Tag / TV

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

Follow Up: CBS / Viacom Merger News: The Saga Continues

The CBS and Viacom saga continues to loom within the media landscape following the sexual misconduct allegations against former CBS Chief Executive, Les Moonves, which led to him being removed from that post recently. This has caused many within the financial sector to have renewed speculation regarding the potential for a CBS merger deal with Viacom to get back on track.

In a follow up to earlier pieces on this topic, the interplay between CBS, Viacom, and their common parent company, National Amusements (NAI) has been a mess over the past couple of years. The struggle between Moonves and Shari Redstone from NAI and the discord that conflict created within the CBS board has shaped most of the news around this merger over the past several months.

The removal of Mr. Moonves from the equation seems to indicate that the merger will take place at some point between CBS and Viacom. This can be simply because no other external entity has indicated any type of interest level in obtaining CBS at this point.

The potential merger of these once-joined media conglomerates (CBS and Viacom were once under the same roof until they split apart several years ago) would make sense from a financial perspective as Wall Street analysts have stated that the merged CBS-Viacom unit would have a better valuation. Some analysts have estimated that the total valuation would increase in value between 20-30% compared to the two remaining single entities.

While that valuation impact is significant, the most critical issue facing CBS at this point is to find a new CEO. The reports have been centered around the likelihood that this candidate will be hired externally to bring a fresh perspective to the network and the corporation.

In my prior work on this topic, the dynamics between Ms. Redstone, Mr. Moonves, and Viacom head Bob Bakish were explored. The interpersonal issues between all of these figures has been at the center of the saga between CBS, Viacom, and NAI. The reports from multiple media outlets are that the new external CEO of CBS will be the individual in charge of the combined CBS – Viacom and not Mr. Bakish.

This added responsibility increases the importance for CBS to find the right candidate on what is probably a very short list of people who have the requisite skills and background to run such a complex, diversified combined media corporation.

The terms of the settlement in court between NAI and CBS stipulate that NAI cannot initiate any offers to consolidate CBS and Viacom for a period of two years. However, the settlement does not preclude either CBS approaching Viacom or vice versa, with a potential merger bid.

The likelihood of that happening after a new chief executive is named at CBS is seen as highly possible. In my prior work within this merger proposal saga, I have always maintained that Verizon would be the “dark horse” that would come out of the woodwork and purchase CBS for some inconceivable amount of money.

The media landscape has evolved though, and my view is starting to shift in thinking that Verizon may not be interested in CBS at all. They may not be interested in the capital outlay and the organizational changes that would need to take place in order to integrate CBS into the Verizon umbrella.

The other major networks and “old media” companies are out of the mix for CBS for mostly anti-trust reasons. Some have rumored that maybe CBS – Viacom combine and then merge again with a major studio such as Lions Gate or another television outlet such as AMC. In my view, that could happen because both CBS and an outlet like AMC would have to grow larger or else be swallowed up by another conglomerate.

The rumor that a “new media” entity such as Amazon, Apple, Netflix, or Google could snap up CBS seems unlikely at this point too. That sort of consolidation is delivered at a significant cost because of the complexity of the merger, the legal proceedings involved, and the integration of the key business units within CBS into an existing corporate and operational structure.

The content that CBS controls is a tremendous asset, and at the end of the day, content is king. The CBS app called All Access is a subscription-based service that has a robust base of viewers. It will be interesting to see if those variables are a motivating factor toward a “new media” entity taking a shot at consolidating CBS, especially if they would also hold the rights to the Viacom content.

The major shifts in the media industry this year have created a climate where CBS and Viacom both must make some sort of strategic growth move in order to stay relevant. It may become a merger of necessity rather than joining together willingly and with enthusiasm. The combined entity of CBS-Viacom would have certain strengths that would help them compete in an increasingly competitive and margin conscious industry.

The content and streaming app as well as other business units could position CBS – Viacom to better meet the demands of viewers that are changing the way they access media, television, and movies. The timing will all be predicated on how long it takes for CBS to complete their search for a new CEO.

The changes in the media and television industry has already seen some incredible M&A activity during 2018. The future for both CBS and Viacom could highlight the industry merger news in the new year ahead.

(Some background information courtesy of CNBC and AP)

by Frank Maduri

Follow Up: CBS Merger With Viacom Gets Contentious

The back and forth nature of the proposed CBS merger with Viacom has taken a turn that is very contentious. The discord centers around Shari Redstone, who controls National Amusements which owns Viacom, and Les Moonves the current top guy at CBS.

Redstone and Moonves had initially discussed, according to CNBC that Moonves would run the combined new entity for a period of two years. The reports widely distributed point to the source of the contention being control over the top management team selections. Moonves wants the authority to assemble his own team of people to run the newly combined company.

In addition, Moonves wants his longtime colleague, Joe Ianniello , to be his second-in-command at the combined venture. However, Redstone wants Bob Bakish (the current Viacom CEO) as the second-in-command to Moonves at the newly merged CBS-Viacom.

This comes down to relationships, which frequently is the lowest common denominator in these situations but also the most important one. Shari Redstone holds a great deal of authority here in this situation and she obviously feels strongly that Bakish deserves a “seat at the table” in the new entity.

The view and position of Les Moonves is also understandable, he and Bakish do not work together every day. Moonves and Ianniello work together daily at CBS and have a loyalty to each other that would most definitely serve the combined company well.

