Tag Archives: dish

Rovi Soars On Q4 Earnings; Focus Shifts To Comcast, Dish Renewals

Rovi ( ROVI ) stock jumped as much as 19% Friday to an 11-month high, following the company’s fourth-quarter earnings late Thursday that beat estimates, as revenue growth reversed four straight quarters of deceleration. The focus now shifts to first-quarter performance and Rovi’s ability to renew licensing agreements with Comcast ( CMCSA ) and Dish Network ( DISH ). Rovi provides technology for interactive TV program guides licensed by AT&T ( T ), Comcast, Time Warner Cable ( TWC ), Dish and others, used for interactive TV guides and video-on-demand services. It also provides advertising services, including Big Data analytics that provides TV-audience insights and ad campaign management in various entertainment sectors. It posted Q4 revenue of $149.5 million, up 11% year over year and topping the consensus estimate of $130.7 million. It was the first time in five quarters that Rovi revenue accelerated. It reported earnings per share minus items of 65 cents, smashing estimates of 37 cents. That reversed four straight quarters of slower EPS growth. Rovi stock was up 14%, near 20.50, in afternoon trading in the stock market today . During Q4, Rovi renewed a technology licensing agreement with AT&T, which now includes the DirecTV footprint, for a seven-year term, in addition to a renewed licensing agreement with Sony ( SNE ). “In 2016, Rovi is focused on successfully renewing our IP Licenses with Comcast and Dish and on building our product portfolio,” Rovi CEO Tom Carson said in  the earnings release . “We believe achieving these goals will help drive stockholder value for years to come.” While Rovi said it expects to successfully renew agreements with Comcast and Dish, its revenue and EPS from those agreements are not included in current estimates. Excluding revenue from Comcast and Dish, Rovi anticipates 2016 revenue of $490 million to $520 million and EPS less items of $1.35 to $1.65. Andy Hargreaves, analyst at Pacific Crest Securities, said the renewals with Comcast and Dish remain likely but are far from certain. “Rovi is in the latter stages of negotiations with Comcast and Dish, as the current deals expire over the next two months,” Hargreaves wrote in a research note. “Rovi’s history suggests it is more likely than not to complete the deals successfully, but a delayed negotiation or even a lawsuit remains highly possible, either of which could drive significant stock volatility.”

TV Auction View: AT&T, VZ Top Bidders; Comcast In; Google, AMZN Out

JPMorgan is bullish on the upcoming “Broadcast Incentive Auction,” which will free up prime, low-frequency airwaves owned by local TV broadcasters for wireless data services. Naysayers continue to contend that the Federal Communications Commission faces many challenges in pulling off a successful auction, which for now is scheduled to start late next month. One risk is that broadcasters might drop out of the auction if they determine that bidding prices are disappointing. The auction is key for T-Mobile US ( TMUS ), which needs spectrum.  AT&T ( T ) and Verizon Communications ( VZ ) own most of the available low-frequency spectrum, in which waves travel longer distances, among other advantages over higher-frequency spectrum. JPMorgan expects at least 70 MHz of airwaves, and possibly more, to be auctioned. The key is that broadcasters that own two local TV stations will sell off airwaves from one and keep spectrum from the other, says JPMorgan. “We estimate that 70-100 MHz will be auctioned, for $25 billion to $35 billion,” said JPMorgan in a research report. Twenty-First Century Fox ( FOXA ) and  CBS ( CBS ) are expected to sell airwaves in some markets. While Comcast ’s ( CMCSA ) cable company is a potential bidder , it also owns media firm NBCUniversal, a likely seller of airwaves. Smaller local TV station owners include  Sinclair Broadcast Group ( SBGI ) and  Gray Television ( GTNA ). “We view FOX and CBS as best positioned to monetize duopoly affiliates in large markets, followed by Comcast and Sinclair,” said JPMorgan. Walt Disney ( DIS ), which owns ABC, is not expected to sell airwaves. Private investment firms such as Columbia Capital are eyeing the auction, says a Washington Post report . JPMorgan predicts cable TV firms will show up, but it doubts that Internet giants will bid. “We expect that AT&T, Verizon, and T-Mobile will be the biggest bidders ($21 billion-$30 billion cumulative spend), that Sprint ( S )/ SoftBank ( SFTBY ) will not register, and Dish Network ( DISH ) will at most be an opportunistic buyer,” said the JPMorgan report. “We estimate Comcast, potentially in partnership with other cable companies, could spend $3 billion-$5 billion, and private equity funds in aggregate could spend $1 billion-$2 billion. “We do not expect digital economy players like Alphabet -Google ( GOOGL ) or Amazon.com ( AMZN ) to bid, though they can never be ruled out.”

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.