Consumer spending on electronic sellthrough of home entertainment content jumped 43 percent in Q1 compared with same quarter a year earlier, the Digital Entertainment Group said. Consumers bought digital home entertainment content “at such a rapid pace” in Q1 that electronic sellthrough revenue is on track to overtake that of VOD for the first time later this year, DEG said. That the 43 percent rise in electronic sellthrough came despite a decline in the box office for titles released for home entertainment is evidence of “the broader availability of titles and increased access to digital content,” DEG said. Blu-ray hardware penetration also is on the rise, it said. The 4.2 million Blu-ray players sold in Q1, which includes standalone set-tops, PlayStation and Xbox One consoles and Blu-ray transports sold as part of boxed home theater systems, is a 38 percent increase from a year earlier, pushing hardware penetration to nearly 75 million U.S. homes, DEG said. Not all was rosy in the Q1 report. Total consumer spending on home entertainment content fell 3.8 percent, including a 13 percent decline in all packaged media, DEG said.
Capitol Hill lobbying spending on video marketplace issues largely rose in the latest quarter, as it did in the fourth quarter of 2013 (CD Jan 23 p7). Various factors propelled spending spikes, largely involving the possibility of overhauling retransmission consent rules, the Satellite Television Extension and Localism Act reauthorization process, and the brewing debate over the Comcast purchase of Time Warner Cable.
Sinclair’s board approved a buyback of as much as $150 million of the broadcaster’s stock, after an existing authorization with $47 million remaining is used, said the company in a news release Thursday (http://bit.ly/1pfpzae). The stock fell 9.1 percent Monday, when an analyst downgraded the sector on worries that TV station deals will be harder if the FCC approves at its March 31 meeting an order requiring some station sharing agreements be attributed for ownership quotas. (See separate report above in this issue.) Thursday, Sinclair closed up 3.8 percent to $27.03.
Video interests reign, as industry has spent tens of millions of dollars lobbying Capitol Hill on key communications issues, Q4 lobbying disclosure reports showed this week. Spending was often significantly up from the same period last year, particularly for stakeholders with video interests, but not always. Many disclosure reports highlighted pending priorities before Congress, such as the reauthorization of the Satellite Television Extension and Localism Act (STELA), which expires at the end of 2014 and is the source of much debate -- such as whether the reauthorization should address updates to retransmission consent law. Lobbying is widely expected to spike in 2014 as the House takes on an overhaul of the Communications Act.
T-Mobile US is getting the lower band spectrum it has long coveted, buying Verizon Wireless’s 700 MHz A-block licenses for $3.3 billion, in a deal announced Monday. The transaction must clear the FCC and get antitrust approval from an agency that’s expected to be the Department of Justice. Most FCC watchers we asked don’t expect that to be a major hurdle. Combined with the low-band spectrum T-Mobile already has in the Boston area, the carrier said it would have low-band spectrum in 21 of the 30 top U.S. markets -- including nine of the top 10. Major markets in the new spectrum include New York, Los Angeles and Washington, D.C. The spectrum covers an area with 158 million potential subscribers, T-Mobile said.
The U.K. Office of Communications wants input on plans to prioritize release of spectrum in bands that could be used for mobile data services in the long term, it said in a consultation paper (http://xrl.us/bp6tv6) Thursday. There are challenges to satisfying the demand for such services, including the need for continuing technology improvements to increase the capacity and performance of mobile and Wi-Fi networks, and deploying networks that make even more effective use of existing spectrum by, for example, use of smaller cells and Wi-Fi, it said. Other concerns are to ensure competition in mobile data services; consider other demands for spectrum, not just for mobile data; and meet potential increasing expectations and demands for ubiquitous coverage of mobile data services for such things as new machine-to-machine applications, it said. Ofcom is already working on freeing spectrum in the 700 MHz, 2.3 GHz, 3.4 GHz and UHF TV white space bands, it said. It proposed giving high priority to releasing spectrum in the 1452-1492 MHz, 1980-2010/2170-2200 MHz, 3.6-3.8 GHz and 5350-5470 and 5725-5925 MHz bands. As a medium-high priority, Ofcom said it will continue to support several bands as potential candidates for consideration at the World Radiocommunication Conference 2015: 2.7-2.9 GHz and 3.8-4.2 GHz. In the longer run, the regulator said it will continue to engage in international talks on the future of the 470-694 MHz band while safeguarding digital terrestrial TV and wireless microphone users; and will consider the 450-470 MHz band for mobile data. Ofcom said it expects to publish a statement in Q2 2014. Comments are due Jan. 30.