Furthermore, the rumor mill is swirling with media reports of Shari Redstone being prepared to let Moonves go and create a whole new CBS board. These developments make an already turbulent situation even that much worse. The executives at CBS have thought from the onset of the negotiations that the Viacom offer for CBS is undervalued.

Therefore, in addition to feeling “low balled” on the offer, they also feel like they are under attack by Redstone, and they are getting defensive in their posture of response. These are natural human emotions that are taking place with a mega-merger hanging in the balance.

The sticking point, from a business perspective and a public relations/investor relations perspective is to have an experienced executive at the helm of such a large and complex operation as the proposed entity of CBS-Viacom would represent. The analysts on Wall Street have confidence in Les Moonves in that spot, with Bob Bakish in that position or someone else with less experience, that would not produce a favorable response from Wall Street.

The other scenario at play here behind the scenes is the sentiment that Viacom needs this merger more than CBS does at this point. This notion has degrees of truth because Viacom has the need for a partner for their basic cable networks in order to gain better leverage in negotiations with cable and satellite providers. Viacom also has the Paramount movie studio which is losing money seemingly by the minute.

Conversely, CBS needs to position itself to compete within an ever-changing climate in the television industry. The merger would provide CBS with more content to drive on their CBS All Access streaming platform. It would also provide CBS with more “pull” with advertisers that are looking to gain exposure for their brands across multiple cable networks as well as national broadcast programing.

The faster they realize that they need each other, the faster this deal will come together. They need to solve this acrimony which exists around the selection of key appointments to the management team of the new entity. The two sides should consider some type of compromise because the experienced leadership Moonves could provide to the new combined company is not easily replaced. I would think they could find some type of important role for Bakish to play in the combined new company.

These connections, the loyalty, and the relationships that these key people have with each other could serve to make this merger be one of great success. It can also have the reverse effect and create a massive mess for a merger deal of this type and carry over through the initial years of the new entity. It remains to be seen which direction that this situation will head down in the weeks ahead.

by Frank Maduri

The Battle Over Sky News: Front Lines In The Media Battle Between Comcast and Disney

The financial news had some buzz around the potential for a bidding war between Disney/FOX and Comcast for Sky News/Networks on Tuesday. This activity signals what could be the opening salvo in a protracted battle between the major players in the television/visual media to play out across the next several months.

In this case, the asset is Sky News/Networks which has a viewership reach in Europe that is valuable for media companies seeking to expand their capacity and content distribution. In the current situation, FOX owns part of Sky and presented a bid recently to purchase the remaining stake it did not own.

Comcast jumped into the mix on Tuesday with an offer to purchase a controlling interest in Sky which represents a 16% higher valuation than the offer made by FOX. This situation is further complicated by the pending merger of Disney and FOX which essentially puts Disney into the driver’s seat on this deal because Disney would ultimately own Sky upon completion of the merger.

This means that Disney would have to evaluate the offer made by Comcast and decide whether they will propose a counter proposal for Sky. Many financial and merger experts with knowledge of the situation believe that a counter offer will take place and that Sky Networks will end up selling at a premium after a bidding war between Disney and Comcast.

Furthermore, the sentiment in the industry on Tuesday was that Disney might, in essence, lose the battle for Sky Networks, but “win the war” by securing some type of legal assurances from Comcast regarding the bidding for other FOX assets. Disney wants to avoid having bidding wars with Comcast over several different pieces of the now almost former 21st Century Fox properties.

It remains to be seen whether Disney can wrangle that type of agreement out of Comcast which would be unusual but not unprecedented. The general sentiment about the future of Sky is that they would be best suited with Comcast because it meshes better with their core business.

Many consumers visualize Sky as a news company, especially in America where we may have the channel as part of a cable or satellite TV package. The parent company, Sky PLC, which is what is at stake here in this potential bidding war between Comcast and Disney/FOX is much larger than just a news service.

Sky has a satellite television service, broadband service, on-demand internet streaming services, and telecommunications service offerings in the United Kingdom, Ireland, Austria, Germany, and Italy. This asset would increase the service offering capabilities for Disney with their new streaming application or for Comcast who is in the business of optimizing home entertainment, broadband, and telecommunications services.

Moreover, the much larger battle will revolve around the future of Hulu. The Hulu streaming service is owned partially by ABC/Disney, FOX, and Comcast (NBC). The proposed merger of the Disney and FOX assets would include their respective stakes in Hulu.

In fact, the potential to control streaming content through Hulu was one of the significant factors in the Disney bid for FOX according to a report from CNBC and Comcast could create some trouble in giving up their piece in Hulu in the future.

The total sum of this consolidation activity, amid the backdrop of Disney preparing for launch of their own streaming application service, will affect the consumer. The rights to content and the distribution of content will be the main driver in the way the consumer accesses all types of media. The control of that content into the hands of the few, is going to set the table for conditions where pricing can become prohibitive.

Disney, should the pending merger meet approval, would retain their 30% share in Hulu plus gain the 30% share held by FOX and would be the majority stakeholder in the streaming service which reaches over 30 million subscribers and has revenues from ad sales and subscription fees. It is also a significant asset that Comcast has invested money into as well and they may not be willing to just part ways with their stake. They could put Disney “over the barrel” for that last big piece of the Hulu business unit.

