Telco entry into video distribution will be a boon for content owners, said Citigroup analysts Jason Bazinet and Mike Rollins. Phone companies lack the scale that cable operators have, so they will paying much more to programmers in carriage fees, Bazinet said: “We believe telco video entry creates $3.8 billion in incremental value” annually the next 3 years, to be distributed unevenly among existing cable networks and operators. Disney will see the largest benefit, largely due to ESPN, said Bazinet. The analysts said they see telco entry into video as a way to protect the voice business from cable competition. “We haven’t seen anything to suggest that the incremental video profit is going to be significant. We think the telcos are looking at this as a way to protect what they have in voice,” said Rollins.
Rates on some inmate payphone calls from Wash. state jails and prisons will drop sharply under a new Corrections Dept. deal with Chicago-based FSH Communications. The pact replaces an expiring state inmate payphone contract with AT&T that priced intrastate long distance calls at $1.10 a minute. The FSH contract sets an in-state long distance rate equal to about 17 a minute on a typical, 20-minute call. The deal, to take effect in the summer, prices an intrastate interexchange call at a flat $3.15 paid from inmate debit account or $3.50 collect. Local calls will cost what intrastate long distance calls do. Under the AT&T contract, a local call was $2. The new deal doesn’t change rates for out-of-state long distance, which will stay $4.95 the first minute and 89 a minute after. The new contract guarantees the state $5.1 million yearly in payphone commissions. The AT&T deal had a 40% commission on revenue, which in the 2004- 05 fiscal year yielded $3.8 million for the Corrections Dept. to spend on unfunded inmate needs. Inmates’ families long have complained that Wash. tied Ariz. for the nation’s highest inmate phone rates, harming inmates and their families.
FCC Chmn. Martin wants a vote on a broad media ownership inquiry soon after Robert McDowell’s delayed nomination gets Senate approval, said industry sources. After being rebuffed in his attempt to put a notice of proposed rulemaking on the Commission’s meeting agenda last year (CD March 20 p2), Martin wants to resuscitate the item within months of McDowell’s starting the job, said the sources. There was speculation the chairman would try to get a vote on the matter at McDowell’s first meeting, but we're told that’s now less likely. What’s unclear, according to Hill sources, is when the Senate hold on McDowell’s nomination will be lifted.
Broadcast Q4 earnings: CBS took a $9.5 billion writedown to reflect a decline in the value of its radio and TV properties amid weak advertising industrywide. The firm’s quarterly loss of $8.8 billion was less than a $17.4 billion loss a year earlier. TV properties helped boost companywide sales 2% to $3.8 billion; radio cash flow fell 11%… Hearst-Argyle sales and profit declined on weak advertising. Profit plunged about 75% to $9.85 million on a 13% revenue decrease… Radio One shares fell 11% after Pres. Alfred Liggins said it’s too soon to tell if broadcast results will rebound this year. Profit plunged about 50% to $9.5 million, though broadcast sales rose 15% to $9.2 million.
Nielsen Media Research has developed an advisory council on the Asian Pacific American television audience. Nielsen said Asian Americans make up about 3.8% of U.S. TV households.
PanAmSat officials told analysts the MPEG-4 transition for FSS video distribution is still “a good 3 to 5 years out,” in a quarterly earnings call Wed. “None of our full-time transmissions are using MPEG-4 today,” said COO Jim Frownfelter: “Where we are using it is in an experimental mode with some of our broadcast business on an ad hoc basis, as well as with foreign customers who provide MPEG-4 as part of on-demand programming.” About 33% of PanAmSat’s customers are still using analog, Frownfelter said. “The investment is really on both ends, and you've got to have customers willing to make the investment,” he said: “And we haven’t seen any significant movement in the U.S. toward MPEG-4 in terms of distribution.” PanAmSat CEO Joseph Wright said modulation technologies won’t soon affect historically long-term video customer contracts, averaging 8-9 years. “Whether they're using MPEG-4, MPEG-2 or analog, it’s basically one contract per transponder,” he said: “MPEG-4 is going to occur but from what our customers say, it’s not going to be as soon as everybody thinks it might.” PanAmSat reported $209.1 million revenue 3rd quarter, compared with $207 million a year earlier. Net income in the quarter rose to $54.2 million, vs. a $76 million loss for the prior year, officials said. PanAmSat’s video revenue rose $7.6 million over the 3rd quarter and govt. services revenue increased by $1.2 million, offset by a $3.8 million decrease in networked services revenue, they said.
