The TV app offers personalized news, weather and traffic, including a sports app which shows stats and scores on the TV screen without interrupting the game. The cloud-based Contour interface is available in-home and on a mobile app which allows viewing on mobile devices both in and outside the home.

 

 

Sky Posts Strong Q3 Fiscal Results

British satellite TV operator Sky – coveted by 21st Century Fox, Disney and maybe Comcast – April 19 reported a 5% increase in third-quarter (ended March 31) revenue to £10.1 billion ($14.2 billion) from £9.6 billion during the previous-year period. Operating income increased 22% to £857 million from £702 million last year.

“It’s been a good quarter for Sky,” CEO Jeremy Darroch, said in a statement.

The pay-TV operator added 70,000 new video subscribers in the U.K. and Ireland, ending the period with 13 million. The service also inked new partnerships with Netflix and music streaming service Spotify for its Sky Q over-the-top video platform.

Sky has another 5.2 million and 4.8 million video subscribers in Germany/Austria and Italy, respectively.

“Against the back drop of a challenging consumer environment, this performance reflects the continual improvement in our broad set of products and services,” Darroch said.

The executive reiterated that Fox’s offer for outstanding ownership of Sky is currently being reviewed by the Competition and Markets Authority. The CMA is due to send its final report to the Secretary of State by May 1, who is expected to give his decision no later than June 13.

In assuage British regulators, Fox has suggested “ringfencing” Sky News from outside corporate (read Fox owner Rupert Murdoch) influence, and/or divesting Sky ownership to Disney.

Disney has a separate offer on the table for select Fox assets, including 20th Century Fox Studios and Sky. Murdoch is keeping Fox News and Fox Sports in the U.S., among other provisions.

In February, Comcast made public its interest in offering an offer for Sky that significantly exceeds Fox’s. The cable giant has yet to act on that.

“Since no firm offer has yet been made by Comcast or any other third party, Sky shareholders have been advised to take no action,” Darroch said.

U.K. Regulator Mandates Disney Into Sky Takeover Offer

The Panel on Takeovers and Mergers, a U.K. regulatory board, April 12 ruled the Walt Disney Co. be forced to match Fox’s $14.4 billion cash offer for British pay-TV service Sky should its $52.4 billion acquisition of select 21st Century Fox assets succeed. Fox currently owns 39% of the satellite TV operator.

The panel mandated Disney pay 10.75 pounds ($15.22) per Sky share, which is equal to Fox’s bid in 2016 for outstanding Sky shares currently held up in regulatory limbo.

Disney, which initially said it wasn’t interested in acquiring the remaining stake in Sky, has agreed to the ruling, according to The Takeover Panel.

While the ruling affords Sky investors a guaranteed Sky buyer should Fox’s bid fail, the markets remain key on Comcast’s Feb. 27 stated desire to bid more than $31 billion for Sky – which represents a 16% premium on the Fox bid. Comcast is also mulling a potential rival offer to Disney for 21st Century Fox assets.

Fox, in a statement, said it remains committed to its cash offer for Sky, which is supported by revised remedies recently offered to the Competition and Markets Authority (CMA) with whom Fox has been co-operating in order to bring the U.K. regulatory process to a “swift and satisfactory” conclusion.

 

Comcast Returns ‘Watchathon’ Binge-Viewing Week

Comcast Cable April 11 announced it is bringing back the “Xfinity Watchathon Week” April 16-22, affording subscribers non-stop, on-demand access to thousands of hours of content – including over-the-top.

Launched six years ago as a TV Everywhere antidote to Netflix and OTT video, Comcast for the first time is offering Watchathon to Xfinity Internet-only subscribers and programming from Netflix and more than two dozen SVOD services, such as Acorn TV, AMC Premiere, FX+, Lifetime Movie Club, History Vault and even DOGTV, which offers a selection of programming made just for man’s best friend.

Eligible subs can also watch thousands of movies and TV shows from more than 50 networks, including AMC, FX, HBO, MTV, NBC, Showtime, and Starz.