The overall health of Sky as a provider is solid, it is my understanding that the business growth in Italy was stagnant for a long period of time but that it has since rebounded. It remains to be seen if the change in ownership causes any noticeable alterations to the way that the customers in Europe will be serviced. Most merger and acquisition type of scenarios feature the potential suitors touting the benefits they would bring to the table.

This case is no different with Comcast essentially stating that they would improve the services offered currently by Sky and use their technology and service delivery expertise to help provide a better customer experience.

Disney has also made similar overtures in their bid stating how desirable Sky would be for them to reach European audiences in a new way, and that they would fully complete the consolidation of an asset that was held in part by FOX for a long period of time. They would look to build upon that tradition and reputation that FOX has built into the programming and content there, but the management of the other portions of that business are outside the scope of the core business for Disney.

The proposals for Sky News and the parent company, Sky PLC, are almost certainly going to create a bidding war between two media heavyweights: Disney and Comcast. This bid could very well represent the opening round of a war between the two entities for other assets contained both within the FOX/21st Century Fox business and outside of those businesses.

The stakes for the consumer are high because the control of content and distribution will both be up for grabs, and the costs for access to that content will have a definitive impact on the consumer in the future. It remains to be seen which side will ultimately emerge, but what is clear is that either Disney or Comcast will be growing even larger and more influential than they are today.

(Background information courtesy of Fortune, BBC.com, CNBC, Recode)

by Frank Maduri

How Cable and Satellite TV Providers Stay Relevant

I am contemplating switching cable TV providers, and I was thinking about how most of the people I know still have basic cable type packages; while others have done what is called “cord cutting” by eliminating cable.

Those people who cancelled their cable subscriptions stream content over the internet through one of the ever-growing number of streaming device options or Smart TV platforms. They utilize amplified antennas to get broadcast channels locally to supplement their program options.

I was at the gym running on the elliptical machine last week when a commercial came on while I had ESPN on during my workout. It was for the NHL Center Ice package which provides access to over 40 out of market games per week and works out to about $150 paid out over four installments for the season.

The advertisement put an emphasis on the ability to stream games from tablets or other devices as well, since that has become a critical value add for certain consumer demographics when it comes to media products such as this NHL package.

However, the flip side of that situation popped an idea into my head: who has time to watch 40 out of market hockey games a week? I would venture to guess that not too many people could do so, while affording the cost of the package and working. This is where cable remains relevant, and in the paragraphs to follow I will qualify that statement.

The NHL Center Ice or Game Center app does not allow full access to game highlights or condensed game packages without a subscription to the package or without a link to your cable subscription. Those who do not want to pay for the package or have cut their cable service completely lose out on hockey coverage or access to hockey content. This same example can be used for other programming or content available through cable and protected by those cable or satellite providers from those who have decided to “cord cut”.

The NHL Network channel is available only through cable or with a subscription purchased and offers the best alternative for those with a busy lifestyle because you can get all the highlights just by flipping to that channel on your cable box. It provides the ability for more casual viewing of the games as well.

The cable companies also stay relevant because having a cable subscription active allows for the best access to content from live programming that would air on a delay on a streaming device or app, to the ability to “live stream” certain content.

The implications of the Disney – Fox mega media merger as well as the proposed merger of AT&T with Time Warner can and will have an impact on the access to content of all types. The access to content and “protection” and restriction to content is going to shape the media in the next 5 years.
The handwriting is already on the wall, so to speak, with Disney spending truckloads of money to design their own streaming app that they will charge a monthly membership fee to allow access to their content. The recent proposed merger with Fox will expand the amount of content that they can potentially add to this application and restrict from distribution to other outlets.

The individual Time Warner group channels such as CNN, TBS, and TNT have all developed their own streaming content apps to appeal to a wider audience of those who have cut the cord.

The membership payment type apps for streaming are expanding as well with HBO, Showtime, CBS All Access, and the Hallmark Channel app called Hallmark Now ; these apps are all charging fees for access to their exclusive content.

The future of streaming television is going to consist of paying for the content from a multitude of different subscription based app content providers. The cable subscription will offer a potential “value add” because it will allow for access to the streaming content while potentially circumventing some of those subscription fees.

The future of cable and satellite television is unclear at this point as well. The “al a carte” approach that has been a concept that has been enticing to certain viewers is gaining a resurgence. This concept, where each individual household would pay only for the channels they would watch consistently, is largely cost prohibitive within the current cable/satellite TV business model.

The carriage fees (which is the amount the networks charge the cable companies to carry the channel) on some of these channels are a major barrier to this proposed solution. A good example is if your family would watch CNN, ESPN, and Disney channel to provide a mix of news, sports, and family programs. In the current model, the carriage fee is divided among all the subscribers for a respective cable provider whether it is Comcast or Verizon Fios.

The “al a carte” model would create a formula with a lot less subscribers so the fees would go up and your cable bill will follow suit. I have seen sample models where the earlier example provided would break down like this: CNN would cost $35 per month, ESPN would cost between $60 and $65 per month, and Disney would cost between $25 to $35 per month. That means for three channels plus your free network channels, your cable bill would be upwards of $125 to $130.

The carriage fees would have to change or the providers would have to offer more packages to bundle down costs.

In the end, as we approach the New Year, the way we watch TV will continue to evolve. The growing consensus from the consumer perspective is to cut the cord with cable. However, the cable companies and the media companies are largely becoming the same entities with all of the mergers happening in the media landscape.

