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Monthly Archives: May 2013

DISH Network Makes Bid to Own Clearwire Outright

Satellite television provider DISH Network made its bid on Wednesday to acquire the half of Clearwire Corp. that it does not already own. DISH’s bid of $4.40 per share (for a total of $6.9 billion) is about a third higher than Sprint Nextel Corp.’s bid for the company. DISH Network wants the company’s wireless spectrum to further deliver services in the future in order to broaden the company’s business beyond simple satellite television.

More from the Seattle Times:

Englewood, Colo.-based Dish also offered to loan Clearwire up to $800 million in exchange for notes that would bear a low 1 percent annual interest rate, but allow Dish to exchange the notes for Clearwire shares at a ratio valuing them at $2.50 per share. Dish also extended its offer to minority shareholders, saying it would accept their shares if it was able to acquire at least 25 percent of all shares and have a say in how Clearwire is run.

Clearwire has said it tapped into financing from Sprint in the form of convertible notes.

Clearwire’s board had recommended that shareholders vote in favor of Sprint’s bid before Dish’s latest offer Wednesday. The wireless carrier raised its offer by 14 percent, to $2.5 billion, last week. Sprint, based in Overland Park, Kan., is Clearwire’s only major wholesale customer, and uses its network to provide “Sprint 4G” service.

Dish, eager to get into the wireless business, has also offered to buy Sprint for $25.5 billion, but it is competing in that bid with Japanese wireless phone carrier Softbank.

Earlier Wednesday, Sprint and Softbank said that U.S. regulators said there were no national security issues with Softbank’s potential $20.1 billion purchase of Sprint, paving the way for the Federal Communications Commission to complete its review of that deal.

DISH Network is the second most popular satellite TV provider in the country, and by acquiring more wireless space could compete with DIRECTV for the number one spot.

Amazon Gets into the TV Game with Original Series

Amazon has thrown its hat into the ring alongside Netflix as competition to cable TV, greenlighting its first original pilots to series. Two comedies pitched towards adults and three children’s shows will be available on Amazon’s Prime Instant Video service later this year. Amazon chose the pilots based on customer feedback.

More from Multichannel News:

“We are thrilled at the enthusiastic customer response to our first original pilots,” said Roy Price, director of Amazon Studios. “We built Amazon Studios so that customers could help decide which stories would make the very best movies and TV shows. It’s exciting to see the process in motion, doing exactly what we set out to do. The success of this first set of pilots has given us the push to try this approach with even more shows-this is just the beginning.”

The comedy Alpha House is about four senators turned unlikely roommates, starring John Goodman and written by Gary Trudeau; Ed Begley Jr. stars in Betas, which follows four young entrepreneurs attempting to strike it rich with a new mobile social networking app.

The kids series are Annebots, about a kid scientist and her robots; Creative Galaxy, about an alien artist; and Tumbleaf, about a whimsical fox searching for an adventure.

The star power involved with the creation of these shows demonstrates that it’s not only consumers who are sick of the current cable TV landscape, but show creators and actors as well. If these Amazon Prime Instant Video series are successful, we will likely see other online powerhouses creating their own original content for streaming, and becoming a real threat to the cable TV status quo.

That said, it’s still an experiment, and it’s unlikely customers will sign up for the service just for these new shows at this point in time. Netflix already had a built-in audience for its original series. So we’ll see.

ESPN Adds More Cable TV NFL Coverage with ‘NFL Insiders’

The NFL rules the sports world, and ESPN is the Worldwide Leader in sports broadcasting, so it makes sense that the cable TV network will be adding yet another studio show covering the National Football League. NFL Insiders will make its debut August 5. The one-hour show will be hosted by Suzy Kolber and feature NFL information gurus Adam Schefter (who has more than 2 million followers on Twitter) and Chris Mortensen, with additional reporting done by John Clayton, Ed Werder, and former NFL front office players Bill Polian, Phil Savage and Billy Devaney.

What sets this studio show apart from the dozens of other NFL shows on ESPN, NBC Sports Network, and NFL Network? No former players allowed.

More from the ESPN Press Release:

NFL Insiders will examine the league from the perspectives of people who make decisions and from those who are first to report the news. Scheduled to debut Monday, Aug. 5 – the day after the Pro Football Hall of Fame game – the new show will replace NFL32.

Chris Mortensen and Adam Schefter, two of the most respected reporters in the NFL, will be featured prominently on NFL Insiders and will have an even greater platform for breaking league news. Fans will also gain an inside look into how teams operate from six-time NFL Executive of the Year Bill Polian, who has more than a quarter century of front office experience. Veteran host/anchor Suzy Kolber will host the show from ESPN’s Bristol, Conn., headquarters.