Comcast will also offer a subset of programming to its Internet-only subs via the Xfinity Stream app and portal.

“This year, we’re … offering X1 customers a unique opportunity to sample and explore the best programming from dozens of traditional networks and studios, streaming services and emerging SVODs,” Daniel Spinosa, VP, video entertainment services, Comcast Cable, said in a statement.

Xfinity Internet-only subs have access to back episodes of HBO’s “Game of Thrones,” and ‘Westworld,” Showtime’s “Billions,” and “Homeland,” and Starz’s “Outlander,” and “Power,” among other programs.

The promotional week will enable Xfinity subs the option to explore dozens of third-party SVOD platforms, such as Acorn TV’s British hits, AMC Premiere, CuriosityStream’s documentary films and series, Daily Burn’s workout class, select shows from FX+, Gaiam TV Fit & Yoga fitness videos, History Vault’s historical and educational content, and Stingray Karaoke’s collection music.

“With voice control and the ability to surface our programming seamlessly within their experience, X1 provides networks like us with a unique platform for discovery alongside some of the best and most popular programming available today,” said Matthew Graham, GM, Acorn TV.

TiVo Inks License Deal with Starz

Home entertainment technology pioneer TiVo April 3 said it signed a long-term intellectual property license agreement with Starz.

Lionsgate-owned Starz is acquiring a license to the TiVo patent portfolios and over-the-top video assets of the “intellectual ventures” patent portfolio under the TiVo/IV licensing partnership.

“This agreement emphasizes the importance of TiVo’s patent portfolios, especially for companies who are working to keep up with rapid developments and changes in the OTT video space,” Arvin Patel, EVP and chief intellectual property officer, Rovi Corp., a TiVo company, said in a statement.

TiVo, which created the digital video recorder market in 1999, has spent decades investing in R&D to enhance digital distribution technologies for the media and entertainment industry.

In 2016, Rovi acquired TiVo for $1.1 billion, incorporating the TiVo name as its new corporate identity. Between the two companies, they reportedly hold more than 6,000 patents used in practically every aspect of consumers’ day-to-day interaction with their entertainment.

“By leveraging [our] innovations, TV networks and other OTT [distributors] can quickly strengthen or upgrade the entertainment experiences they provide and in turn, spend more time and energy focused on other business priorities,” Patel said.

Indeed, patent litigation has proved to be a lucrative side business for TiVo. The company has been awarded by courts more than $1 billion in patent settlements through 2012.

Earlier this year, TiVo filed a lawsuit against Comcast, alleging the pay-TV operator’s X1 set-top infringes technology invented and patented by Rovi, including pausing and resuming shows on different devices, restarting programs in progress, advanced DVR recording features, and advanced search and voice functionality.

Comcast Rethinking OTT Opposition?

NEWS ANALYSIS – Comcast’s surprise $30.9 billion bid last month for British satellite TV operator Sky may be more than an effort to thwart Disney’s global ambitions. It could signal that the country’s largest cable operator is finally coming to terms with over-the-top video.

In December, Disney announced it would acquire select 21st Century Fox assets, including Sky, for more than $52 billion.

To be sure, Comcast CEO Brian Roberts said all the right things: Sky has “great people” and “capable management,” in addition to 23 million subscribers across the U.K., Italy and Germany. What he also admired is Sky’s technological innovation.

After Disney spent billions acquiring New York technology company BAMTech from MLB Advanced Media to further its branded OTT video platforms, Comcast had to reconsider its longstanding opposition to distribution channels other than linear television.

As Netflix revolutionized video distribution by creating the SVOD business model, Comcast responded with TV Everywhere, which attempted to give subscribers on-demand access to programing on digital devices. It then became the first pay-TV operator to offer transactional VOD and digital sell through of Hollywood movies.

While TV Everywhere has finally taken hold with consumers – after lengthy indifference – Netflix has more 117 million subscribers, including 53 million in the United States compared to Comcast’s 21.3 million.