This translates into a combination of a cable subscription (at least one cable box in your home) and streaming devices or Smart TVs that can stream content. This combination will provide access to the most wide- ranging amount of programming and provide a good value to the consumer.

by Frank Maduri

Return To Football & Media Companies Protection Of Live Sports Content

The NFL preseason is already three weeks old, and college football will begin traditionally on Labor Day weekend; football is back and for many Americans that means that they have something to watch on TV again. The excitement for the start of both a new college football season as well as a new NFL football season is tempered by the continued movement of media companies to protect live sports content.

The trend towards eliminating cable television service, or “cord-cutting”, is gaining momentum each year as Americans look to trim the monthly expenses in order to pay for rising costs for other services, such as healthcare. The “cord-cutting” trend has been aided by the prevalence of streaming television products and platforms available to the consumer.

However, the consumer that is looking to still utilize “live TV” can do so through a few different pathways: HD antenna, streaming devices, and hybrid streaming services. The HD antenna is very simple: it attaches next to your TV and provides the broadcast channels within the mileage range on the box. The antenna would provide CBS, NBC, FOX, ABC, CW, and PBS as well as a few more local stations.

The antenna would provide you access to live sports broadcast on the national networks, and would not include any games broadcast on cable television. This option would work very well for NFL football, and some college football games. It would be of little use to obtain access to any other major sports, other than an occasional game.

The local baseball, basketball, and hockey games are almost exclusively aired on cable regional sports networks or on national cable sports networks such as ESPN or NBC Sports Network. This leads us to option two: streaming devices.

The streaming device route or Smart TV route can provide access to a huge amount of live sports content, but most of that content is not free of charge. The NBA, NHL, and MLB all have streaming “apps” but they require a subscription to access. The streaming device route can also support “live streaming” of certain networks but most of that would require either a cable subscription or another type of payment arrangement to access that content.

The hybrid streaming device route would be a DirecTV now, Sling box, or a few other smaller services that allow for the content available on a very large package of channels to be viewed in other rooms in your home. This would require a subscription and at least one box connected from either a cable or satellite provider. This route may also require the purchase of additional equipment.

However, this setup would enable access to a significant amount of live sports content. The other service is through Hulu which will feature a package of channels for $40.00 per month which would allow for live streaming of network and cable television, including live sports.

The networks pay such a high premium for the live sporting events that it is, in some ways, understandable that they have put in place certain measures to make it more difficult to stream the content without a cable or satellite subscription. The challenge will be in adapting their content providing platforms to attract other audience/fan base demographics.

The younger generation is conditioned toward streaming versus watching any regular television programming. The advertising around some of the streaming services and apps can be a bit misleading. Some of the sports related streaming apps will give you access to certain content for free and require a fee or cable subscription for access to the most important content: the live game or archived game broadcasts.

The NFL has partnered with e-commerce giant, Amazon, to stream 10 games this year as part of the Thursday Night Football package. This exclusive opportunity with the NFL and their coveted live game content cost Amazon $50 million. The broadcasts are free for all those with an Amazon Prime membership which runs at $99.00 per year.

This agreement with Amazon is different than the agreement they had last year with Twitter for the Thursday night games because Twitter streamed them live for free to everyone with an account, Amazon requires a Prime membership for access. It will remain to be seen if that will have an impact on live stream viewership, either positively or negatively.

The future of sports content on TV, and other content on TV is trending more toward a structure where the consumer will pay to have all sorts of content streamed on a customized basis. The consumer access to a broad range of content will require membership to a wide range of services, similar to the premium channel cable TV subscriptions currently (HBO, Showtime, Starz, Encore). It is important to note that whatever service or method you use it is like the old adage: “there is no free lunch”.

A good example of this trend is the decision by Disney recently to end their partnership with Netflix to start their own streaming service. This translates into a scenario where in order to gain access to Disney content you will have to purchase their streaming service. I think that many other major media companies are going to follow suit.

The return to football means some exciting weekends relaxing with family and friends. It conjures up memories of past football weekends with the big college games on Saturday nights, and the CBS games at 4 o’clock on the East Coast with the aroma of a home cooked dinner in the background.

It is time for many of us to watch TV again, and I hope that this piece informed you on the best options that you have to access this content. I wish you all a happy and safe football season.

by Frank Maduri

Fall TV Season Reviews: Six Weeks In

The Fall television season is about six weeks into the schedule and with a review of the ratings to this point. I have done this the last few television seasons and reviewed ratings at the sweeps periods, and I have had some time for late night viewing of some shows on demand or via streaming services as well.

Those of you who have kept up with my blog here at Frank’s Forum are aware that I am not usually a fan of many of the new shows on the network slates in any given year. There have been a handful of shows that I would even recommend that any of you devote any of your valuable time to watching and following on a routine basis.

However, this season I am surprised that there are a few shows that have exceeded my expectations out of the gate. There are others that I have not seen but have read reviews from other writers whom I trust and have analyzed their ratings to know that they will most likely be cancelled.

No Bull

The first new show that I would recommend watching if you have not done so already is the CBS drama, Bull, starring Michael Weatherly of NCIS fame. I read a review of the show before it aired which was not very favorable, so I approached the pilot episode (which my wife really pushed me to watch) with trepidation.

I was pleasantly surprised, Weatherly is excellent as Dr. Jason Bull (a character adapted and based on the early life of Dr. Phil McGraw) who is an expert psychologist in the field of reading jury reactions in court proceedings. The cases are very interesting and thought provoking, the human behavior aspects are fascinating at points, and the cast is very strong. It is a very likeable show that will definitely entertain and is the character development, the writing, and the production are all excellently done. CBS has averaged around 17 million viewers and it is the top new show of the season for a reason, this program is poised to be another major hit for that network.

