Tag Archives: dis

Verizon Seen Putting ESPN In Skinny TV; Disney Praises Dish Sling

Verizon Communications ( VZ ) will bite the bullet and include sports channel ESPN in its “Custom TV” package, giving Walt Disney ( DIS ) a boost amid worries over falling pay-TV subscribers, speculates Deutsche Bank in a research report. “We believe Verizon will soon adjust its Custom TV packages to include ESPN in the base tier, which will be one less source of pressure on ESPN subscribers,” said Bryan Kraft, an analyst at Deutsche Bank, in the report. Verizon launched Custom TV in April. Custom TV isn’t delivered via the Internet; it’s for pay-TV customers with set-top boxes.  Plans start at $55 per month for 35 channels. Verizon’s base package has excluded Disney’s ESPN, which garners the highest fees among cable networks. Disney sued Verizon claiming it doesn’t have rights to exclude its sports channel from TV bundles under programming deals. On Verizon’s Q4 earnings conference call Jan. 21, Verizon CFO Fran Shammo spoke to the issue. “Look, this (dispute) will go its course,” he said. “They’re a great partner of ours; we will continue to work with them and I’m not going to speak to the actual lawsuit.” Speaking more generally, Shammo also said:  “Custom TV . . . we will refresh that here in the short term to be in compliance with the contractual arrangements that we need to be in compliance with.” Disney, on its Q1 earnings call on Tuesday, had good things to say about Sling TV, an Internet service offered by satellite TV broadcaster Dish Network ( DISH ). Disney CEO Iger: Sling ‘Quite Successful’ “We’re also pleased with what we’re hearing from Dish about the response to Sling TV, a light package that includes ESPN,” Disney CEO Bob Iger said on the call. “The service appears to be growing nicely and is proving very attractive to young consumers in particular, significantly over indexing among millennials, and has been quite successful in bringing previous cord cutters back to pay TV.” Dish rolled out its $20-per-month Sling service in January. Dish did not include the four major broadcast networks, opting instead to go with ESPN. Sling had 240,000 subscribers as of June 30, analysts estimate. Dish Network did not update Sling’s subscriber total when reporting Q3 earnings. Goldman Sachs has forecast that Sling could hit 2 million by year’s end. Disney’s ESPN is also not part of Comcast ’s ( CMCSA ) over-the-top “Stream” TV service. Comcast’s Stream is available in Boston, Chicago and, according to its website, parts of Indiana and Michigan. Stream requires that customers have a broadband connection from Comcast. The service works with Apple ( AAPL ) TV, Roku and other streaming devices. No set-top box is required. Comcast on its Q4 earnings call did not disclose how many Stream users were included in its 89,000 video subscriber additions. Comcast’s Stream service includes the major live broadcast networks — ABC, CBS, NBC and Fox — along with HBO and local TV channels.

Twitter Advertising Growth, User Numbers, Under Pressure In Q4?

