MediaFile

Netflix: The New Arch-Frenemy

Albanian Army marching in Tirana's main square (Photo: Reuters)

 

The Albanian Army is coming everyone, watch out!

We’re only into week 1 of big media companies reporting their quarterly earnings and the most prominent name hasn’t been CBS Corp, Time Warner Inc, Comcast Corp, and Viacom — instead it’s all been about Netflix.

Pretty much on each of these companies’ conference calls, the $4 billion company from Los Gatos, California was a key reason for a boon to the bottom line by supplying  ’found money’ by digital licensing of shows that would have been gathering dust on a shelf somewhere in Hollywood. But also on the calls for several of the same companies, Netflix was seen by analysts as a threat to their future. Let’s not forget the four who reported this week have combined market value of over $160 billion.

At CBS on Tuesday, which most people see as a broadcast and billboards advertising company, the first quarter was given a nice bump from its licensing of old CBS shows like”‘Cheers” but also by newer cable shows like Showtime’s “‘Dexter” and “Sleeper Cell”. Here’s the ever ebullient CBS CEO Les Moonves telling analysts on Tuesday how great Netflix and other copycats are:

“Content is forever and quality content never goes out of style. Nowhere is this more evident than the way we monetize our content digitally. In addition to the deals we struck with Netflix and Amazon, other online video distributors are looking to license our library content. These deals are having a big impact on our financial results, adding meaningful, very high margin dollars to our bottom line”

It was similar over at Time Warner Inc on Wednesday, where the now infamous Albanian Army quip was originally shared by CEO Jeff Bewkes. Asked to spell out the impact of subscription video on-demand services like Netflix going forward, Bewkes essentially said it’s a beautiful thing:

Change of plans: Redstone will make Viacom meeting

UPDATE: Sumner Redstone has changed his mind about next week’s Viacom annual meeting. The media giant’s executive chairman has reworked his schedule so that he can attend the gathering in New York.   On Thursday, company spokesman Carl Folta said Redstone had an “unavoidable commitment” that would force him to miss the shareholder meeting. “He was able to change his commitment and will participate in the meeting,” Folta said on Friday.   The previously planned absence had nothing to do with the health of the 88-year-old media mogul, Folta said. Redstone, who has majority control of Viacom as well as CBS, was seen publicly as recently as Sunday, at the Academy Awards in Hollywood.  Photo Credit: Reuters/Lucas Jackson

 

In Super Bowl streaming deal, Verizon scores again

What a delightful week this is turning out to be for Verizon. First, archrival AT&T decides it will ditch its $39 billion bid for T-Mobile USA (as if they weren’t grinning madly in the halls of Verizon’s Art Deco building down on West Street) and then they get a piece of this NBC deal to stream the Super Bowl.  No doubt, in the greater scheme of things the AT&T news trumps the streaming deal — but every little thing helps in the crazy competitive telecoms world.

Here’s the upshot: For the first time NFL postseason games — including the Super Bowl — will be streamed live online over NFL.com and NBCSports.com and over mobile devices through an app supplied by Verizon.  This is NBC’s deal;  Fox tells us they have “no similar plans” while we’re CBS declined to comment on whether they would do a streaming deal..

The advantage for Verizon is clear: It’s just one more differentiator. (Verizon has really been on a roll lately. Beyond the events mentioned above, they swooped in to buy a ton of cable spectrum for $3.6 billion and made headlines with their plans to take on Netflix with a streaming service).

Karmazin: I’d have sold Viacom but for Sumner

Photo (Reuters): Mel Karmazin, CEO Sirius XM

Sirius XM Satellite Radio chief Mel Karmazin on Tuesday stopped by the annual Reuters Global Media Summit to talk about his company, its future and to occasionally go down memory lane on a range of what if’s.

The 68-year old acknowledged that after roughly 50 years in the business he finally realizes that he’s not a good number two. He also proudly noted that he has no aversion to selling a company he leads if the right offer comes along. His track record backs him up on that claim. Karmazin sold Infinity Broadcasting to CBS in 1997, and then CBS to Viacom in 2000, creating enormous wealth for his shareholders in the process.

But there’s one deal Karmazin seemed to regret not having a chance to get done–selling Viacom. He admitted that given the opportunity and presented with the right price he would have sold Viacom when he was in charge. But Viacom’s 88-year old legendary leader Sumner Redstone, who has majority control over both that company and CBS, stayed at Viacom longer than expected. Indeed, Redstone still serves as Viacom’s chairman, outlasting Karmazin, who decamped to SiriusXM after three years of constant clashes with the octogenarian.

At CBS Sports, the good times are rolling

Many of us are looking forward to Saturday night’s prime-time match-up between Louisiana State and Alabama, the top two teams in college football. For a few hours, we get to set aside the craziness of conference realignment, forget about our own dismal teams (Boston College, this means you) and watch a good old-fashioned brawl between two storied programs.

But nobody may be as pumped up about Saturday’s game as Les Moonves, the CBS Corp Chief Executive who, it must be said, gets pumped up about a lot of stuff (ask him about NCIS sometime). Who can blame him — CBS Sports is bound to draw a blockbuster audience for the Southeastern Conference showdown.