NBC Strikes Gold

I must admit that when I saw the trailer for the newest NBC drama, This Is Us, I thought it was a hastily produced fill-in for Parenthood which NBC ushered out of the lineup after a very strong multi-season run. However, this program written by Dan Fogelman is brilliant in the conception and the direction of the character arcs.

In an innovative way (without giving anything away to those who have not watched) it follows the lives of several people all at the same stage in life (mid 30s) and chronicles the unique challenges, joys, and heartaches that each has at that particular point.

The stories are woven seamlessly into themed episodes and the acting is excellent from Mandy Moore, Milo Ventimiglia, and the rest of the outstanding cast that makes this show the second most watched new series and a bona fide hit for NBC.

The only thing that could derail the momentum of this show (which has a massive social media following) is NBC getting involved from a top executive level and making changes to the creative direction or moving the time slot of the show (which that network does often) and it ends up ending in a loss of ratings.

This show is raw and real and very well produced, the writing is excellent, and it is well worth your viewing time.

Designated for Success

The ABC hit drama Designated Survivor looks like it is designated for a successful run on the network after very strong ratings to this point in the new television season. This newly launched show features Keifer Sutherland as the top billed star and the lone surviving Cabinet level official following a terror attack on the Capitol building during the State of the Union address.

I must admit two things: I did not like the premise of the show and the events that precipitate the conditions which the plot line launches, and I have not actually seen this program I have just read some very strong reviews about it.

I would think that it would have to appeal to those who like suspense and government spy type concepts to be the captive viewer for this program. I would tend to be of the opinion that if the ratings are this strong it is usually worth viewing the pilot episode and making a decision from there about it.

Kevin Can Wait

The new Kevin James comedy concept from CBS titled Kevin Can Wait has garnered some pretty strong ratings numbers despite being positioned to the male viewing demographic on Monday nights (opposite Monday Night Football).
In my opinion, the show has always struck me as a retread of the same antics that Mr. James used in his prior TV series hit, The King of Queens. I know that he has a loyal following of fans, but I personally think that you can wait on watching this series for the time being.

MacGyver It

I remember the original version of MacGyver and all of the wild scenarios that the lead character would get himself out of by coming up with some hair brained solution using normal items you would find around your house or garage.

The new CBS reboot which comes under the production guidance of Peter Lenkov (one of the guys who rebooted Hawaii 50 for CBS with great success) but the lead guy, Lucas Til, does not have the right look to be taken seriously as the new MacGyver.

The show has gained a pretty significant rating (the fifth most watched new series) but they will be walking the line between edge of the seat action and completely nonsensical, over the top stunts that could eventually drive away viewers.

Leaking Oil

Several returning shows are losing viewers like a truck leaking oil. The notables among those are two ABC programs Quantico and MARVEL Agents of Shield which will both probably meet with cancellation soon. In fact, ABC has another problem with a new series called Notorious (which is filling a lineup slot while Scandal is on hiatus due to Kerry Washington being pregnant) where the network announced they cut the number of episodes that will air already due to sagging ratings.

The TV industry calls that type of order reduction a quasi-cancellation, and so that series is definitely not worth your time.

The once popular series, How to Get Away with Murder has taken a tremendous decline in viewership this season to the point where it will most certainly be designated for cancellation in the near future.

The ABC network ratings overall have taken a big hit in a declining manner. They have to hope for stalwarts like Greys Anatomy and Modern Family to keep the ratings curve from bottoming out until they can begin production again on Scandal. The network will most assuredly also have a number of mid-year concepts that they will roll out in the winter for testing which could help buoy the ratings tide.

Deflated Ratings

The NFL once dealt with a major issue surrounding deflated footballs, it now has an issue with deflated ratings. The once gigantic ratings producing machine that was live NFL football game broadcasts are no longer the market leader they once were.

The NBC Sunday Night Football telecast was consistently the highest rated program of the week nearly every week that it aired for years. The telecast has experienced double digit ratings losses in 2016. There are some news media sources that track the ratings decline and tie it to the huge ratings that Sunday evening cable news programs are drawing due to the November Presidential election.

The other main national television “windows” for NFL broadcasts are down as well, Thursday Night Football is usually a reliable to be among the top five programs in the week and sometimes will crack the top three in the ratings charts. This season that package of games has also seen a double digit decline in ratings. This is driven by two factors: the matchups for the teams in most of the games have not been compelling, and the national anthem protests have also hurt the ratings for football overall as well.

The ESPN tradition of Monday Night Football has taken the most precipitous decline with viewership of their telecasts off as much as 25% from last season. That is a steep decline for a live sports content product as highly desirable as the NFL usually commands within the television industry. The biggest issue for this telecast and the other national television windows for the league is that the advertisers shell out some serious money for featured commercial time on these live game telecasts. The NFL ratings dip is cause for concern because they might hit the “giveback” territory in the numbers, where the advertising dollars get returned to the sponsors if the ratings decline to a certain threshold.

This type of scenario would impact the networks which pay huge rights fees to the NFL to broadcast the games. The league office in New York is reviewing the ratings decline, but it is certainly something fascinating because the numbers were once off the charts and now they have hit the wall.

