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21st Century Fox

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Georgia Velkes, Jenna Levine, and Gabrielle Marzolf

Overview

21st-cnetury-fox-logo

In 1985, News Corporation, a newspaper company from Australia owned by Rupert Murdoch, acquired Twentieth Century Fox Film Corporation. Murdoch subsequently
built the company into one of the biggest media companies in the world. [1]

Rupert Murdoch Executive Chairman

Rupert Murdoch
Executive Chairman

In 2012, News Corporation split into two companies. News Corporation kept all the newspaper assets and media assets were put into a new company named 21st Century Fox. 21st Century Fox has holdings in multiple media businesses internationally and in the United States, including broadcast and cable television networks like FOX, FX, Fox News Channel, and National Geographic, which reach over 1.8 billion subscribers. [2] The film company, 20th Century Fox, is one of the Big Six Hollywood Studios that produce and distribute films worldwide.

 

 

Financials

The company had a strong fiscal quarter ending September 30, 2016 with total revenue increasing 7% to $6.51 billion and a net income increase of 22% to $821 million. [3] A significant portion of that boost came from the Cable Network Programming division.

Gretchen Carlson, former anchor at Fox News

Gretchen Carlson, former anchor at Fox News

The Fox News Channel experienced significant growth, despite the Roger Ailes scandal in the beginning of the quarter, in which former anchor Gretchen Carlson sued Ailes for sexual harassment. Fox settled the lawsuit, which incited controversy throughout the company, and Ailes resigned. During the lawsuit, Fox faced great controversy and criticism, which increased when Ailes left the company with a $40 million exit agreement.

Roger Ailes, former CEO/Chairman of Fox News

Roger Ailes, former CEO/Chairman of Fox News

In spite of the controversy, cable revenues increased 10% to $3.81 billion, driven by higher ratings and advertising revenue. The US presidential election, broadcasted on Fox News, increased domestic advertising revenue by 6% and gained the network more viewers. The film business revenue increased more than 6.8% to $1.91 billion which is credited to the theatrical release of “Independence Day: Resurgence” and the home entertainment release of “Deadpool” during the quarter. [4] The positive earnings release showed a 14.6% rise in the stock price over the past 3 months, gaining $3.62. [5]

 

New Licensing Agreements

As the television industry and television consumption transforms, 21st Century Fox’s goal is to become a central player in the new digital age. Fox Networks Group recently made a deal with AT&T Inc. and its DirecTV subsidiary. DirectTV launched a streaming service called DirecTV Now that allows viewers to stream their programming instead of watching it via satellite transmission. Fox News, Fox Business, FX and many more Fox networks will be available on AT&T’s live streaming service in addition to the content offered to DirecTV subscribers. [6] Fox has also made a licensing deal with Hulu to carry Fox channels on the new over-the-top (OTT) live TV subscription service Hulu will soon release. [7] The deal includes the FOX broadcast network along with the Fox Sports channels, National Geographic and more.

While 21st Century Fox licenses content to companies that partner programming with new technology like OTT providers, issues have arisen with subscriptions services like Netflix. In September, 21st Century Fox filed a lawsuit against Netflix for illegally “poaching” two under-contract executives: Tara Flynn, the former VP of Creative Affairs at Fox21, and Marcos Waltenberg, the former VP of Promotions at 20th Century Fox. [8] In retaliation, Netflix sued 21st Century Fox for the alleged use of illegal contract clauses. The outcome of these lawsuits could potentially impact how businesses manage employment contracts in the future. [9]

 

TV Ratings

This past quarter Fox Networks Group saw a huge increase of ratings with not only the presidential election and Fox News, but also the FOX network as a result of their rights to the World Series.

Fox News (http://www.foxnews.com)

Fox News (http://www.foxnews.com)

Huge interest in this year’s presidential election saw primetime coverage reach a total of 71 million viewers, and Fox News channel’s 12.2 million viewers beat out CNN’s 11.2 million views for the most viewers of any cable channel for the 7pm-3am time slot, leaning toward a generally conservative audience. [10]  When the election results announced Donald Trump as president elect, Fox News Channel maintained over 10 million viewers.

This fall, Fox’s overall ratings for the season rose from fourth to first place, with nearly 40 million viewers and a 12.1 rating with the 18-49 demographic. Previously, NBC was the number one network, however the World Series ratings boosted Fox to the top with an 8% advantage over its competitors. [11] Furthermore, unlike other networks, Fox has not experienced a ratings drop related to professional football broadcasting. Analysts suggest that Fox retained viewers because the network does not show any primetime games and delivers the best overall Sunday coverage including their post-show program, The OT. [12] Over Thanksgiving, Fox Sports aired the Washington Redskins versus Dallas Cowboys game, which, with 35.1 million viewers, was the highest rated program of the holiday and the highest rated NFL game to date. [13]

20th Century Fox

20th Century Fox

20th Century Fox

Unlike the other business divisions of 21st Century Fox, the film studio exhibited a weak performance over the past year, which resulted in leadership changes. Over the summer official Fox sources announced that the Chairman/CEO of the studio, Jim Gianopulos, would leave and Stacy Snider would replace him. [14] Since Snider has taken over, she has made a number of changes senior management, resulting in the departure of the marketing president Marc Weinstock, who left for Annapurna Pictures. [15]

Deadpool (2016) official movie poster

Deadpool (2016) official movie poster

With all the personnel changes at the studio, senior management is focusing on the upcoming slate of movies for the next two to three years. After the commercial success of “Deadpool”, the studio faces pressure to release similarly profitable films. “Avatar 2” has been rumored to be released around Christmas 2018, so the studio will face pressure to follow up the highest grossing film of all time at the global box office. Fox’s film adaption of “Assassin’s Creed” generated anticipation of how the company would transition the content from a video game format to the big screen. [16]

The film is not yet released, but the hype surrounding the film shows that Fox is not afraid to take risks, and presents the company as more forward thinking.