“There is nothing more stimulating for a reporter than when you know you’re about to tell somebody something they haven’t heard until that very moment,” said Mortensen. “This is the essence of what Adam and I and this great team of contributors will bring each day to NFL Insiders, and we’re excited to get started.”

It will be refreshing to see NFL news broken without the blustery commentary of the stable of former players ESPN employs.

The ESPN family of networks is available on DIRECTV on channels 206-210.

Time Warner Cable Not Expanding into Rural New York Areas

Despite the work of many in local, state and federal governments to expand access to high speed internet to more rural parts of the country, many areas are still unserved or underserved. One example of this is the rural New York town of Arcadia, where many outlying portions of the town lack high speed internet, digital cable TV, or any of the other services offered by Time Warner Cable, the service provider in that part of the state.

More from WaynePost.com:

Time Warner representative Chris Mueller attended the last Arcadia Town Board meeting at Supervisor Dick Colacino’s request. Colacino hoped Mueller would be able to explain why services weren’t available to residents in outlying areas.

Colacino was disappointed with Mueller’s explanation.

“I’m very unhappy,” he said. “There’s no good reason why they can’t expand it down one or two roads a year.”

As Mueller explained it, Time Warner works all 23 municipalities in the county to bring their services to residents through franchise agreements. The agreements grant a percentage of the cost paid by Time Warner customers to go back to the municipality to cover costs for any maintenance or work highway crews perform on the lines in the event of a storm, for example, Colacino said.

The state Public Service Commission has specified that service must be available to areas where there are 35 homes per mile within 150 feet of the road, Mueller said. Time Warner has reduced that number to 20 homes per mile in attempt to accommodate less-populated areas in the county, Mueller explained. However, there remain areas in the town that don’t meet even that standard. At a cost of $22,000 per mile to run cable above ground, Mueller said it isn’t financially feasible for Time Warner to make the investment.

The costs of such endeavors mean that private companies, without prodding from powerful governmental entities, will not expand. It is necessary for governments to step in and act, as having access to high speed internet is important for education, commerce, and other reasons.

Cable Sports Giant ESPN Lays Off Hundreds

In their first major reduction in personnel since 2009, cable TV sports giant ESPN is laying off a large portion of staff, with jobs lost numbering in the hundreds. At this time, ESPN is not saying how many employees are being let go; these layoffs follow a number of high-profile sports rights deals, with some speculating the layoffs are to increase profits after having to shell out for more live sports programming. Currently, ESPN is one of the most profitable cable channels out there, with its rights fees constantly bringing up the price of cable for cable and satellite TV subscribers.

More from Multichannel News:

“We are implementing changes across the company to enhance our continued growth while smartly managing costs,” said ESPN in a statement. “While difficult, we are confident that it will make us more competitive, innovative and productive.”

Deadspin is reporting that most of the layoffs are coming in the technology sector.

The pink slips follow ESPN’s recent announcements of a pair of new pacts. Last week, ESPN said that beginning in 2015 it would gain exclusive rights to the U.S. Open tennis championships. Sources indicate that the 11-year pact is valued at some $75 million annually, or $825 million, up from the $20 million ESPN is paying per year for current cable rights to the Grand Slam tournament.

Earlier in May, ESPN and the Southeastern Conference announced the long-anticipated SEC Network. The deal extends and expands their rights agreement another 10 years beyond the extant pact under which the programmer had been scheduled to allocate $150 million annually through 2024. New financial terms were not disclosed.

The worldwide leader also announced at its May 14 upfront presentation to advertisers that it would open a new state of the art studio at its Bristol, Conn. headquarters — at a reported cost of $125 million — next year.

During its second quarter ended March 30, The Walt Disney Co. scored a 32% rise in net income to $1.5 billion as its cable networks, including ESPN, turned in a strong performance. The cable networks’ operating income rose 15% to $1.7 billion thanks to growth at ESPN, which had increased affiliate revenues and advertising sales that were partially offset by higher programming and production costs.

So, will these layoffs mean ESPN will no longer be as expensive to carry? Of course not. Just like the employees, cable and satellite TV subscribers will continue to lose.

Cable and Satellite TV Installation Firm Multiband Corp to Sell

Multiband Corp, a cable and satellite television installation firm based in Minnetonka, Minnesota, will be acquired by Goodman Networks of Plano, Texas for $116 million in cash. Multiband was a publicly traded company having trouble operating, with remaining publicly traded becoming burdensome and expensive. The consolidation will make the company part of Goodman Networks, which is privately owned.