Some of you may recall the piece I wrote on the oversaturation of the NFL on television. I wrote, once upon a time, about whether the league had reached a point where there were just too many games on TV and the impact that oversaturation would have on the ratings. It seems like we may have hit that point now.

The television season is still in the early stages, we have February “sweeps” and May “sweeps” periods left to go before all is said and done. We also have an election night in 12 days, and the holidays with specials and movies on the horizon. The networks have some shows they will keep for years, and others they will dump after a month or two. The major networks are split with CBS and NBC doing very well in overall ratings, while ABC, FOX, and the CW are in a ratings plummet that seems to get deeper by the week.

It will be interesting to see when we check in again around The Super Bowl and February sweeps, until then, stay tuned and keep streaming!

by Frank Maduri

“Must See TV” – NBC Gains Rights to Thursday Night Football

In reading the news earlier this week that the NFL had reached agreement on a new television contract for the Thursday Night package of games and that the rights to those games would be split between CBS and NBC; I could not help but think that NBC finally could reclaim their lost title of “Must See TV” for that night of the week.

 

I remember growing up that NBC owned the ratings on Thursday night, which continued into my high school and college years as well when the network cranked out new episodes of shows like “Friends” . Then later still it was “The Office” and a decent comedy lineup that anchored Thursday nights on “The Peacock” network.

 

However, that all changed for the network TV landscape with the advent of streaming devices and services such as Netflix, Hulu, and Amazon Direct that made live television viewing a concept of the past. The busy nature of people’s lives coupled with the fact that nobody works from 9 to 5 anymore, fueled that change towards the way we watch television.

 

The lone exception, as I have written about previously, is live sports programming. The ratings for sporting events of essentially any kind are “ratings gold” for the network which holds the broadcasting rights. The NFL takes this trend and puts it into essentially a “five times multiplier” with nearly all the top 10 most watched “programs” on TV in 2015 being NFL football games.

 

The ratings bonanza surrounding NFL games makes the addition of the Thursday Night Football package by NBC even more influential to advertising revenue and sponsorships that the network can attract. The network can also utilize “drop ins” to promote their own programs and events that are upcoming to a huge and diversified audience. NBC already receives a tremendous ratings boost through their agreement to broadcast Sunday Night Football which frequently is either the top watched program of a given week or in the top three spots. That ratings jump has boosted their overall viewership levels in the past and the promotional aspects of that broadcast have definitely had an impact on the ratings of their other programs.

 

Steep Price

 

NBC and CBS paid a steep price for the rights to broadcast five Thursday Night NFL games each over the next two seasons ($450 million combined between the two networks per year) which demonstrates the amazing draw that NFL live games have on advertising revenue for the networks.

 

In the case of NBC, they have been struggling to rebrand Thursday nights to compete with CBS and the other networks. They needed this share of the NFL package much more than CBS did, as CBS is the most watched network in terms of total viewership. Then, on the other hand, the fact that CBS has over the past two years pre-empted their regular Thursday night programming (in the Fall sweeps period no less) for NFL football demonstrates the enormous draw of the NFL. The shows in the regular CBS Thursday night lineup generate rating numbers that other networks can only dream about, yet CBS is committed to expanding their relationship with the NFL on that weeknight for two more years.

 

I must admit that following the ratings and the world of both media and sports business related topics, I did not initially understand why CBS would have paid the broadcasting rights fees that they shelled out for the Thursday night games initially two years ago. However, over time, I understood what the NFL and CBS were looking to do and subsequently accomplished with that initial contract. The league realized that the Thursday night games could be an attractive package to sell separately while keeping those games on NFL Network. They also identified a need to provide better promotion to both the games and the broadcast itself to make them look and feel like a “stand alone property”.

 

The addition of CBS Sports to that mix accomplished all of those objectives. The Thursday night games received an enhanced production value from CBS as well as their top announcing team of Jim Nantz and Phil Simms (who will continue to work those games in the new contract) CBS created theme music for the Thursday night telecast and cross-promoted the package very well to appeal to a wider audience.

 

Now, the Thursday night package will take another step in the evolution with the addition of NBC to the fold, and the NFL will gain viewers from cross-promotion efforts on NBC programming. In addition, NBC will most assuredly use their Sunday Night Football platform to promote the upcoming Thursday Night game so that will be a very effective marketing tool.

 

Streaming Sold Separately

 

The NFL also announced that with this new Thursday night television package they would be selling the rights to stream the games over the internet separately. The streaming capability was an aspect that both CBS and NBC were hoping would be included in their contract so that they could gain additional revenue from advertising on that platform.

 

The NFL will now begin negotiations for the streaming rights to the Thursday night games with the obvious players being mentioned in reports: Yahoo!, You Tube, Facebook, and Amazon. The NFL partnered with Yahoo! during the 2015 regular season to stream one of the games played in London between two subpar teams, the Buffalo Bills and the Jacksonville Jaguars, and the experiment was a huge success. It remains to be seen if the recent issues surrounding Yahoo! and their announced plans to cut jobs and shut down certain areas of their business will impact these negotiations. It also bears watching if Verizon will make an attempt to purchase the internet search giant outright (Verizon and the NFL have an exclusive agreement to show live local games on Verizon supported devices).

