from DealZone:
No longer just a dumb pipe
Comcast's deal to buy a majority stake in NBC Universal from General Electric should put to rest fears at the cable operator that King Content will kill its business. But even if it becomes a thoroughfare of programming genius, the new venture will still have to convince a skeptical marketplace. The train wreck of Time Warner-AOL threw the idea of new media into financial purgatory.
Just how the venture will wring savings from its disparate businesses and avoid suffocating regulatory scrutiny are issues that could also create Comcastic headaches. Robert MacMillan points out on our Mediafile blog, with a sensible dose of skepticism, that the new venture is affirming its commitment to local news, in effect, promising to keep the garden hoses pumping even as it primes for a media gusher with big-ticket programming.
Still, while making a new media juggernaut could still turn out to be a pipe dream, Comcast CEO Brian Roberts (pictured above) cannot be faulted for allowing his company to get stuck in a dumb pipe nightmare.
Time Warner Cable ready to fight high program costs
Time Warner Cable, the normally placid No.2 U.S. cable operator, is getting ready for a fight with its programming partners at the cable networks and broadcasters over rising affiliate fees. In truth, TWC has always been ready for a fight with the programmers. This time, it wants to make the first move and get its 14 million subscribers behind it.
The New York cable operator is launching an ad campaign “on behalf of its customers” to target what it sees as unfair price demands by programmers. It argues that these price demands, which usually come around this time of year at the end of programming contracts, can sometimes be as much as 300 percent increases. TWC says programmers make the demands “secure in the knowledge that video distributors are the ones who have to pass those costs along to customers and take the blame.”
So what’s Time Warner Cable going to do about it? They’re going to launch a website — yes, a website with the catchy URL: www.rolloverorgettough.com. News Corp, Sinclair Broadcasting and cable networks must be quaking in their collective fee-hiking boots.
(For the uninitiated: One way for companies to make money from their shows is to charge cable operators for the privilege of distributing them. Programmers like to raise those fees every so often. When cable operators resist, shows you like have a way of being held for ransom and sometimes disappearing for a while.)
Time Warner Cable’s website will allow customers to give their feedback and will be supported by ads in newspapers, TV and the Web.
“We want them to know why we fight so hard on these issues – if we Roll Over, they pay the price. If we Get Tough, they may lose their favorite shows until we reach a reasonable agreement.” said TWC CEO Glenn Britt in the press release.
It’s not the first time Time Warner Cable has tried to be principled about not overpaying for content. You might remember the great “Why is SpongeBob crying?” campaign of Dec 2008 when Viacom and TWC fell out over rising carriage fees.
I’m disturbed by this campaign. I’m a consumer and frankly Time Warner is the premium cable operator in my area. I pay almost 50% more for their service. They need to roll over and provide the channel lineup they commit too, or simply reduce the channels they offer and make their price competitive. Lets face it. Whatever results are garnered from this study could easily be overinflated. This is nothing more than a sob-story play by them and the customer’s concerns left on their “survey” site will likely be screened and only those aligned with their corporate strategy will be passed along to the broadcasters. Time Warner comes across as a sissy crybaby on a playground during recess in this campaign instead of acting like a national corporation. The Fortune 500 company I work for (Finance industry) would never advertise in such a shady and biased way. Shame on Time Warner. Sell commercials during these slots to make up your losses instead of pandering to customers for unjust sympathy.
from DealZone:
DirecTV adds to media merger excitement
With media titans GE and Vivendi still negotiating a deal to bring cable operator Comcast into a mega-media joint venture, a management move at DirecTV is giving dealwatchers a fresh programming alternative.
Yinka Adegoke and Sinead Carew report the appointment of PepsiCo veteran Michael White (pictured below), who has no experience in pay TV, as DirecTV CEO is being read as a sign the company's parent, Liberty Media, just wants a baby-sitter until its sells the operation in the next couple of years.
Telecom leaders Verizon and AT&T approached Liberty earlier this year, they report. Both have cross-marketing deals with DirecTV and would leapfrog the rest of the market with the addition of DirecTV's subscriber base. But fears of insurmountable regulatory resistance put those talks on ice.
Liberty Media shareholders are set to vote this morning on a plan to split DirecTV from Liberty Entertainment -- a move that Wall Street believes could pave the way for a telephone company to put in a bid for DirecTV, leading to a similar bid for smaller rival Dish Network.
If Comcast gets its content pipeline connected to NBC Universal, the pressure on the telcos to boost subscribers could get them to test the regulatory waters again.
