Tag / DirecTV

by Frank Maduri

Comcast Xfinity Announces Free Streaming Box

The cable television and media giant, Comcast Corp, announced on Thursday that they will be providing all their internet-only subscribers with a free streaming box. The box, known as Flex, will compete with streaming industry stalwarts Roku, Amazon Fire Stick, and Google’s Chromecast products.

The move is aimed at providing access to Comcast and their vast content library to a wider audience of viewers as the company has consistently lost cable TV subscribers. The Wall Street Journal reported that Comcast as well as Verizon Fios, and their other cable competitors have lost TV customers who are “cutting the cord” in favor of getting their content from streaming only services such as Netflix, Hulu, or YouTube.

The report continues that Comcast has lost subscribers for nine consecutive quarters. The move to provide the Flex streaming box comes one day after Comcast announced the launch of their own streaming platform called Peacock, after the iconic NBC logo. The application will be provided free of cost to all current Comcast Xfinity television subscribers to bolster their content offerings.

The Peacock streaming application will most likely be offered to non-Comcast TV subscribers for some sort of fee-based structure. The announcement was not clear on whether the Peacock application would be free of charge for Comcast internet subscribers. It will launch in April 2020.

The Flex streaming box is also looking to compete with DirecTV Now and that streaming service that leads the way in some consumer reports. The point of difference for the Flex box is that Comcast used the voice control technology that won Emmy awards in their X1 remote from the Xfinity platform.
The interface of the streaming box is also similar to the menus on the X1 platform. The move is set to have Comcast become a new player in a crowded landscape. The way of the future in home entertainment is the streaming services and clearly is also the development of a streaming application to control their exclusive content.

The other development in the space is the launch of the Disney+ in November and the loads of new content and older content that is sought after, that is added daily. The company announced some reboots of former series and the launch of a new Star Wars themed series, that is fueling anticipation for this upcoming launch.

Facebook will not be left out of the mix, the social media giant announced a new version of the Portal that has the ability to stream television and other digital media content. The product will build from the success of the first version.

The announcement by Comcast is just the latest in a series of trends that consumers can expect other media companies following suit as they try to stay in the game of providing video services (as it is now known). The anticipation is that Verizon Fios will announce a similar technology as well as Optimum and some other major regional cable companies as the pendulum swings sharply toward streaming content over the internet.

The Flex box couple with the Peacock application represent the latest methods used by Comcast to stay relevant in a rapidly changing media environment. The months ahead will prove whether it was a sound investment.

(Some background info courtesy of Wall Street Journal)

by Frank Maduri

CBS Viacom Merger Impact

CBS and Viacom finally completed their merger after rumors over the past few years of joining forces, and more than fourteen years after the two companies had split apart initially. The deal follows about three years of drama around the various power players involved in bringing together two large media companies in an era of increased competition in the industry.

The new company will be split 61% to CBS stockholders and 39% to Viacom stockholders, and is estimated to generate $28 billion in revenue. It will be called ViacomCBS, will integrate content from both companies into the ever-popular area of streaming with the CBS All Access application.

However, the combined company will continue to license their programs to Netflix, Amazon, and others because of the enhanced revenue that can bring to their portfolio as well. The new content library is deep and their audience reach is massive, which will serve the new company well in negotiating for advertising dollars with the Fall TV season ready to begin soon.

The new ViacomCBS can compete in the space, but is dwarfed by Netflix ($136 billion in revenue), Disney ($245 billion in revenue), and Comcast ($193 billion in revenue) and one prevailing theory is that they are positioned now to acquire another media company to keep pace with the rest of the industry.

Some media industry experts have linked the newly merger companies to potentially target AMC Networks for consolidation. Some other reports have ViacomCBS in negotiations with Sony Pictures, Lions Gate (to purchase Starz), and Discovery Networks all as potential acquisitions that would help them compete with Netflix, Disney, and Comcast.

The immediate future revolves around integrating the personnel of both companies and determine who will take on some of the responsibilities of leadership in newly structured business units as well as on the corporate level.

The flipside to this deal is that some politicians have criticized the merger saying that it will limit competition, increase price of cable, satellite or streaming services. This observation is certainly justified based on the backdrop of the AT&T merger with Time Warner which produced some of those same consumer issues. WarnerMedia, the name of the new company, had content pulled from cable providers and available only on DirecTV, which is also owned by AT&T.

