January 2014

AT&T: Tough to Go With the Flow

[Commentary] AT&T looks a bit pressed for cash.

The company surprised analysts when it said it would generate free cash flow of around $11 billion in 2014, far short of the $15.5 billion Wall Street projected. With roughly $9.7 billion of dividends due to be paid out of that sum, AT&T is left with little room for error even as competition in US wireless is intensifying. The primary reason for the shortfall: an expected increase of up to $3 billion in cash taxes. AT&T also plans capital expenditure of about $21 billion as it moves into the peak year of its network investment program. And the $11 billion free-cash-flow figure excludes extra spending arising from the acquisition of Leap Wireless. AT&T may start to feel the pinch with competition heating up. T-Mobile US has roiled the industry with a series of promotions aimed at taking market share. AT&T's average revenue per user showed little sign of such pressure in the fourth quarter. But things may worsen in 2014 given the price cut AT&T implemented in late 2013, New Street Research says. And T-Mobile's latest offer to cover the fees new subscribers pay for early termination of contracts with other carriers may have a sizable effect. That doesn't even take into account what Sprint might do.

Hollywood Hired Hands See Greener Pastures Outside California

As film and TV production scatters around the country, more workers are packing up from California and moving to where the jobs are. Driving this exodus of lower-wage workers -- stunt doubles, makeup artists, production assistants and others who keep movie sets humming -- are successful efforts by a host of states to use tax incentives to poach production business from California.

The changing economics affect many major movies seen today. Only two movies with production budgets higher than $100 million filmed in Los Angeles in 2013, according to Film L.A. Inc., the city's movie office. In 1997, the year "Titanic" was released, every big-budget film but one filmed at least partially in the city. The number of feature-film production days in Los Angeles peaked in 1996 and fell by 50% through 2013, according to Film L.A. Projects such as reality television and student films have picked up some of the slack. But overall entertainment-industry employment has slid. About 120,000 Californians worked in the industry in 2012, down from 136,000 in 2004, according to the US Bureau of Labor Statistics.

For Movie Producers, a Golden Age Fades

Life is harder for producers in the new, tightfisted Hollywood.

The number of on-the-lot deals has fallen 52% since 2000. Average spending on each producer deal has also dropped sharply, say studio executives. And houses aren't being built for anyone. Funding in Hollywood's flush days came in large part from booming DVD sales, which peaked in 2004. Consumers were so willing to pick up a disc on their way out of Wal-Mart or Target that even box-office flops often ended up profitable. Now, thanks to cheap options such as Netflix and Redbox, home-entertainment revenue at studios is off about 40%, executives say, and it is easy to lose money on a movie. Studios have responded in two ways. All have cut their slates of new pictures. The six major studios released 120 movies in 2013, compared with 204 in 2006. They also have sought to slash spending—and nobody has felt the brunt as much as producers. "It's not something you'd want your son to be these days," says Michael Lobell, the producer of "Striptease" and "Honeymoon in Vegas."

FCC Adopts Order on Reconsideration Regarding The Tribune Company

The United Church of Christ, the Media Alliance, and Charles Benton (yes, that Charles Benton) asked the Federal Communications Commission to reconsider its decision granting the applications to transfer control of Tribune Company and its licensee subsidiaries from its former shareholders to Sam Zell, The Tribune Employee Stock Ownership Plan as implemented through the Tribune Employee Stock Ownership Trust, and EGI-TRB, LLC. In that decision, the FCC also granted the broadcast license renewal applications filed by Tribune for four of its stations. The FCC has denied the petition for reconsideration.

Facebook teams up with Fox on Super Bowl

Facebook is collaborating with Fox Sports for the Super Bowl broadcast, the social network's latest move to increase its role as a hub for real-time conversations around sports and news events.

Fox will integrate content from Facebook into its pre-game television programming, including public comments from Facebook and Instagram users about the football game as well as fan statistics based on collective data from Facebook's members. The two companies have also created a website that will feature Facebook user data and videos of all the commercials that air during the game.

