Q3 sales at Arbitron increased 8.3 percent from a year earlier to $114.3 million. Net income increased 2.6 percent to $15.8 million. The boost in sales was due to contracted price increases for its Portable People Meter radio ratings service and in its multi-year radio ratings contracts, it said.
Radio One said it agreed to sell WJKR-FM Columbus, Ohio, to a Salem Communications subsidiary. Salem will begin programming the station beginning Nov. 1 under a local marketing agreement, Radio One said. The station is not “a core asset,” Radio One said.
Journal Communications said its broadcast group completed the purchase of WACY-TV Appleton, Wis., from ACE TV for about $2 million. Journal has operated MyNetworkTV affiliate under a local marketing agreement beginning in 2004. “Completion of the WACY transaction solidifies our duopoly in the Green Bay market,” said Steve Smith, Journal’s chairman. The company also owns WGBA-TV Green Bay, an NBC affiliate.
MPS Media of Gainesville, Fla., withdrew its request for a waiver to delete some nearby stations from the significantly viewed list for the purposes of network non duplication and syndicated exclusivity. It withdrew the waiver petition “without prejudice to the right of MPS ... to seek such relief in the future,” a filing with the agency said (http://xrl.us/bnvuhs). Cox and the Washington Post Co.’s Post-Newsweek had opposed the petition.
Two Vermont Class A TV stations were dropped to low power TV status this week. The FCC Media Bureau modified WGMU-CA Burlington status to low power, an order released Wednesday said (http://xrl.us/bnvuev). Separately the bureau cut the status of W19BR, Monkton to low power, an order said (http://xrl.us/bnvue5). Both stations had failed to properly include quarterly children’s TV programming reports in their public files, the orders said. The bureau also ordered a Class A station in New Hampshire to show cause why its status should not be modified to low-power, an order released Wednesday said (http://xrl.us/bnvufm). W17CI Claremont, N.H., is at least the 45th Class A station to receive such a show-cause order after Congress gave the FCC authority to hold an incentive spectrum auction in the TV band, our tally shows. At least 16 have seen their Class A status dropped (http://xrl.us/bnvugg).
There will be dedicated Netflix buttons on more smart TV remote controls this holiday season “than we've ever had,” CEO Reed Hastings said on an earnings call Tuesday. The remote control feature is “becoming pretty standard and built-in,” he said. That’s a “significant positive” for Netflix because smart TVs are “becoming a larger percentage of all TVs,” he said. Tablets are increasingly being used by Netflix subscribers to stream content, as well as smartphones to a lesser degree, Hastings said. “The question is, is it a straight substitute for a laptop as it grows, in which case it doesn’t particularly affect us, or is it a net addition because it’s a better consumption device than a typical laptop,” he asked. “We think there’s some truth to the latter.” Another “scenario where tablets are really interesting” is the devices being used to select content that is then watched on a TV, he said. “All the supplemental information” related to content can be consumed on a tablet while somebody is viewing the movie or TV show on a TV, he said. “That’s nice.” What Netflix sees as “a big opportunity” is using the touch functionality of a tablet to “choose what you want to watch, and then to be able to select it and then it’s automatically playing on your TV,” he said. That capability is being demonstrated now on iPads and Android mobile devices when used to control Netflix streaming via the PS3, he said. That’s “something we're working with all the CE ecosystem to build in so that over the next several years, this becomes a general capability,” he said. For now, TVs remain the device most often used to view content via Netflix, whether via smart TVs, videogame consoles, Apple TV, Roku or Blu-ray players, said Hastings. Mobile device usage in general has “been very strong for several years and continues to be strong” for Netflix content viewing, he said. Netflix is “constantly testing user interfaces,” said Chief Financial Officer David Wells. There are “a lot of exciting user interfaces coming up enabled by devices that enable gesturing, voice and other things,” he said. “You'll see us continue to experiment and play with those types of interfaces in tests, and if we find one, then we'll continue to innovate in those areas.” Netflix shares closed 12 percent lower Wednesday at $60.12, after the company reported that Q3 profit tumbled to $7.7 million from $62.5 million in the year-ago quarter. Revenue grew to $905.1 million from $821.8 million. The number of U.S. streaming members grew to 25.1 million, in line with the company’s forecast, Netflix said. It predicted that U.S. membership will grow to 26.4 million to 27.1 million in Q4, up more than 20 percent year-over-year. Domestic DVD members tumbled to 8.6 million (8.5 million of them paid subscriptions) from 13.9 million (13.8 million paid) in Q3 last year, it said. This quarter, Netflix, “as expected,” will “likely move to a consolidated loss” due to its initial launch investment to enter the Nordic region, it said in a letter to shareholders. The company still expects it will take three years to return to full “brand recovery” after boosting pricing and separating its streaming and DVD services last year, said Hastings. There is “still some room for recovery, but we've seen it trend in the right direction,” said Wells. The London Olympics hurt subscriber additions, as Netflix projected in July, said Wells. “We had a strong July, a soft August and then a slower bounce-back in September.” Netflix continued to see little impact on its growth from Amazon’s streaming service, said Hastings. “I think as Amazon builds out their original content, which they're very actively engaged in and they'll get exclusive deals against us, they'll more and more be a different service than ours.” He predicted “many subscribers, potentially, will subscribe to both” Amazon and Netflix. “I think that’s the way that it evolves over time, like it has in the U.K.,” he said. Netflix sees Hulu as its “closest” U.S. streaming rival, it said in the letter to shareholders. “While there are now around 2 million Hulu Plus members in the U.S., the ownership of Hulu makes it a wild-card in terms of future evolution as a global competitor,” it said. “What makes them” the wild card is that it’s owned by three of the largest content companies in the world and focuses on TV, Hastings said on the call. Despite rumors that Netflix will eventually have to raise pricing, Hastings said the company remains “very excited about” the $7.99 price point for its main subscription plans, and “we have no plans to change that.”