“This weekend on our air we essentially have this year’s college football championship when number one LSU plays number two Alabama in prime time,” he said yesterday on an earnings conference call. “You don’t have to wait for the BCS in January this year to find out who the best team in the country is.”

Advertising weak? Quit worrying so much already

Viacom Inc’s not sweating it, Time Warner Inc. isn’t all that concerned. Why, CBS Corp and Discovery Communications Inc. are cool as cucumbers. Disney certainly sounds confident, as does Scripps Networks Interactive.

So why are investors and analysts — those Nervous Nellies of the financial world — so worried about the advertising market? Besides, you know, the fact that the stock market is getting smacked around, the job picture is just ridiculous, and the U.S. housing market is a wreck. Besides Europe’s debt crisis, which seems to have no resolution in sight. Besides the memories of 2009, when U.S. advertising spending dropped by 16 percent to $163 billion.

It may simply be that advertisers haven’t yet made the decision the cut budgets. But listening to all the top media executives at the Goldman Sachs Communicopia Conference this week left one with the impression that they are feeling pretty upbeat about advertising — and don’t expect any cuts in the near future.

File under acceptance: CBS knows it must pay up for the NFL

This time of year, it seems everybody loves football. The players, the fans, and, of course, the TV executives. And what’s not to like about football if you’re running a TV network, provided you have a deal with the NFL? Check it out, a total of 107 million viewers tuned into games between Thursday and Sunday on CBS, ESPN, Fox and NBC.

So it should come as no surprise that CBS Chief Executive Les Moonves, while speaking at today’s Bank of America conference, said he intended to renew the contract with the NFL when it expires in three years. “No surprise there,” he said. Indeed. The bigger question is what will CBS end up paying? Just last week, ESPN signed a new contract with the NFL at $1.9 billion a year. Repeat: $1.9 billion. That is about 73 percent more than ESPN previously paid the NFL.

As The New York Post’s Claire Atkinson points out in a story today, the ESPN deal has come under some heavy fire, particularly from the pay-TV industry, worried that it’s going to jack up rates.

When it comes to NFL, TV executives put on brave face

NFL players association members arrive for negotiations with NFL in Washington Mar 11 2011

Shrewd? Prescient? Delusional? Tough to know, but top TV executives this week all seemed relatively confident — even off the record — when asked about the chances that NFL games would be played this fall.

The background, of course, is that NFL team owners and players are at odds over salary caps and other issues, raising the possibility of a lockout and the cancellation of some or all of the 2011 football season. Very bad news, if you’re a fan or a network executive.

CBS: Get used to growth

CBS put on a big show in yesterday’s quarterly report, blowing out estimates on both profit and revenue. On the call that followed, Sumner Redstone called Les Moonves a “genius,” and Moonves called broadcast TV “the best game in town.”

Here are some notes from last night’s call:

    CBS, which said it would double its dividend, also plans to repurchase $250 million in stock this quarter. A nice bonus for shareholders who have already seen the stock rise by about 35 percent this year.
    Scatter rates, or prices for last-minute commercial buys, are up more than 40 percent in some cases for CBS. That’s a stunning number. Given those sorts of prices, Moonves is talking about “solid” double digit increases in upfront ad market next month.
    CBS is putting together six or seven fewer pilots than normal this year, showing that it’s pretty happy with its schedule right now (So far this season, CBS has declined the least of the big four broadcast networks in total household audience)
    Basically, investors and analysts should get used to these sorts of results, CBS suggested. Moonves said he was “confident” the first quarter’s performance would be “sustainable.”
    Part of that momentum is due to revenue CBS is getting from retransmission deals, which has been a big focus for Moonves. He said CBS would reach its goal of retransmission fees of $250 million by next year.
    What is more, “meaningful” revenue from its streaming deal with Netflix will start in second quarter.
    As for the outdoor division, Moonves said “we have no great intent to sell” it to JCDecaux, the French company that has it would be interested if CBS Outdoor came up for sale.  “Mr. Decaux, who we know very well and we like, makes statements about how he’d like to buy our outdoor company. As you know, our outdoor results as you can see are growing substantially quarter after quarter,” Moonves said on the call. “We are here, he has our phone number. If he wants to make an offer, we will always listen to it. It’s not our intent to aggressively sell.”
    And finally, there was bound to be a question about “Two and a Half Men” on the call. Moonves dodged it. “We don’t know what the resolution is right now. There are obviously a lot of moving pieces,” he said. He then added, “It’s an important show to us, but the good news about the CBS schedule is we are not dependent on a single show on any single night of the week.”

GlobalMedia-ABC News in talks with Bloomberg

MEDIA-SUMMIT/DISNEYThe news divisions at the big networks have been in a world of hurt lately as advertisers seek out younger consumers and viewers. This has lead to big cutbacks in staffing and resources over the years as the networks strive to keep profit margins from deteroirating even further.

ABC is certainly no expectation and has experienced managment upheaval when ABC News president David Westin announced in September his departure partly due to the financial situation and the pressure to increase profit margins.  

Speculation has persisted that ABC News parent company, Walt Disney, has been seeking to untie itself from the division– rumors that similary dog CBS.