April 2014

AT&T/ Chernin Group Deal: Another Take on OTT Video Monetization

[Commentary] AT&T is trying a new approach toward the over-the-top video opportunity, announcing that it has created a joint venture with media company The Chernin Group to focus on over the top (OTT) video.

The companies said they would jointly invest $500 million in the venture with the goal of “investing in advertising and subscription VOD channels as well as streaming services.” OTT is both an opportunity for and a threat to the nation’s largest pay TV providers -- including AT&T, Verizon and cable companies such as Comcast and Time Warner Cable.

OTT video offerings such as Netflix and Amazon Prime threaten the pay TV providers’ subscription and VOD revenues. But Netflix and Amazon Prime don’t have their own networks -- and those networks could become increasingly important as TV Everywhere gains in popularity, giving consumers the ability to watch video on a variety of devices. And as that happens, companies such as AT&T and Verizon that have mobile as well as landline broadband networks may have an edge.

Based on the press release announcing the AT&T/ Chernin Group venture, the venture partners appear set on capitalizing on that edge.

Critics: Cable merger could sideline sports

A pending mega-merger between Comcast and Time Warner Cable could affect some sports fans' ability to watch their favorite teams, critics are saying.

Opponents of the proposed $45 billion deal are warning it could lead Comcast to squeeze out competition and force leagues to show games exclusively to the company's subscribers. "What [Comcast] can do is it can favor its own content in a lot of ways on its own platform, and then it can also deny its own content to other platforms, meaning typically the satellite guys," said Matt Wood, policy director for Free Press. Comcast owns a handful of regional sports networks, as well as NBC and its slate of channels.

That could give it an incentive to make sure games are shown only on its stations, not others, and give the company more leverage over teams when it comes to broadcasting rights. That potential exists for a variety of types of programming, critics say, but would be especially egregious for sports, which are often supported by local tax dollars.

"Because sports are publicly subsidized, our belief is that everything should be viewed through the lens of what makes them more available," said David Goodfriend, the chairman of the National Sports Fan Coalition and former deputy staff secretary in President Clinton's White House.

Lawmakers have expressed similar concerns. In a hearing in April, Sen Richard Blumenthal (D-CT) said Comcast would own 16 regional sports networks after the merger, which amounts to "a very formidable amount of local sports programming in the largest media markets in the country."

Half of All Americans 55-Plus Own Smartphones

Nielsen is reporting that 51% of all adults over the age of 55 in the US owned smartphones in the first quarter of 2014, up 10% in the first quarter of 2013.

The development is notable because rapid growth in smartphone usage among older Americans means that a majority of Americans in all age groups now own smart phones. Overall, seven in ten Americans owned smart phones and about 85% of the purchases for new mobile phones are now smartphones.

Eighty-Five Percent Of Climate Change Guests Are Men

Two Media Matters analyses suggest that over 85 percent of those quoted in the media about climate change are men. Several top women in the field denounced this disparity, noting that women will be disproportionately affected by the impacts of climate change.

A review of a recent Media Matters analysis of print and television coverage of the United Nations climate reports found that women made up less than 15 percent of interviewees.

A look back at our analysis of broadcast coverage of climate change unearthed the same stark disparity: less than 14 percent of those quoted on the nightly news shows and Sunday shows in 2013 were women. Media Matters has previously found that women make up only about a quarter of guests on the Sunday morning talk shows and weekday evening cable news segments on the economy.

However, the gender gap on climate change conversations is even starker. One contributing factor may be that the climate sciences have experienced a "female brain drain," according to Scientific American, as have many other scientific fields. This "female brain drain" is also evident in the largely male leadership of the UN's Intergovernmental Panel on Climate Change.

How Africa Beat The West At Reinventing Money For The Mobile Age

It’s a painfully First World problem: Splitting dinner with friends, we do the dance of the seven credit cards. No one, it seems, carries cash anymore, so we blunder through the inconvenience that comes with our dependence on plastic.

When I returned to the United States after living in Nairobi on and off for two years, these antiquated payment ordeals were especially frustrating. As I never tire of explaining to friends, in Kenya I could pay for nearly everything with a few taps on my cellphone.

Every few weeks, I’d pull cash out of my American bank account and hand it to a contemplative young man stationed outside my local greengrocer. I’d show him my ID and type in a PIN, and he’d credit my phone number with an equivalent amount of digital currency.

Through a service called M-Pesa, I could store my mobile money and then, for a small fee, send it to any other phone number in the network, be it my cable company’s, a taxi driver’s, or a friend’s. Payments from other M-Pesa users would be added to my digital balance, which I could later withdraw in cash from my local agent.

For me, M-Pesa was convenient, often simpler than reaching for my credit card or counting out paper bills. But for most Kenyans, the service has been life-changing. Kenya has one ATM for every 18,000 people -- the US, by contrast, has one for every 740 -- and across sub-Saharan Africa, more than 75 percent of the adult population had no bank account as of 2011.