With the U.K.’s Vodafone facing increasing competition abroad and in need of cash, the “unthinkable” may become “thinkable” and Vodafone may consider selling off its share of Verizon Wireless, Sanford Bernstein analyst Craig Moffett said in a research note Wednesday. “With Verizon trading at all time high multiples; U.S. investors appearing to suspend disbelief on the impending deterioration of the U.S. wireless market; and an urgent need for major strategic change in Europe, there may never be a better time for Vodafone to relinquish its 45 percent of VZW,” Moffett wrote.
Last week’s FCC order signing off on an agreement expected to clear the way for AT&T to use its Wireless Communications Service spectrum for LTE in part of the country (CD Oct 18 p1) also raises a number of questions, said an article on Hogan Lovells policy blog (http://xrl.us/bnvtaq). “Stripped of all pretense, the new rules allow AT&T, as more or less the only remaining licensee in the WCS band, to sacrifice five megahertz of spectrum on either side of satellite radio to gain access to twenty megahertz of mobile broadband spectrum,” the article said. “Given its desire for additional capacity, AT&T seems to have made a rational economic choice for its shareholders. But, as a public policy matter, does idling one-third of a valuable spectrum band make any sense in a time of constrained spectrum resources? Or would the public interest have been better served by requiring the satellite radio operator to improve the performance of its receivers and deploy better performing terrestrial repeaters?” Bigger questions remain, the article said. “The long, sad tale of WCS spectrum raises the question of whether incumbent operators such as satellite radio should always receive as substantial protection against new entrants. After all, AT&T only really ’solved’ the problem of WCS interference by sacrificing ten megahertz of valuable broadband spectrum to enable use of the remaining twenty megahertz that it controlled. Few other spectrum licensees have that luxury."
European Digital Agenda Commissioner Neelie Kroes opposes a sending-party-pays provision in the ITU’s International Telecom Regulations (ITRs), she said in an Oct. 22 answer to a European Parliament question (http://xrl.us/bnvtv6). Judith Sargentini of the Netherlands and the Greens/European Free Alliance had asked what Kroes meant by “managed services,” and whether Internet search engines, video sites and social networks fall under the heading. Sargentini asked whether Internet content companies could sign contracts with ISPs for faster and better transmission of their data in exchange for payment of termination rates, and whether the European Commission perceived any danger that, in purchasing priority online, large and rich Web content companies could reduce the opportunities for smaller and new entrants. Sargentini also sought comment on the Dutch government’s objections to the European Telecommunications Network Operators Association’s contention that termination tariffs could hamper suppliers of services and applications from continuing to offer those services, and ETNO’s contention that an automatic deduction system in which costs are passed on through termination tariffs is likely to cause economically less efficient results than if tariffs are charged directly to end-users. The lawmaker also asked Kroes why the EC, in its proposal for the EU position at the upcoming World Conference on International Telecommunications, said nothing about net neutrality. Kroes replied that managed services provide access to applications and content with a certain quality of service level. ISPs may enter commercial agreements with content providers to ensure that technical properties of specific content or applications are controlled from end to end, she said. Some applications need a specific QoS level, such as Internet Protocol TV, VOD and business services such as virtual private networks, she said. Not all services referred to in the question need quality control, she said. E-communications operators should be able to market managed services, but to protect the Internet’s capacity to innovate, the provision of those services should not lower the quality of the “best effort” Internet, Kroes said. The EC is committed to maintaining the Internet as an open platform for innovation or all providers, she said. The EC backs the Dutch government’s position on ETNO’s proposal, she said. “Generally, the Commission believes that the ITRs are not the appropriate forum for setting compensation and tariff systems.” The EC proposal seeks to ensure that the scope of existing ITRs isn’t extended, especially with regard to Internet-related matters, Kroes said. The absence of any specific ITR provisions doesn’t prevent the EU from taking regulatory or legislative actions in that area, she said. The U.S., European countries and the EU have now explicitly nixed ETNO’s proposal, which appears to be supported only by repressive Arab and African regimes, European Internet Services Providers’ Association board member Innocenzo Genna wrote on his blog (http://xrl.us/bnvtwr). Remarkably, despite the opposition, the incumbents are moving ahead, he said. But the final shape of ETNO’s proposal remains unclear and the organization is reportedly considering its withdrawal (CD Oct 24 p5).
The FCC Media Bureau reiterated that noncommercial educational stations may not broadcast promotional announcements on behalf of for-profit entities. Such stations can engage in enhanced underwriting “that allows NCE stations to acknowledge and identify contributors on air,” the bureau said in a letter to Sen. Dan Coats, R-Ind. Such acknowledgments can include slogans and value-neutral descriptions of contributors’ products and services, “but may not promote or make qualitative or comparative statements regarding contributors,” the bureau said. This year, Coats asked in a letter to Chairman Julius Genachowski that the commission for assurance that all NCE public interest obligation channels can continue to air “limited messages from for-profit entities that sponsor numerous programs on their stations.” The bureau also informed Coats of the notice of proposed rulemaking in docket 12-106 that proposes allowing NCE stations to allocate up to 1 percent of broadcast time to conduct on-air fundraising for third party non-profit entities (CD April 27 p8). NPR reiterated its concerns about operational and fundraising raised by the NPRM. NPR is concerned about stations being inundated with requests from local nonprofits, “facing pressure to fundraise for affiliated parties and the proposal’s impact on fundraising from individual listeners,” it said in an ex parte filing in that docket (http://xrl.us/bnvt3q). The filing recounted a meeting last week with staff from Commissioner Robert McDowell’s office.