More from the Star-Tribune:

Goodman Networks is a privately held company with $650 million in annual revenue and 1,700 employees. The company has publicly traded debt, and in an annual report filed with the Securities and Exchange Commission on April 26, Goodman Networks said it would pursue strategic acquisitions.

In the same filing, Goodman Networks said that the fragmented market for network and infrastructure service providers creates a “compelling consolidation opportunity.’’ Goodman Networks completed the acquisition of the Custom Solutions Group of Cellular Specialties Inc. for approximately $18 million in February. The deal for Multiband would be Goodman’s largest acquisition.

The agreement gives Multiband 45 days to solicit alternative bids with Goodman Networks eligible for a breakup fee of $5 million to $6 million. The deal was approved unanimously by the boards of both companies, and the deal is expected to close in the third quarter.

According to a news release issued by Goodman Networks, Multiband would be operated as a subsidiary of Goodman, and Multiband CEO James Mandel would continue to run the business.

Multiband installs satellite and cable TV for homes and apartment buildings, and also provides design services for telecommunications firms and for wind and solar energy companies.

“We are optimistic about the proposed acquisition of Multiband for several reasons,’’ a Goodman spokesman said in an e-mail to the Star Tribune. Goodman provides installation and design services for customers like AT&T and Sprint and Multiband delivers expertise in the cable and satellite space “that we believe are truly complementary.’’

Consolidation in the cable and satellite television business is common. Look for more companies to consolidate as time goes on.

New Xbox Could be Cable Box Replacement

The new Xbox was revealed with the official console announcement earlier this week. Microsoft has not yet announced relationships with any cable television or satellite TV providers, but it is likely that the console maker will team up with a number of cable operators in order to replace their set-top boxes with the new Xbox to deliver content through an online portal.

More from WorldTVPC.com:

One currently being rumoured for such treatment is Time Warner, with the new Xbox’s ‘multimedia capabilities’ planned as a draw for executives to see the potential of using Xbox as the source of any new set-top box.

While it remains unlikely that any major provider would veer away from the status quo for such a huge risk, Microsoft are strong in their belief that their new product is more than just a ‘games console’, and have even avoided referring to it as such, as the Envisioneering Group’s Richard Doherty reported to Bloomberg, noting: “They might not even use the phrase game console this time around because they’re trying to pitch it as this incredible entertainment hub in the home.”

NPD analyst Liam Callahan, meanwhile, offered an opposing view, claiming that nothing will surpass what the Xbox is best known for amongst consumers, stating: “Those entertainment options are important – in a sense they are almost a given, but gamers won’t buy a next-generation console from Sony or Microsoft for that.”

Inside the company, meanwhile, the impending reveal has triggered a period of reflection on what the previous ‘generation’ of consoles delivered to the industry, with Microsoft’s former chief executive Peter Molyneux unsurprisingly claiming that the Xbox 360 was the most memorable ’7th-gen’ product compared to the Sony PS3 and Nintendo Wii.

While this could be a game-changer in terms of content delivery, partnership with cable providers could also backfire, as the Xbox could wind up being associated with some companies for which people carry a negative view, such as Time Warner Cable, which has the lowest quality score among current major carriers. We’ll see what happens.

Charter Communications Makes Big Customer Satisfaction Gains

The American Customer Satisfaction Index survey targets consumers to see how positively or negatively they feel about services and products they purchase or subscribe to. Cable TV provider Charter Communications leaped 8% this past year, finishing with a 64 score out of 100 and placing second to Cox Communications among cable TV providers. Charter’s was the biggest gain, and Time Warner Cable had the biggest decline, dropping 5% from the previous year.

More from Multichannel News:

Overall, the subscription TV industry gained about 3%, ending a three-year run of stagnant customer satisfaction to finish the year with a rating of 68, according to ACSI. That rise was due mostly to improvements at telco video and satellite TV providers. Among TV service providers, those offering service via fiber-optics or satellite earned the highest points for customer satisfaction – on average fiber-optic/satellite TV service providers averaged a 72 score versus 63 for cable providers.

FiOS led the telco group with a 73 rating, down 1% for the year, which DirecTV logged a 72 rating and AT&T’s U-Verse service rated a 71. Dish Network gained 1% in the period to finish with a 70 rating.

“While nearly 90% of households have some form of TV subscription, the industry is facing small, but growing, competition from Internet video streaming,” ACSI director David VanAmburg said in a statement. “The industry’s pattern of yearly price increases, coupled with sporadic reliability, keeps customer satisfaction low relative to other household services and vulnerable to new technologies that enter the market.”