Born Online, Facebook Now Wants to Be Your ‘Paper’

Print and broadcast news outlets have long been the world’s gatekeepers of information. Now, Facebook wants a turn. Facebook just introduced a long-awaited mobile app, called Paper, that offers users a personalized stream of news.

Facebook said it will be available Feb. 3 for the iPhone; there is no date yet for Android. Instead of editors and reporters, Facebook’s publication is staffed by a computer algorithm and human “curators.” The content comes from outside sources, based on links shared by the social network’s 1.2 billion users. During a recent demonstration, the curated content featured articles from The New York Times, The Washington Post and Time Magazine, among others. The move is part of Facebook’s long-term strategy to be more than just a popular app, or a destination on the Internet. Facebook wants to be the global hub of human communication, essential in the lives of its users.

Chicago’s South Side is finally getting its ultra-high-speed Wi-Fi -- at least two blocks of it

Two community groups working to jump-start a delayed plan to roll out ultra-high-speed wireless Internet access throughout Chicago’s South Side will launch a Wi-Fi network in Woodlawn in mid-March, organizers said.

Though the launch starts small -- a free 50-megabit-per-second Wi-Fi connection in a two-block radius -- the project has lined up router giant Cisco Systems and its cloud networking group, formerly called Meraki, to provide the connectivity “plumbing” for an eventual communitywide network. The long-range vision is to support efforts to create a gigabit-speed fiber-optic and wireless network in as many as 15 innovation zones throughout the city, says Pierre A. Clark, who is spearheading the project as head of the Woodlawn Broadband Expansion Partnership and the Southside Broadband Expansion Collaborative.

What do Facebook, Wrigley and Motorola Mobility have in common? This startup

These days companies have plenty of ways to get consumer feedback, from random telephone surveys to monitoring social media comments. Michael Winnick has another he thinks can be even more useful: a cyberspace focus group.

His startup, Dscout, is helping corporate customers such as Facebook, Wm. Wrigley Jr. and Trek Bicycle get real-time input and updates from an army of consumers via their smartphones. Google's Motorola Mobility subsidiary has used the Dscout app to gather a virtual focus group of 50,000 people in 130 countries for Project Ara, which aims to build the next generation of mobile phones. “We allow clients to gather a lot of information with a greater level of precision than they could get before and to do it quickly and cheaply,” the 40-year-old CEO says.

CNN, Twitter release tool to help journalists find news faster

Twitter and CNN have unveiled a new tool that will help journalists identify breaking news soon after it happens. The new tool, developed in partnership among CNN, Twitter, and the social analytics company Dataminr, is designed to identify potentially breaking news as it's "emerging on Twitter in real time." While any journalist can see news bubbling up on Twitter through their feeds, the new tool, called Dataminr for News, will analyze tweets in real time and identify potential breaking news while it's still in its early stages.

Verizon Uses Super Bowl Week To Showcase LTE Multicast

Verizon Wireless has set up shop in New York City to demonstrate LTE Multicast, a technique that’s designed to beam live TV feeds wirelessly to smartphones and tablets without gobbling up all of the wireless network’s bandwidth.

Instead of delivering a bunch of bandwidth-eating unicast video streams, the multicast approach carves out a dedicated slice of the LTE spectrum to fit in a nailed-up stream of the live event that, in turn, can be captured by multiple devices that are connected to the cell site. Verizon Wireless is showing off a test LTE Multicast network at the Verizon Power House facility at Bryant Park that is feeding live video to Samsung Galaxy Note 3 tablets that are outfitted with a Qualcomm Snapdragon 800 processor and Sequans chips matched with middleware from Expway that enables the multicast capability. According to Verizon Wireless, the demo is also being powered by encoders from Thomson and an app developed by MobiTV. Alcatel Lucent is supplying the underlying 4G LTE network equipment.

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