 

The recent Thursday night NFL broadcasting deal made two things clear: live sports programming is the gold standard which is keeping both network and cable television relevant, and that NBC finally has something deemed as “Must See TV” at least for five weeks out of the year.

by Frank Maduri

TV Wars: Aveo Loses Supreme Court Decision – Follow Up

In a follow up to a previous piece I did on this blog entitled “TV Wars”, the Supreme Court ruled today that the service known as Aveo should be required to pay licensing fees to broadcasters in order to display copyrighted programming. Aveo is a service that transmits broadcasts of TV programming over the Internet via their technology, which subscribers pay a fee to utilize.

 

The argument from Aveo’s side was that their service did not broadcast the programming to everyone over the Internet that the programming was provided only to their subscribers, who paid a fee to receive the service. Since it is not a public broadcast, then they should not be required to pay the licensing fee. The argument continued that they merely rented a small broadcast antenna to each of their subscribers to access the copyrighted programming, which should not require that they (Aveo) pay a licensing fee to the broadcasters.

 

The Supreme Court disagreed, they ruled that the Aveo service was just like a cable television service, which under the current system, are required to pay licensing fees to broadcasters in order to display copyrighted programming. Therefore, Aveo will be required to pay licensing fees to the broadcasters, which they cannot afford to do.

 

It is important to note that if the Court had ruled in favor of the current setup of Aveo, it would have completely altered the landscape of the television industry. A favorable ruling for Aveo would most definitely trigger the major cable television players to develop Internet based antenna rental services similar to Aveo in order to circumnavigate the payment of licensing fees.

 

A favorable ruling for Aveo also would have created a situation where the network television broadcasters would stand to lose huge amounts of licensing fee revenues. It would have created an environment where many people would continue to cancel their cable television plans, known as “cord cutting”, which would have created losses of revenue for the big cable television service providers such as Comcast and Time Warner Cable.

 

Status Quo

 

Instead, the ruling today effectively retains the current system and most likely marks the end of the Aveo service. Their CEO essentially stated that the ruling makes their business model unviable moving forward. The technology that Aveo developed does have an inherent value, which the ownership of Aveo will have to determine if they are going to sell off to an interested party in the future.

 

The ruling today by the highest court in the land also purposefully went out of the way to create a distinguishable difference between the Aveo service and other Internet based entertainment providing services and cloud based services. It is unclear at this point if they went far enough to make that differentiation and only future judiciary activity will determine that scenario.

 

This portion of the ruling opinion of the high court would deal with only certain new technologies and not others that I had mentioned in my original article on this topic. The larger internet based entertainment programming services providers such as Netflix and Amazon already pay huge licensing fees to the broadcasters and movie production companies to obtain the rights to stream copyrighted programming to their subscribers.

 

Big Business

 

In fact, the recent agreement between Amazon and HBO which provides the Amazon Direct internet streaming service with the exclusive rights to a huge catalog of HBO produced series was a deal with significant impact for everyone involved. Those types of exclusive streaming rights deals will only continue in the future, as the popularity of services such as Netflix, Amazon, and now Google’s Fire TV will continue to increase their respective subscriber bases.

 

These types of exclusive rights deals with the big internet streaming services provide a huge injection of revenue dollars to the broadcasters and the networks involved such as HBO or CBS. In fact, CBS syndicates and produces so many different series across a variety of networks that their stock increased on the news of the favorable Supreme Court ruling today.

 

In my view, that is what I take away from the decision today by the Supreme Court that the consumer in some ways is the loser here too. The Aveo service, as the dissenting opinion of the Court explained, was not providing a public display of content rather the service was provided to subscribers. Therefore, the three dissenting and more conservative justices felt that the subscription fee negated the need for Aveo to pay licensing fees to the broadcasters.

 

The Dissent

 

I would tend to agree with the dissenting opinion, the Aveo service was providing the consumer with another option to view broadcast television programming. It was providing choice and fostering competition in the Internet subscription based entertainment space. This decision is going to dismantle Aveo, and in many ways destroys the very ingenuity and entrepreneurial spirit which America should espouse.

 

I think of all the time, money, and energy that the employees and developers at Aveo dedicated to designing and marketing their service, which is a unique technology, and I think the Court ruling sends the wrong message to the small business owner or the entrepreneur. This type of service should be promoted and not dismantled, other business owners could see this news today and decide not to move forward with a new product or an idea for a new service, and that can and will be detrimental to our collective best interest in American society.

 

However, it should also be noted that I am in no way in favor of a service that would infringe upon the copyright protections that these broadcasters and networks operate within. The networks and television broadcasting industry spends a significant amount of money on the production and the copyright legal protections for their programming. I am in no way promoting a service which would violate any copyrighted programming and broadcast these programs to a general public audience in violation of federal laws.

 

In relative terms, as a writer, if someone took my copyrighted written material and put it out into the general public in a way which misrepresented me and violated my rights that would be a huge issue. However, that was not the issue at hand here, because the subscription fee and the manner in which the programming was presented by Aveo with integrity made this case a difficult one for the judiciary system necessitating a ruling from the Supreme Court.

 

This decision effectively rewards the big broadcasting companies and eliminates a source of competition for the huge cable television operators. We should be fostering competition in the marketplace, yet between mergers and acquisitions and increased regulatory activity, the government is eliminating competition from our marketplace. This type of activity could prove ultimately detrimental, as we have seen in the course of history with monopolies in various industries in the past.

 

This ruling today is being reported by the media that it has moved the TV landscape into a state of clarity and removed some ambiguity. I disagree with that sentiment, I think the ruling today was only the beginning of another mountain of litigation driven by the broadcasters and networks and the groups which represent their collective interests with the goal of elimination of competition from the marketplace.