Subscription TV customers give picture quality strong ratings for both HD and basic resolution, but find call center service to be lacking compared with most other industries, according to the ACSI report.

ACSI began rating Internet Service Providers for the first time this year, and ISPs debuted with a customer satisfaction benchmark of 65—the lowest score among 43 ACSI industries.

“High monthly bills combined with problems across a broad spectrum of customer experience benchmarks—such as service reliability, data transfer speed and video-streaming quality—leaves customers less than satisfied with their ISP service,” said ACSI founder and chairman Claes Fornell in a statement. “But in a market even less competitive than subscription TV, there is little incentive for companies to improve.”

Charter’s gain, along with the small gains made by other cable companies, show that the sky is not necessarily falling in the world of cable TV providers. More on this story as it develops from the TV, Internet and Phone Blog.

ViaSat Adds New Business Aviation High Speed Internet Options

High speed internet on chartered flights for business professionals is becoming the norm. Business travelers work while on the go, and the need for high speed internet service is growing. A number of satellite internet companies are providing access to travelers in the air. ViaSat is one of those, and has added two new services.

More from their press release:

The new services – Yonder Premium and Yonder VIP – will provide higher data rates, compared to current Yonder service, new quality of service assurances, and enhanced network operations and field engineering customer support. These higher levels of service, along with the rollout of a 60 percent increase in capacity for the worldwide network, will provide an improved customer experience for high bandwidth consuming applications such as multimedia streaming and video teleconferencing.

Beginning in summer 2013, aircraft operators will be able to select from three distinct airborne Internet service levels offered through monthly subscriptions designed for predictable flight department budgeting:

  • Yonder Internet for web browsing, e-mail, VoIP, and office applications.
  • Yonder Premium for multimedia streaming and video teleconferencing, in addition to web browsing and office-in-the sky applications.
  • Yonder VIP that is designed to support a high number of Internet connections and simultaneous multimedia streaming sessions or video teleconferences for transport-category aircraft.

“After years of experience in providing satellite service to general aviation and government aircraft, we recognize the need to expand our services. We’re keeping pace with the proliferation of always-connected devices now making their way on board,” said Paul Baca, VP/GM of ViaSat Global Mobile Broadband. “These new Yonder services are one example of our commitment to giving customers the flexibility to choose systems and services that fit a variety of customer communication profiles.”

We’ll keep an eye on the expansion of high speed internet service in all of its forms here on the TV, Internet and Phone Blog.

DIRECTV Considering Hulu Purchase

Hulu, an online streaming site bringing video clips and full television shows to web viewers, is gaining traction in the marketplace, such that larger cable and satellite TV providers are considering purchasing the six-year-old service. DIRECTV, the number one satellite TV provider in the United States, is the latest to show interest. Hulu’s owners, which include Walt Disney, News Corp, and Comcast, are considering a sale, as well as other partnership opportunities. Time Warner Cable is another company in the same sphere that has expressed interest in purchasing Hulu.

More from the Wall Street Journal:

People familiar with the matter say pay TV operators like DirecTV could be interested in the site in part to expand their so-called “TV Everywhere” services, which make TV shows available over the Web to pay TV customers. TV networks and distributors offer a range of such services, but industry executives acknowledge that many consumers aren’t aware of the services or how to access them.

Pay TV distributors face a maturing U.S. pay TV market with slowing subscriber growth. Some industry executives have expressed concerns about the potential for “cord cutting,” or users choosing to drop pay TV connections in favor of affordable online video services. Cable companies are relatively well-positioned for such a change, since they sell broadband subscriptions. Satellite operators DirecTV and rival Dish Network Corp. DISH +0.46% are more reliant on their video business.

It is unclear if DirecTV is interested in buying a minority stake in Hulu or all of the site, the person familiar with the matter said. The talks between the companies could fall through. DirecTV was among the buyers who had kicked the tires on the online video site the last time it put itself up for sale in 2011.

Launched in 2007, Hulu was meant to be the broadcast networks’ response to the growing popularity of online video delivered on sites like Google Inc.’s GOOG +0.26% YouTube. But Hulu, which offers both free, ad-supported TV shows from NBC, ABC and Fox, and a subscription option, has struggled to keep pace with faster-growing rivals.

Netflix had roughly 28 million paid streaming subscribers in the U.S. at the end of March, while Hulu had about four million subscribers to its subscription service for the quarter ended March 31.

We’ll keep an eye on this story here at the TV, Internet and Phone Blog.