Many unknowns still exist for the Los Angeles City Council plan to bring free Wi-Fi to the city through a request for proposal (RFP) process, said Steve Reneker, the city’s Information Technology Agency general manager, on a Tuesday Gigabit Nation podcast. The council last week unanimously passed Los Angeles City Councilmember Bob Blumenfield’s proposal to bring free citywide wireless broadband to Los Angeles (http://bit.ly/HFhaOZ). The network will be built on a fiber-to-the home infrastructure with basic and premium packages, said Reneker. While cities such as Chattanooga and Kansas City have successfully developed their own gigabit networks, Los Angeles would be the largest city -- about 3.8 million people -- to complete this kind of project if everything goes according to plan, said Reneker. The city’s RFP will ask for the vendor, or coalition of vendors, to charge no connection fees, reach all homes, businesses and high-rises, and to allow the users to opt in to the network at any time, said Reneker. “We have a huge economic development sector with small- and medium-size tech companies, and they should be able to get affordable broadband,” he said. The network will take three to five years to complete, he said. The city will provide incentives to the vendors such as expediting right of way and a “guaranteed revenue stream for 10 years,” said Reneker. The city hopes to find a vendor that can also support its cloud data centers and VoIP functions within its network, he said. The city wants to start installing conduit next year when a $3 billion street repair program begins, said Reneker. “We will require all parties to have inspectors for rights of way issues,” he said. The city intends for the network to be open access, but it could change once the vendor is selected, said Reneker. The take rate needs to be able to meet the investments of the vendor, said Reneker. “Most carriers are going to build their networks where the revenues can be made to meet the bottom line unless you have a project like ours where the network needs to offer service to everyone,” he said.
AT&T said Wednesday it added more than 2 million wireless and high-speed Internet subscribers in Q3, and reported $32.2 billion revenue, up 2.2 percent over the year-earlier quarter. Net income was up 4.9 percent over last year to $3.8 billion. AT&T now has more than 10 million U-verse subscribers and U-verse revenue was up 28.1 percent year-over-year. AT&T reported 655,000 high-speed Internet and 265,000 U-verse TV net subscriber adds. Wireless data revenue was up 17.6 percent over last year and wireless subscribers increased by nearly 1 million. Smartphones now make up 89 percent of the company’s postpaid phone sales. Chief Financial Officer John Stephens said on a call with investors AT&T is building a “strong runway” for its LTE expansion and continues to add spectrum, with most of the 700 MHz B-block spectrum the carrier recently acquired already in service. In Q3 AT&T increased U-verse speeds up to 45 Mbps, Stephens said. “We're moving forward plans for speeds of 75 Mbps and faster,” he said. A 100 percent fiber broadband network AT&T is installing in Austin, Texas, will deliver speeds up to 1 Gbps, he said.
The FCC International Bureau dismissed applications involving earth stations from GCI Communication Corp. and X2nSat for being incomplete. GCI filed an application to modify its earth station authorization to add a 3.8-meter antenna to operate in the 3700-4200 MHz and 5925-6425 MHz bands, the bureau’s Satellite Division said in a letter (http://bit.ly/19znpuW). GCI didn’t identify the intended points of communication on its Form 312, it said. The division calculated that EIRP density should be 46.4 dBW/4kHz and 84.2 dBW/4kHz for emission designators, which is different from the EIRP density listed by GCI, it said. X2nSat didn’t provide radiation hazard studies for all types of earth stations that it requested in its application for a new very small aperture terminal network, the division said in a separate letter (http://bit.ly/15tf6yE). X2nSat also must provide a demonstration that the Newtec .75-meter antenna, model MDM2200, is compliant, it said.
AT&T added 551,000 postpaid subscribers during Q2 -- its best data for the quarter in four years, said the carrier Tuesday. The carrier said net income totaled $3.8 billion on $32.1 billion in consolidated revenue. The carrier’s 4G LTE network covers more than 225 million potential customers in the U.S., and AT&T expects to expand to an area covering almost 270 million potential customers in 400 markets by the end of the year. The carrier expects its LTE network will be “substantially complete” by summer 2014, it said (http://soc.att.com/1aH5qUW).