 

This ruling did not push our court system towards the end of the TV wars, in fact, I would argue, it is just the beginning.

 

 

(Some background information courtesy of Yahoo! News)

by Frank Maduri

Television Wars: The Future of Home Entertainment

The rapid technological advancements in the mass media are causing a shift in the way in which the general public will utilize their home entertainment. The advent of Apple TV changed the landscape when it hit the market, and other streaming services and content providers are looking to continue to shape the market in the future.

 

In order to compete in the marketplace with Apple, Google launched their own product, Google TV, back in October 2010. In the years since then, the number of content providers and subscription services for the distribution of television programs and movies exploded. Google has since renamed their product after their “Chrome” product platform.

 

Now the landscape is crowded with systems such as Aveo, Roku, and Slingbox as well as subscription content providers in Netflix, Hulu, and Amazon Direct Video. These products and services coupled with the telecom companies’ movement into the television market with products such as Verizon’s FIOS, and AT&T’s UVerse, and the television wars have officially begun.

 

All of this content is transmitted by a signal today, and these companies and service providers are going to compete for the right to send their signal to your home. It happens every day if you have cable television service through a company such as Comcast, and you receive calls and emails from Verizon trying to entice you to switch to their FIOS service.

 

“Binge watching”

 

I have written about the evolution in the medium of television in the past, but I was thinking about all of these changes again over the Christmas/ New Year’s holidays when I had some time to unwind and watch a couple of movies.

 

It is still incredible to me that through a service such as, Amazon Direct, you can watch whatever movie you want in their catalog, or you could “binge watch” a television series you may have never seen before from the start of the series all the way through to the end, in sequence, with no commercials.

 

This approach to watching a series is the new trend in television viewing, and the broadcast networks as well as the cable, satellite, and telecom providers are increasingly aware of this viewer preference. They are providing their viewers or subscribers with several different ways to “binge watch” their favorite programs through video-on-demand services, streaming of both old and new episodes on the network website, and providing access to the show via subscription content providers such as Netflix or Hulu.

 

This method of viewing an entire season or an entire series run of episodes is very appealing to Americans, who like the freedom to watch whatever they want, at whatever time they want to watch it. The days of “appointment TV,” when you had to be home at a certain time on a certain night because the show was something the viewer could not miss, are over. The average person is too busy today with all of the new technology and the demands of their respective careers or families for that approach to be viable anymore.

 

In this case the network and cable television broadcast companies got it right to capitalize on the marketing of these new platforms available to stream content and expand the viewership of their programming. These same executives have missed the mark at other points and have alienated viewers in the past. The networks, at another point in time, would have considered restricting access to their programming to their own detriment; though they continue to favor subscription services rather than Aveo and some other services that tend to provide the content for less money.

 

Some say the networks were smart to provide their programming content via the Internet and other platforms. However, I think they really had no choice because if they did not provide the content, they would have lost many viewers, so they did so for their own survival.

 

In fact, some people have already “cut the cable cord” and are using these other devices and services rather than paying for a cable or satellite service for television in their homes.

 

Original Programming

 

The other trend which will also serve to further accentuate the competition for viewers is the push toward the development of more original programming for the new age outlets such as Netflix, Amazon Direct, and Chrome TV.   The appeal for the high profile actors and actresses in Hollywood to sign on for original programs on these new formats is two-fold:

  1. The content providers have lots of cash to shell out to produce their own programming and pay the stars associated – so money is a key factor
  2. The rules for the content they can produce are different than if they did a mainstream show on a major network or a basic cable program. The rules for what they can display are similar to a series produced for a premium tier cable channel such as HBO or Showtime. That freedom from normal regulatory constraints is very compelling to certain stars to be able to work on a show that is unvarnished and bold.

 

Some of these programs have been successful already in their limited runs, which has only served to fill the pipeline with more concepts for future development. Netflix recently announced that they are developing original programming for children, which opens up a whole new avenue to market their service to families.  Amazon is working a few new original programming concepts as well.

 

The two other recent developments that have further continued this trend of original programming is the news of the Disney deal with Netflix, and the potential for exclusive sports programming moving to these new media service providers.

 

The Disney deal with Netflix will eventually provide for Disney movies to be available exclusively through a subscription to Netflix in probably about four years from now. However, Disney owns Marvel Studios and the rights to most of their comic book characters. Marvel and Netflix will be producing at least four original series, each focused on a single character, for release in the near future (www.usatoday.com).

 

The recent announcement by the NFL that they are strongly considering the addition of another tier of playoffs is rumored to be driven by the strong interest and deep pockets of Apple TV and Google to land the digital rights to sporting events, particularly the NFL (www.money.cnn.com).

 

These types of digital rights deals are going to be the future of professional sports viewing as well, and it serves as another reminder that the world is rapidly changing. The business activity and marketing campaigns have also made it abundantly clear: these changes are here to stay.

 

In addition, as these properties continue to advance they will get monetized differently, and as some have seen with certain programs on Hulu, you will have commercial interruptions on certain programs. The advertising agencies and the networks will find ways to deliver their sponsor’s message as these services grow more prevalent in the future.

 

So whether you have Netflix, Hulu, Amazon Direct, or all three services; I hope you enjoy the viewing options for content that they provide because in the future it is only going to get bigger and better.