About 12% of U.S. households had HDTV sets at the end of Sept., up from 7% a year ago, said Leichtman Research Group. Growth came mainly from price cuts of about 1/3 over the past year. Other key findings: (1) 89% of adults have heard of HDTV. (2) HDTV price averaged $1,600, down from $2,400 a year ago. (3) 18% of owners of HDTVs expect to buy another in the next year. (4) 11% of nonowners are likely to buy one in the next year if the price hits $1,000. Meanwhile, Kagan Research forecast that 82% of U.S. households will have HDTV by 2010, and 377 million HDTV sets will be sold by 2015. Kagan said there were 11 million HDTV households at the end of 2004, with an average of 1.2 HDTV sets. It predicted HDTV prices will drop 38% by 2010, to an average of $1,139. Other Kagan estimates: (1) 9.1 million HDTV sets will be sold in 2005, up from 5.6 million in 2004. (2) Cable HDTV subscribers will reach 3.8 million this year, and 30 million by 2010. (3) There will be 18 million DBS HDTV subscribers by 2010.
CLEC and ILEC lines grew from 189.5 million in 1999 to 195.6 million in 2000 but then fell to 177.9 million in 2004, the FCC said in the 2004/2005 Statistics of Communications Common Carriers. ILEC local loops grew from 102.2 million in 1980 to 188.5 in 2000, and then fell to 173.1 million in 2003. ILEC access lines grew from 113.8 million in 1984 to 187.6 million in 2000, then dropped to 162.5 million in 2003. CLEC share of end-user switched access lines grew from 4.3% in Dec. 1999 to 18.5% in Dec. 2004. ILEC end-user switched access lines fell from 181.3 million in Dec. 1999 to 145 million in Dec. 2004, while CLEC lines grew from 8.2 million to 32.9 million during the same period. ILECs reported residential and small business end-user switched access lines rose slightly from 139.8 million in Dec. 1999 to 140.6 million in June 2000 and then dropped to 112.2 million in Dec. 2004. CLECs had 3.4 million residential and small business end-user switched access lines in Dec. 1999, reaching 19.8 million in Dec. 2004. ADSL high-speed lines -- with a speed over 200 kbps in at least one direction -- grew 20% from 9.5 million in Dec. 2003 to 11.4 million in June 2004, then 21% to 13.8 million in Dec. 2004. Coaxial cable high-speed lines grew 13% from 16.4 million in Dec. 2003 to 18.6 million in June 2004 and then 15% to 21.4 million by Dec. 2004. Satellite and wireless high-speed lines grew 15% from 367,000 in Dec. 2003 to 421,000 in June 2004 and then 30% to 550,000 in Dec. 2004. ADSL advanced services lines (over 200 kbps in both directions) grew 24% from 3 million in Dec. 2003 to 3.8 million in June 2004, and then 51% to 6 million in Dec. 2004. Coaxial cable advanced services lines grew 15% from 15.3 million in Dec. 2003 to 17.6 million in June 2004, then 19% to 20.9 million in Dec. 2004. Satellite and wireless advanced services lines grew 28% from 73,000 in Dec. 2003 to 94,000 in June 2004, then 14% to 106,000 in Dec. 2004. Wireless telephone subscribership grew from 92,000 in Dec. 1984 to 182 million in Dec. 2004. The 160- page report includes: (1) General information on industry structure. (2) Financial and operating data on telephone carriers. (3) Data on international communications. (4) Historical financial and operating statistics. (5) Data on industry trends -- www.fcc.gov/wcb/stats.
Factory DTV unit shipments climbed 45% in 2005’s first half to 3.8 million, fueled by price declines averaging $200 during the period, CEA reported Fri. Dollar shipments rose 23% to $4.6 billion, CEA said. Falling prices have meant a sales increase each month in 2005 from the one before, CEA said. CEA said total DTV shipments reached 3.8 million in Jan.-June, suggesting that just under 1/2 -- or 1.85 million sets -- were flat- panel LCD or plasma TVs. CEA doesn’t publicly release monthly or weekly shipments on flat-panel DTVs, as it does for digital direct-view or projection sets.
Broadcast Financials: Hearst Argyle TV revenue was $188.5 million in the 2nd quarter ended June 30 down from $198 million the year before. Operating income was $63.7 million down from $77.5 million. The decrease in total revenue was due to a $9.7 million decrease in net political ads and a $2.6 million drop in network compensation… Beasley Bcstg. Group net revenue rose 7% to $33 million in the 2nd quarter and net income remained virtually unchanged at $3.8 million.