At the same time, executives at Comcast Cable and NBC Universal continued to downplay OTT distribution. In a fiscal call last year, Steve Burke, CEO of NBC Universal, said that while the media company had deals with online TV services such as Sling TV, DirecTV Now, Hulu Live and YouTube TV, he doubted the platforms would make much of an impact.

“They’re off to a relatively slow start,” Burke said.

Indeed, NBC’s attempt at a standalone OTT comedy platform (SeeSo) shuttered after 18 months.

Neil Smit, former CEO of Comcast Cable, in 2016 infamously declared that he hadn’t seen an “OTT model that really hunts.” Less than a year later Smit stepped down as CEO, replaced by company veteran Dave Watson, whose stance on OTT is only slightly changed from his predecessor’s.

But opinions can change in the face of market reality.

NBC, working with Roku, announced the launch of a reality TV streaming service in the U.K. Dubbed, “hayu,” the service offers more than 5,000 episodes of U.S. and British reality TV shows, including “Keeping Up with the Kardashians,” and spin-off, “Life of Kylie,” in addition to “The Real Housewives” and “Million Dollar Listing” franchises.

“[Comcast’s purchase of] Sky brings with it a trove of exclusive content and rights that could be the basis of an OTT service with a genuine moat, capable of rivaling Netflix itself,” analyst Craig Moffett with MoffettNathanson Research wrote in a March 12 note.

Indeed, while Comcast CEO Roberts has embraced Netflix to the point of offering it seamlessly to cable subscribers, he understands well enough that the SVOD pioneer has morphed into much more than global distributor.

“One can assume that Comcast believes that the combination of Sky’s and NBC Universal’s proprietary content will be enough of a deterrent to ensure that the margins available to an OTT provider don’t simply get competed away,” Moffett wrote.

Hulu: 63% of Live TV Subs Streamed Winter Olympics

Hulu said 63% of Live TV subscribers streamed 6.5 million hours of coverage at the 2018 Winter Olympics in Pyeongchang, South Korea, which equates to 15 hours per viewer during the 18-day quadrennial event.

Most streamed events included women’s figure skating, bobsledding, snowboarding, alpine skiing, ski jumping and freestyle skiing, according to MultichannelNews.com.

The data isn’t surprising considering Hulu is co-owned by NBC Universal parent Comcast. It also offered a Winter Olympics customized interface enabling users easier selection of their favorite events.

The $39.99 live TV service launched last May and reportedly has about 450,000 subs.

 

Comcast Offers $31 Billion in Cash for Sky

In a major consolidation move across the Atlantic, Comcast Feb. 27 announced a $31 billion cash offer for British satellite giant Sky. The $17.40 per share offer bests Rupert Murdoch’s $14.96 per share offer through 21st Century Fox.

Murdoch has sought to acquire the remaining 61% ownership of Sky after his initial 39% stake.

“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Comcast CEO Brian Roberts said in a statement.

Sky provides sports programming, movies and broadband service to 23 million homes across Britain, Ireland, Germany, Italy and Austria.

Notably for home entertainment, Sky’s “Buy & Keep” platform last October began offering consumers of digital movies a Blu-ray copy sent separately in the mail. Sky previously only offered a DVD backup.

Comcast, which owns NBC Universal and DreamWorks Animation, is seeking to outmaneuver The Walt Disney Co., which has a $52 billion offer for select Fox assets, including Sky.

The cable giants contends the acquisition would enhance its entertainment, distribution, and technology prowess domestically, while expanding it international footprint to more effectively compete in the rapidly changing and competitive entertainment and communications landscape.

“We already have a strong presence in London, and Comcast intends to use Sky as a platform for our growth in Europe,” said Roberts.

In a statement, 21st Century Fox said it remained committed to its $15 billion cash offer for the remaining stake in Sky, announced Dec. 15, 2016.

