January 23, 2008

360AM: Showbiz Reels From the 'R' Word

An economic recession is just the latest blow to media stocks, time could be ripe for cable consolidation, NBC pilots grounded.

By Steve Goldstein

Cable360AM — News briefing for Wednesday, Jan. 23 »

Cable360 tipster Brain Clark tells us that the surprising high demand for vintage rotary phones is not a good sign for the economy. Good morning.

The tumbling stock market continues to damage media companies and those companies that deliver media, from Disney and CBS to Comcast and Apple, Variety reports. Stocks of content producing and distributing companies had already been sinking from worries about the writers’ strike, the transition to online content consumption, falling ratings, dipping advertising and rival triple-play delivery platforms, and recession fears have shot additional bolts of fear throughout Wall Street. One prominent Comcast shareholder, for instance, Chieftain Capital Management, wants the cable operator to dump its CEO, Brian Roberts, and it’s only a matter of time before similar requests are made of Time Warner and other large media companies. But “new management may not be the answer,” Variety says. Providing context, Merrill Lynch analyst Jessica Reif Cohen said, after downgrading Disney and CBS stocks and lowering earnings forecasts for News Corp. and Time Warner, that after being hurt by previous recessions, media stocks lagged behind the overall market in their recovery by one or two quarters. [Variety]

If Comcast is to prove to Wall Street that the telecommunications market is robust enough to accommodate triple-play offerings from both cable operators and the telcos in the long term, it may have to merge with other operators to increase its take from the presumably profitable advanced advertising business, says Fred Dawson of ScreenPlays Magazine. And now may be the time to do it, while FCC chairman Kevin Martin is regrouping after the temporary failure of his preemptive strike against cable consolidation in late 2007. [ScreenPlays Magazine]

Google and multinational advertising company Publicis Groupe are working together to create digital advertising that is “both creative and technologically savvy,” the New York Times reports. [New York Times]

AT&T launched U-verse Voice yesterday in Metro Detroit, the Detroit News reports. The VoIP service will be marketed as part of AT&T’s U-verse package and is not meant to steal customers from AT&T’s wireline phone service. Pricing of U-verse Voice is in line with local pricing of Comcast’s rival VoIP voice service, according to the Detroit News.
[Detroit News]

The Writers Guild of America West and the Writers Guild of America East are no longer including jurisdiction over writers of reality and animation content as part of their contract negotiations with production companies, the New York Times reports. Negotiations between writers and producers broke down more than six weeks ago, and resumed, informally, yesterday. [New York Times | CBS Broadcasting]

NBC Universal will no longer produce pilot episodes of potential TV shows, the New York Times reports. The move will save the company a projected $50 million a year. Jeff Zucker, NBC Universal CEO, said yesterday the company could conceivably commission one or two pilots a year when the situation warrants it. The other broadcast networks are also said to be cutting back on pilots. [New York Times]

Arris released its Video on Demand Privacy Mode Encryption for its D5 Universal Edge QAM, which was designed to help cable operators ensure that their VOD content can only be viewed by authorized subscribers.

Cable operator Atlantic Broadband launched VOD service in Delaware and Maryland using Harmonic’s NSG 9000 Universal EdgeQAM.

Yesterday's 360 Update.

Got a tip? Contact sgoldstein@accessintel.com and sarenstein@accessintel.com.