This maneuver has caused trepidation whenever media companies are consolidated or merged in the current climate. The CEO of the new company is Bob Bakish, and the Chairman of CBS is Joe Ianniello and they are looking to maximize some of the advertising revenue because they reach over 20% of all television viewers, and their strategy is trying to leverage that better as a combined entity in those negotiations with advertisers and sponsors.

CBS has also an uphill climb ahead of them with the harassment claims and the multiple reports of toxic work environment claims that have made headlines in recent years. The new executive team has promised a climate of “inclusiveness” and the company has made big changes to the CBS News division naming a female to the top executive post there, and installed Norah O’Donnell as the anchor of their flagship evening news broadcast.

CBS and Viacom have so many synergies that make sense in this deal, and the hope from their executive leadership and Wall Street analysts is that this new merged entity can usher in a new chapter for CBS amidst their struggles recently. The upcoming television season and the Fall “sweeps” period will prove whether or not this merger will begin a new day at the company, or if it will remain the status quo.

(Background courtesy of Business Insider, CNN, Vox.com, and Boston Globe)

by Frank Maduri

Content Wars: Disney Gains Full Control Of Hulu

The content wars in the media landscape, a frequent topic of past articles on this site, took a surprising turn on Tuesday with the news that Disney has obtained what the press release deemed as “full operational control” of streaming service giant, Hulu.

The analysts and other media experts had predicted that Comcast would try to oppose ceding full control of Hulu to Disney, especially given their contentious recent bidding wars for Sky TV and 21st Century Fox. Comcast owns 31% of Hulu through their subsidiary business unit, NBCUniversal.

The deal announced Tuesday between these two media goliaths is a “put/call”. The terms of the deal translate to provide mechanisms to both sides. Comcast could by January 2024 initiate the mechanism that would require Disney to purchase their 31% stake at a market valuation determined by independent analysts.

Furthermore, Disney could require Comcast to sell their stake if certain market factors are realized in the future. It depends upon the performance of the service and reports state that Disney has committed to a minimum value of $27 billion. Disney stock jumped Tuesday to over $130 per share and is nearing an all-time high based on the Hulu acquisition news.

The agreement also includes that Comcast will continue to stream Hulu over the X1 set top box and that Comcast has extended the rights to their NBCUniversal content to be streamed through Hulu for another three years. However, the fine print of the deal also allows for some of that content to be pulled in a year to be streamed through a Comcast streaming service at a later point.

The timing was very good for Disney as they needed to gain full control of Hulu at this point in time with the planned launch of the streaming service known as “Disney+” by the end of this year. Some analysts have predicted that the Hulu platform is where Disney will put some of their “non-family” content, which would make sense.

The deal makes sense for Comcast because the advertising revenue and the subscription bases for Hulu and Hulu Live TV services will both grow exponentially with the trend toward “cord-cutting” in the next four to five years. They will also have options on whether they want to pull their NBC and Universal based content in the future, once their streaming service is optimized. In the meantime, they will get a deal for sharing that content with Hulu from Disney. Comcast is going to get a big check from Disney in five years.

Disney has now stated that they plan to position a future offer to customers that “cord-cut” from cable and satellite a package to buy two or all three of their streaming services: Disney+, Hulu, and ESPN+ for a bundled rate. That is an interesting approach and signals the way of the future for television that is becoming increasingly customized and internet streaming reliant.

The agreement today puts pressure on the other players in the industry, especially CBS, which has to figure out how they will grow to compete in a world that is being dominated by Disney and Comcast. The DirecTV Now service is losing subscribers already to Hulu Live and You Tube Premium because DirecTV changed their packages for channel offerings and increased prices.

These changes alienated long-time customers and drove them to seek alternative service providers with better rates and packages. This deal today is only going to strengthen Hulu and their tiered offerings: $5.99 per month for commercials, $11.99 per month for commercial-free streaming, and $44.99 per month for Hulu Live television service which is a 60 channel package.

Disney took another step toward dominating the relatively new industry space of the subscription streaming services. It remains to be seen how the rest of the industry will respond, how it will impact the NBCUniversal streaming service set to launch in 2020, and what Comcast will do with the money it will receive for their stake in the “put/call” arrangement they made in five years.

One thing is clear: times are changing in the television programming industry.

(Some industry background information courtesy of: Fox Business, USA Today, and CBS Market Watch)