Tag Archives: vod

Comcast Ramps X1 Set-Top Boxes As FCC Plans Market Makeover

Comcast[ ticker symb=CMCSA] is pulling out all the stops marketing its Xfinity video service and its new set-top boxes, at a time when the FCC plans to stoke set-top competition. The nation’s No. 1 cable TV firm advertised its Xfinity video-on-demand service during Super Bowl 50, where the big game’s ad rates were quoted at $2.5 million-plus for 30-second slots. Moreover, Comcast this year launched a social media campaign targeting millennials. Comcast paid Twitter ( TWTR ) to co-develop short Web videos from 19 social media personalities based on their Xfinity product experiences. The social media personalities posted videos on platforms such as Instagram and Vine while Twitter promoted them in tweets. Meanwhile, Comcast says its field technicians are installing 40,000 advanced X1 set-top boxes per day in homes. Some 30% of Comcast’s video customers — more than 7 million — were using X1 set-top boxes as of Jan. 1. By year-end, Comcast expects at least half of its 22 million video subscribers will be using Internet-ready, X1 set-top boxes in their homes. Comast is getting pay-back for its Xfinity marketing push. Comcast added 89,000 video customers in Q4, its biggest quarterly net gain in TV subscribers in eight years. Some analysts forecast Comcast could see a net add in TV subscribers in 2016, despite a trend toward Internet video among young adults, some of whom have never subscribed to pay-TV. “We’ve got to play offense with things like X1,” Comcast CEO Brian Roberts said on the company earnings conference call this month. Comcast’s capital spending is expected to rise 8% in 2016 to $9.2 billion, driven by its X1 deployment and spending at NBCU Universal theme parks. Comcast Offering Short Web Video Clips The X1 entertainment platform provides access to live broadcast, on-demand video and DVR-stored content. In November, Comcast partnered with 30 broadcast and cable networks to bring short-form Web clips to X1 set-tops, as part of its video-on-demand (VOD) lineup. Internet search, Web browsing and a Netflix ( NFLX ) app are not, for now, part of X1. DVR-stored content is in the Internet cloud, not the set-top, providing more space. Customers can watch DVR content on mobile devices as well as TV sets. Analysts say Comcast has put a lot of work into developing a cloud-based TV channel guide and user interface, a voice-controlled remote, programming recommendations, on-screen sports app and social media features for sharing video. “X1 represents the industry’s best-in-class technology due to the volume of content available, the flexible cloud infrastructure and the simplicity of its user interface,” Nomura analyst Anthony DiClemente said in a recent research report. Comcast has a huge VOD library of movies and TV shows. It aims to take advantage of marketing opportunities, such as the Oscars. Comcast in February provided some 20 past Academy Award winners on X1 VOD  as well as content gleaned from past Oscar telecasts. With X1, one goal is to drive up subscribers’ average monthly spending, with VOD and other purchases. Aside from video subscriber gains, the company eyes ad gains. Comcast aims to use viewing data gleaned from set-top boxes for targeted advertising — inserting commercials for specific audiences into VOD and other programming. To protect privacy, set-top viewing data is aggregated and anonymous. Comcast has acquired two companies, FreeWheel and Visible World, to build up its targeted-advertising platform. The cable TV firm also has been working with content companies.  Amid falling TV audience ratings, they’re eager to obtain TV data on par with digital platforms. Advertisers have upped their spending on the Internet, where they can target individuals based on what websites they visit and what searches they conduct. FCC Wants More Set-Top Competition Amid Comcast’s big Xfinity push, federal regulators now aim to increase competition in the set-top box market. The Federal Communications Commission plans to make it easier for consumers to switch from set-top boxes leased monthly from pay-TV companies to new devices sold at retail by consumer electronics or Internet companies. Besides Comcast, the initiative could impact Charter Communications ( CHTR ), Time Warner Cable ( TWC ),   AT&T ( T ) and other pay-TV firms that lease set-top boxes for a monthly fee. The new set-top rules could be approved by year-end, though the pay-TV industry is waging a fight against them, with some support in Congress. The cable firms say the new rules aren’t needed in an arena where innovation sparks fast changes. In any case, it could take until 2019 before more of these set-top consumer products appear in the market, because pay-TV companies would have two years to comply with new regulations. By then, Comcast would have a big head start in rolling out X1 technology. Still, new entrants in the set-top box market could match many X1 features, says Joel Espelien, an analyst at the Diffusion Group. “X1 is nice, but I seriously doubt any of its features are defensible in the long run,” he said. Even features such as cloud-based DVR storage may not set X1 apart, he added. “We see declining interest in DVR among millennials,” added Espelien. “They don’t get why they have to ‘record’ things.”