“We note that no firm offer has been made by Comcast at this point. A further statement will be made if appropriate,” Fox said in a statement.

Media reports suggest Roberts is also considering another bid for Fox assets after Comcast’s original $60 billion offer was rejected in favor of Disney’s.

 

Report: Comcast Revisiting Disney Bid

Comcast reportedly is considering revising a previous bid for select assets of 21st Century Fox. The original $60+ billion bid was turned down in favor of Disney’s $52.4 billion offer largely due to antitrust concerns, according to The Wall Street Journal.

Rupert Murdoch, chairman of 21st Century Fox, owns WSJ parent News Corp.

While both companies’ bids for 20th Century Fox film and TV assets — which include Fox 2000, Fox Searchlight, majority control of Hulu, Star India, Sky, FX, Fox’s regional sports networks, including YES and $13.7 billion in Fox debt — were similar, Fox chose Disney’s lower offer due to regulatory concerns.

Indeed, when Comcast — one of the nation’s largest cable operators — acquired NBC Universal, it went to great lengths to assuage regulators’ concerns about unfair competition and monopolies. The company thus agreed to be a silent partner in Hulu, among other arbitration conditions that expired in January.

In acquiring Fox, Comcast seeks additional cable TV networks, in addition to content creation. It’s a strategy AT&T is following acquiring Time Warner. That deal’s future remains unknown and is now under litigation from the Department of Justice, citing antitrust issues.

Separately, Sen. Richard Blumenthal (D-Conn.) in December urged to the DOJ to re-investigate Comcast’s acquisition of NBC Universal following the end of government-imposed conditions.

“If your investigations determine that the Comcast-NBC acquisition will produce anticompetitive effects, even if the merger conditions are retained, you may need to reconsider separating Comcast and NBC universal in order to fully restore competition,” Blumenthal wrote Makan Delrahim, head of antitrust at DOJ.

Meanwhile, Fox has issues of its own. The company’s $16.3 billion attempt to acquire the remaining 61% stake in Sky — Europe’s largest satellite TV operator — was thrown a roadblock when the U.K. watchdog Competition and Markets Authority ruled the deal was not in the public interest.

“Media plurality goes to the heart of our democratic process,” Anne Lambert, chair of the CMA, said in a statement. “It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.”

Fox, in a statement, said it would “continue to engage with the CMA ahead of the publication of the final report in May.” Negotiations reportedly could include divesting Sky News from Murdoch’s influence.

 

Hulu Posted $920 Million Equity Loss for Corporate Owners in 2017

Hulu, the No. 3 domestic subscription streaming video service with 17 million subscribers, generated $920 million in combined 2017 equity losses for corporate parents Walt Disney Co., Comcast, 21st Century Fox and Time Warner.

The SVOD service, which is 30% owned by Disney, Fox and Comcast, with Time Warner holding a 10% stake, generated equity losses of $531 million during the 2016 fiscal period.

Based on Comcast’s 10K regulatory filing, the media giant recorded an equity loss of $276 million in 2017, up 64.2 % from an equity loss of $168 million loss in 2016, and $106 million loss in 2015.

Comcast said the losses were driven by higher programming and marketing costs.

Indeed, Disney Feb. 6 revealed it expects more than $250 million in equity losses on Hulu in 2018. The revised projection is up from a previously anticipated loss of $100 million. Disney is on the hook for about $450 million in capital contributions to Hulu in 2018, according to a regulatory filing.

Disney, along with other Hulu corporate owners, expect to recoup the losses through content sales delivered by proprietary channels.

Regardless, BTIG Research analyst Rich Greenfield believes Hulu’s fiscal losses could reach $1.7 billion in 2018 – on top of an additional $1.5 billion in combined capital investment.

Greenfield says when Hulu’s relatively low loss to corporate owners was manageable, fiscal bean counters could spin the results. But as the losses deepen, Greenfield – in a blog note – wrote, “We have virtually no disclosure on the positive impact Hulu’s spending is having on its parent companies.”