When Twitter ( TWTR ) reports earnings on Wednesday, analysts will be looking to see if the social media firm known for its global reach has managed to boost its user numbers. During the past year, Twitter has brought in a new CEO, made numerous other executive suite changes, acquired new companies and added new services. Still, its user numbers are expected to remain stagnant in Q4, and Twitter remains under fire from Wall Street. Twitter stock has remained below its 2013  IPO price of 26 since November as analysts worry about the impact that sluggish user growth will have on Twitter’s profitability, as the microblog’s user base could affect its ultimate ability to charge for ads. “We believe positive ad pricing trends drove Q4 revenue towards the high end of guidance, but user growth likely was stagnant,” wrote Wedbush analyst Michael Pachter on Friday in an industry research note. On Friday, Twitter stock tumbled to close at near a record low after getting a price target cut from Wedbush. The investment bank predicts that Twitter won’t show meaningful user growth when it reports Q4 earnings, because the service remains too hard for the average user to figure out, compared to other social media. Monthly active users of the service — excluding SMS Fast Followers who can get tweets on their phones without being registered users — rose by just 5 million to 307 million from Q1 to Q3, Pachter wrote. He doesn’t appear to have high hopes for Moments, the service that Twitter launched last fall to showcase hot news topics and draw more non-registered users to the site. “We do not think that Moments drove a meaningful increase in users, as much of the content remains outdated or irrelevant,” said Pachter. Attrition of high-level staff is also a concern. In late January, Pachter said, Twitter CEO Jack Dorsey announced that the SVP of Engineering, SVP of Product, VP of Global Media and VP of Human Resources had all “chosen to leave,” with the GM of video service Vine also departing. “We believe that had Moments been an early success, the executives would not have left so soon, voluntarily or otherwise,” Pachter said. He said that since Facebook ( FB ) reported that its average price per ad was up 21% year over year in Q4 — with the increase driven in part by the shift to mobile — “positive ad pricing trends drove Q4 revenue towards the high-end of guidance” for Twitter, too. Wedbush cut its price target on Twitter stock to 20 from 30, and Pachter maintains a neutral rating on Twitter stock. Advertising, which makes up 90% of Twitter’s total revenues, will “see continued deceleration over time,” wrote RBC Capital Markets analyst Mark Mahaney in a report on Friday. “Our concern for some time has been that Twitter’s lack of real-time commercial intent (a la Alphabet ( GOOGL )-owned Google) or detailed, authentic profiles (a la Facebook) will eventually limit Twitter’s growth potential.” Mahaney said that he expects Twitter to generate $2.02 for every monthly active user in Q4 vs. Facebook’s $3.59, compared with $1.60 and $2.83 in Q3. Analysts polled by Thomson Reuters are modeling Twitter to post revenue of $709.9 million, up 48% year over year. The consensus opinion is that Twitter’s EPS ex items will remain flat year over year at 12 cents. For Q1, analysts polled by Thomson Reuters expect Twitter to see revenue rise 44% to $629.3 million and post EPS ex items of 8 cents, up 14% year over year. In late January, Cantor Fitzgerald analyst Youssef Squali said that Twitter’s muted stock price might prompt a buyout of the social media company. “Twitter’s current valuation, unique offering and sizable user base makes it a strategic asset for a number of potential buyers, be they technology or media companies,” wrote Squali, who maintained a buy rating on Twitter stock. He said a buyout of Twitter is a little easier than for some other companies because “there is no concentration of share ownership and no super-voting structure, with the top three shareholders owning 6.4%, 5.1%, and 5.0%, respectively.” Besides Facebook, Squali says potential suitors for Twitter, which has a market value near $11 billion, include tech companies Alphabet and Microsoft ( MSFT ), as well as media companies Twenty-First Century Fox ( FOXA ), Walt Disney ( DIS ), Comcast ( CMCSA ) and Time Warner ( TWX ). Late Friday, Buzzfeed reported that Twitter might abandon its reverse chronological timeline display and switch to an algorithimic system.

Twitter User Numbers Expected Stagnant In Q4, Will Ad Revenue Grow?

Twitter ( TWTR ) stock continued to free fall on Friday. It again tumbled close to a record low after getting a price target cut from Wedbush, which predicts that the social media company won’t show meaningful user growth when it reports Q4 earnings next week because the service remains harder for the average user to figure out than its peers in the social space. “We believe positive ad pricing trends drove Q4 revenue towards the high end of guidance, but user growth likely was stagnant,” wrote Wedbush analyst Michael Pachter in an industry note on Friday. Monthly active users of the service (excluding SMS Fast Followers, who can get tweets on their phones without being registered users) rose by just 5 million to 307 million from Q1 to Q3, he said. Wedbush cut its price target on Twitter stock to 20 from 30. Wedbush maintains a neutral rating on Twitter stock. Social media leader Facebook ( FB ) last week reported that mobile strength boosted its average price per ad by 21% year over year in Q4. Judging by that, Twitter likely also saw an ad pricing uptick with “increased engagement, up 165% year over year in Q3,” Pachter said. The rise likely offset lower cost per engagement to the consumer (down 39%) due to the shift to auto-play from click-to-play video ads, he said. But some new efforts aren’t working. “We do not think that Moments drove a meaningful increase in users, as much of the content remains outdated or irrelevant,” said Pachter, referring to Twitter’s Moments service, launched last fall, which showcases the hottest news stories. Also, he said, “Twitter remains difficult to use relative to its peers, and a solution does not appear to be imminent.” Twitter stock was down more nearly 6% in early-afternoon trading in the stock market today , near 16 and not far above its record low of 15.48 brushed in late January. Twitter is down 78% from its all-time high of 74.73, touched in late December 2013. It’s been below its IPO price of 26 since mid-November. With its stock so low, buyout talk has emerged, with rumored acquirers including Alphabet ( GOOGL )-owned search giant Google, along with traditional media companies Comcast ( CMCSA ), Walt Disney ( DIS ) and News Corp. ( NWS ). News Corp. discounted the rumors, according to Reuters . Twitter’s efforts to expand its user base aren’t gaining traction. It has launched programs to reel in “logged out” users who visit Twitter’s site but don’t have accounts of their own, making them less coveted by advertisers. Twitter posted Q3 earnings and revenue that beat Wall Street views, but its user growth slowed and its Q4 sales guidance missed analyst estimates. For Q4, Twitter guided revenue of $695 million to $710 million, up 46% at the midpoint but below the $739.7 million that analysts polled by Thomson Reuters had originally modeled; they now expect $709.94 million. Analysts polled by Thomson Reuters originally expected Q4 EPS ex items of 14 cents, up 17%. But they have revised their EPS ex items estimate to 12 cents. Twitter reports earnings on Feb. 10 after the stock market close.