Verizon Edges AT&T As Top Telecom Brand; Comcast Xfinity In Top 10

Verizon Communications ( VZ ) once again had the top-ranked global telecom brand among service providers, though cable firm Comcast ’s ( CMCSA ) Xfinity service cracked the top 10 for the first time, according to U.K.-based research firm Brand Finance. Among telecom network gear makers, China’s Huawei overtook Cisco Systems ( CSCO ) for the top spot worldwide, Brand Finance said. Verizon’s brand is ranked No. 6 globally among all technology companies, behind Apple ( AAPL ), Alphabet ‘s ( GOOGL ) Google, Samsung, Amazon.com ( AMZN ) and Microsoft ( MSFT ). In the U.S., Verizon edged out AT&T ( T ) in branding power. Wireless service providers are among the biggest advertisers. AT&T, which acquired satellite TV broadcaster DirecTV in July, has so far kept the DirecTV brand in its marketing. Comcast’s Xfinity ranked No. 10 globally in the Brand Finance report. Analysts credit Comcast’s Xfinity service platform with improving video subscriber results, owing to video-on-demand and cloud DVR features. Verizon has ramped up marketing for its new Go90 mobile video service, including live concerts and billboards, but Verizon’s own brand doesn’t appear in its Go90 commercials. The mobile video service can be downloaded as a mobile app by non-Verizon subscribers, though some features and perks are available only to Verizon customers. “Verizon’s most important milestone after the last year was the completion of its acquisition of AOL , a deal which significantly bolsters Verizon’s potential content offering. It is also reinforcing its established mobile dominance by pioneering the use of 5G,” said the Brand Finance report. The top 10 global telecom service brands also include: China Mobile ( CHL ), Deutsche Telekom ( DTEGY ), Vodafone Group ( VOD ), Softbank ( SFTBY ), Orange, BT and Japan’s NTT ( NTT ).

Verizon: Yahoo Vulture Or White Knight Bearing AOL Synergies?

Yahoo ( YHOO ) stock slid 3% the past week, even though telecom  Verizon Communications ( VZ ) has talked up its interest in buying some Yahoo assets “at the right price.” That’s what Verizon CEO Lowell McAdam told CNBC’s Jim Cramer on a Feb. 5 broadcast of “Mad Money.” Then on Monday, reports surfaced that Verizon had put AOL Chief Executive Tim Armstrong in charge of exploring a Yahoo acquisition. Verizon acquired AOL for $4.4 billion, including about $300 million in AOL debt, in June. Yahoo shareholders may be unimpressed over what Verizon could pony up, some analysts say. Verizon paid about eight times EBITDA (earnings before interest, taxes, depreciation and amortization) for AOL. AOL’s Internet business, however, had been improving, unlike Yahoo’s. Verizon could be vulture-like and wait for struggling Yahoo to struggle more — Yahoo announced its first round of layoffs on Wednesday amid growing management defections. But analysts say Verizon hopes Armstrong can woo Yahoo on good terms. (Verizon hasn’t hired bankers and there have been no formal talks, according to reports.) If Yahoo sells off its core Internet operations, shareholders would expect a special one-time dividend down the road from whatever is left of the company as the result of a possible “reverse spin” involving its stake in China e-commerce leader Alibaba ( BABA ). Verizon Balance Sheet May Be Challenge Could a Verizon-Yahoo deal be do-able, given that Verizon’s balance sheet is somewhat stretched already? Credit rating agencies Standard and Poor’s and Moody’s have not commented on Verizon’s interest in Yahoo. Verizon debt has an investment-grade Baa1 rating. Verizon had $4.5 billion in cash on its balance sheet as of Dec. 31. Verizon bought out U.K.-based Vodafone Group ’s ( VOD ) 45% stake in their Verizon Wireless joint venture for $130 billion in 2014, adding a ton of debt. Verizon ended 2015 with $105.7 billion in net debt. Verizon expects the sale of residential wireline assets in  California, Florida and Texas to Frontier Communications ( FTR ) to close in late March. Verizon stated last year that it expects to garner $6.8 billion in net cash proceeds from the Frontier deal. Paying down debt had been Verizon’s priority. Verizon is expected to take part in a U.S. auction of TV broadcaster radio spectrum slated to start as soon as next month. In a research report Thursday, JPMorgan estimated that Verizon, despite talking down its interest in the auction, could spend $8 billion. Whatever Verizon does spend, it would not have to pay the government until year-end 2016 or later. At Barclays, analyst Amir Rozwadowski said the key to a Verizon-Yahoo deal, from a Verizon shareholder’s view, is whether “Verizon would be purchasing an attractive call option or an expensive declining business.” That depends in part on the valuation of Yahoo’s Internet business, as display advertising growth declines. UBS analyst John Hodulik said in a research report that “while Yahoo has had a mixed record transferring its success to mobile, the company remains the third-most-visited site for digital video.” Rozwadowski estimates Yahoo’s core 2016 EBITDA (excluding Yahoo Japan and Alibaba equity interests) at around $710 million. Depending on what EBITDA multiple Verizon were to pay, a deal might wind up costing the phone company in the mid-single-digit billions of dollars. Rozwadowski’s view: “We would consider a potential Yahoo acquisition as a ‘tuck in,’ with minimal financial impact and of small enough size that it would not derail any of the carriers’ operational or financial initiatives.”