Blackout averted, for now!

There was no resolution, just delay, in the contract talks between Charter, the MVPD, and Comcast, the content owner, over carriage of NBC-U programming on Charter's distribution pipes.

See:  http://delivermyshows.com/

Will today be the day that…

Comcast cuts the cord (feed) of its NBC-U channels to 17+ million Charter Communications customers? 

Emboldened by its scale and negotiating heft after its 2016 purchases of Time Warner Cable and Bright House Networks to become the second largest cable/broadband provider, Charter is pushing back on a proposed deal offered by Comcast to continue carrying its valued content, including NBC, CNBC, MSNBC, Bravo, and Telemundo. 

Will one firm blink before the highly anticipated professional football game between the Green Bay Packers and Detroit Lions airs on Sunday night?  Since the largest MVPD, Comcast, does not compete in local markets against the third largest MVPD, Charter, the beneficiary of a badly-timed or prolonged dispute could be AT&T/DirecTV.  At least this time around!

Next Up...DirectTV NOW!

Why do I need my traditional cable service anymore if DirecTV Now gives me what I want (with the exception of CBS) with no cable box?  AT&T says it is going after 20M non-Pay TV households (the cord-nevers), but won’t this appeal to Pay TV households (like me) who may finally consider cutting the cord?  The Verge

The problem is that a part of me (a large part of me) feels like this is a bait-and-switch.  I can feel like I’m getting the same or more of what I want for less, but the day will come when I will be back to where I am now…paying a lot of money for too many programming options.  So, I do nothing (for now).  Exactly what AT&T wants me to do! 

What do we know or suspect a Trump presidency will mean for broadband?

Net Neutrality, solidified by the 2015 classification of wireline and mobile ISPs as utilities, will certainly be weakened, if not overturned.

http://arstechnica.com/tech-policy/2016/11/trump-will-have-no-shortage-of-options-for-attacking-net-neutrality/

Money is going to infrastructure and so we can assume (maybe) that some of that will go to broadband infrastructure to ensure (at some point) that 100% of the US population will have high speed broadband access (wireline or mobile).  The urban/rural divide is huge and Trump has to reward those rural voters who supported him in 2016.

Back together again?

According to news reports over the past few days, CBS is considering re-merging with Viacom after an eleven-year split.  Why?  In a media landscape that is increasingly becoming (or possibly becoming) more concentrated in both programming and distribution, this is a “have-to” move for the firms.  

In negotiating carriage agreements with distributors, a combined CBS/Viacom will have greater heft in those negotiations with its portfolio of television and film assets.  Will it be enough or is this phase one in an ultimately plan to do what Comcast did and AT&T is trying to do --- be a “player” in both content and distribution.  Time will tell!

A Prisoner's Dilemma in PayTV

Last week, the DOJ announced that it filed a lawsuit against DirecTV for orchestrating and agreement among its MVPD competitors to not carry the Los Angeles Dodger’s channel distributed exclusively by Time Warner Cable (TWC).  In this one-period, simultaneous move game where each competitor (DirecTV, AT&T, Cox, and Charter) was “separately” negotiating a carriage agreement with TWC, the dominant strategy was to pay the high price (estimated at $4.90/month).  It was in their collective interest (“optimal”), however, to negotiate a lower price for the channel or to not carry the channel at all.

In a game of uncertainty, each firm would play its dominant strategy.  To get to the optimal outcome, information on what competitors were up to and assurance to “stick with the plan” was needed.  Allegedly, DirecTV filled that void.  

NYTimes

What the AT&T-Time Warner Merger Might Mean

The last two years have been characterized by horizontal mergers in the PayTV/Broadband industry.  And, with the exception, of the Comcast-Time Warner Cable (TWC) deal, regulators have approved them.  Looking forward, this may be the year of the vertical merger, partly out of mutual necessity, partly due to the fact that there are few horizontal pairings left that regulators would approve.       

Video distributors and content owners need each other.  So, when AT&T, one of the largest distributors of content (via PayTV, broadband and wireless) brings content in house, the concern is that competitive content providers (e.g. Viacom, 21^st Century Fox) will be disadvantaged, particularly in terms of access to customers.  In recent years, carriage disputes between distributors and content owners have become more commonplace and nastier.  A vertically-integrated distributor with a large national footprint increases its leverage in these negotiations.  (Comcast bargains from a much stronger position than Altice USA (Cablevision).)  Could this merger stem the tide of rising programming costs that are largely to blame for higher cable bills and cord-shaving/cord-cutting?  Doubtful.  What is certain?    Lower prices, more choices, and innovation will come from more competition, not less.  The good news is that consumers are “going outside the box” and getting content from indirect competitors.  The reality, however, is that those competitors still need to get to customers via the pipes controlled by the likes of AT&T and Comcast.  (Note: Google Fiber is slowing its expansion.)

Another risk is in the other link of the supply chain.  It could be argued that competitive distributors (e.g. Charter, Verizon) could be withheld access to the vertically integrated media giant’s content at reasonable prices.  For regulators, this was one of the major concerns with the Comcast-TWC merger.  AT&T’s strategy of increasing its breadth with its DirecTV acquisition before its vertical stretch into content may have been in consideration of what went wrong for Comcast, a vertically-integrated firm (with valuable NBC Universal content) trying to expand its subscriber base.  

The Street