When Safaricom, the major Kenyan telecommunications firm, launched M-Pesa in 2007, pesa -- Swahili for “money”-- moved from mattresses to mobile accounts virtually overnight. Suddenly, payment and collection of debts did not require face-to-face interactions. Daylong queues to pay electric- or water-utility bills disappeared. By 2012, 86 percent of Kenyan cellphone subscribers used mobile money, and by 2013, M-Pesa’s transactions amounted to some $35 million daily. Annualized, that’s more than a quarter of Kenya’s GDP.

Comcast-Netflix Debate Illustrates Implications of Comcast-TWC Merger

[Commentary] Netflix appears to be positioning itself as a major voice against the Comcast-Time Warner Cable merger.

Sen Al Franken (D-MN) has indicated he intends to invite Netflix’s participation in the regulatory approval debate and Netflix confirmed they intend to take him up on his offer. Needless to say, Comcast isn’t pleased.

Breaking Up With Facebook? You Better Think Twice

[Commentary] The Internet is ablaze with chatter of how Facebook is “backstabbing” advertisers and “corroding” the relationships between brands and the followers they have worked so hard to attain.

But before you sever your social marketing ties with Facebook, take a second and review the situation. Facebook isn’t necessarily backstabbing marketers (although they are trying to make money). Instead, the social network is simply growing up and going down the natural path of marketing evolution -- one that we’ve already seen with Search.

Today, businesses understand that investing in paid search and search engine optimization is necessary to drive relevant traffic to their business. More recently, Google increased focus to the quality of content in paid and organic search. When companies try to game the system with generic, bland content or excessive links, their rankings and traffic drop.

If you want to keep rankings or traffic high, you have to pay Google to stay on top in sponsored links and keep up with SEO. We’re witnessing the same process underway at Facebook, so don’t take it personally. Facebook is not targeting or attacking the businesses they spent so many years cultivating -- it’s just the natural evolution in marketing.

[Revoy is the CEO of Viralheat]

Why the feds should block Comcast's merger with Time Warner Cable

[Commentary] It's a good time to delve into a development that could forever reshape the future of television: the possible merger between two of the nation's biggest cable companies, Comcast and Time Warner Cable.

A merger between these giants would threaten an open and fair market for cable television as well as Internet access.

To understand this, consider that Comcast could gain 11 million subscribers if it buys Time Warner Cable. Even if it winds up divesting 3 million subscribers to Charter Communications to gain approval from the Federal Communications Commission, the combined company will still have 30 million subscribers nationwide.

Some would say the companies don't directly compete -- Comcast has its own markets, such as in Philadelphia and Washington (DC), and Time Warner Cable has its own, such as in New York and North Carolina. The lack of overlap may temper antitrust concerns, but even geographically divergent markets can create an anticompetitive environment.

Another factor to consider is how the scarcity of a necessary resource like broadband will inevitably increase the power of monopolistic distributors while hurting content providers and consumers.

So while the merger may not be anti-competitive in terms of eliminating existing competition, it does obviate the need for both Comcast and Time Warner Cable to expand their services and aggressively compete with each other on price, quality of service, and capacity, which amounts to the same thing. The Federal Communications Commission should consider all this before approving a deal and recognize the long-term ramifications of allowing cable juggernauts to expand their footprint artificially instead of through investment and competition.

[Sanghoee is a political and business commentator]

Comcast Adds Cable-TV Customers Again, Bucking Industry

Comcast is having no problem getting bigger. The largest US cable company added video customers for a second straight quarter, bucking the industry trend of losing TV subscribers.

Video subscriber growth and the Winter Olympics helped first-quarter profit of 68 cents a share, excluding some items, beat the 64 cents analysts estimated on average. Comcast also reported that revenue rose to $17.4 billion. Analysts had predicted $17 billion.

Bolstered by its new X1 digital set-top box that gives people the ability to watch TV shows stored online, Comcast added 24,000 TV customers in the quarter to reach a total of 22.6 million.

Google's Android Catching Up to Apple in Race for Mobile Ad Dollars

Apple's mobile-operating system is losing its advantage over Google's Android when it comes to attracting advertisers' dollars, according to a new study.

In a report, mobile-ad platform Opera Mediaworks found that devices running Android sent a greater percentage of ad requests in the first quarter of 2014 than those running Apple's iOS.

"The quality of the advertising that we can deliver on a Samsung and Android device is pretty much on par with an iOS," Mahi de Silva, CEO of Opera Mediaworks said. The report found that, in the first quarter, Android devices' share of mobile-ad requests reached 42.8%, up from 31.3%. Over that time iOS's share fell to 38.2% from 44.5%.

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