Fox has the production and distribution rights to Marvel characters related to the X-Men property, including X-Men, Deadpool and Wolverine. Between films utilizing these characters and sequels to popular franchises—“Alien: Covenant”, “Kingsman: Golden Circle” and a total of four Avatar sequels—the studio has a significant amount of content to exploit over the next two to five years. [17]

Conclusion

Overall, 21st Century Fox is well poised for continued growth in revenue and income going forward.  Strong licensing revenue to emerging and existing OTT providers as well as traditional networks and broadcasters is expected to continue and a strong pipeline of franchise tentpole films over the next three to five years should ensure continued financial success of the film studio.  The introduction of new leadership at the studio and Fox News will ensure continued growth and success at these important divisions of the company.

References:

[1] 21st Century Fox. Rupert Murdoch. Retrieved November 29, 2016. https://www.21cf.com/managment/rupert-murdoch

[2] 21st Century Fox. Investor Relations. Retrieved November 29, 2016. https://www.21cf.com/investor-relations

[3][4] Lang, Brent. November 2, 2016. Variety. 21st Century Fox Earnings Get Lift From Fox News, ‘Deadpool’ Home Entertainment Debut. Retrieved November 29, 2016. http://variety.com/2016/film/news/21st-century-fox-earnings-get-lift-from-fox-news-deadpool-home-entertainment-debut-1201907353/.

[5] Nasdaq. FOXA Earnings Data. Retrieved November 29, 2016. http://www.nasdaq.com/earnings/report/foxa

[6] Moritz, Scott. November 21, 2016. Bloomberg. AT&T Expands Fox Programming Pact to Include Online TV Service. Retrieved November 29, 2016. https://www.bloomberg.com/news/articles/2016-11-21/at-t-expands-fox-programming-pact-to-include-online-tv-service

[7] Spangler, Todd. November 1, 2016. Variety. Hulu Inks Disney, 21st Century Fox Deals for Internet TV Service. Retrieved November 29, 2016. http://variety.com/2016/digital/news/hulu-disney-21st-century-fox-live-tv-1201906066/

[8] Flint, Joe. September 16, 2016. Wall Street Journal. 21st Century Fox Sues Netflix for Poaching Employees. Retrieved November 29, 2016. http://www.wsj.com/articles/21st-century-fox-sues-netflix-for-poaching-employees-1474053655

[9] Patten, Dominic. October 19, 2016. Deadline. Netflix Hits Back At Fox In Exec-Poaching Lawsuit, Claims Studio “Bullies” Employees Into Contracts. Retrieved November 29, 2016. http://deadline.com/2016/10/netflix-fox-lawsuit-cross-complaint-executive-poaching-1201839020/

[10] O’Connell, Michael. November 9, 2016. The Hollywood Reporter. TV Ratings: 71 Million Watched 2016 Election Returns Pour In; CNN and Fox News Set Records. Retrieved November 29, 2016. http://www.hollywoodreporter.com/live-feed/tv-ratings-nbc-leads-early-election-night-numbers-945493

[11] [12] O’Connell, Michael. November 4, 2016. The Hollywood Reporter. World Series Catapults Fox to No. 1 Slot for the Fall Season. Retrieved November 29, 2016. http://www.hollywoodreporter.com/live-feed/world-series-catapults-fox-no-1-slot-fall-season-944192

[13] O’Connell, Michael. November 25, 2016. The Hollywood Reporter. TV Ratings: NBC Parade Climbs – But Fox Football Dominates Thanksgiving. Retrieved November 29, 2016. http://www.hollywoodreporter.com/live-feed/tv-ratings-nbc-parade-climbs-but-fox-football-dominates-thanksgiving-950471

[14] Fleming, Mike, Jr. June 16, 2016. Deadline. Fox Makes It Official: Stacey Snider Is Chairman/CEO In June 2017; Jim Gianopulos Takes Role At 21st Century Fox. Retrieved November 29, 2016. http://deadline.com/2016/06/jim-gianopulos-stacey-snider-fox-executive-changes-1201773922/

[15] McClintock, Pamela. November 7, 2016. The Hollywood Reporter. Fox Shake-Up: Marketing President Marc Weinstock Departing Studio. Retrieved November 29, 2016. http://www.hollywoodreporter.com/news/fox-shake-up-marketing-president-marc-weinstock-departing-studio-944878

[16] Pech, Dana. November 9, 2016. Movie Pilot. Why ‘Assassin’s Creed’ Will Break The Video Game Movie Curse. Retrieved November 29, 2016. http://moviepilot.com/p/why-assassins-creed-will-break-the-video-game-movie-curse/4142547

[17] Chitwood, Adam. November 27, 2016. Collider. Fox Sets Release Dates for Two Secret Marvel Movies; Pushes ‘Kingsman 2’ to October 2017. Retrieved November 29, 2016. http://collider.com/fox-marvel-movies-release-dates-deadpool-3/

Images

(In order of appearance) 

[1] Retrieved November 29, 2016. https://www.zacks.com/stock/news/194013/what-rupert-murdochs-news-corp-and-21st-century-fox-really-own

[2] Retrieved November 29, 2016. http://www.wikimedia.org/wikipedia/commons/thumb/c/c8/Rupert_Murdoch_-_Flickr_-_Eva_Rinaldi_Celebrity_and_Live_Music_Photographer.jpg/220px-Rupert_Murdoch_-_Flickr_-_Eva_Rinaldi_Celebrity_and_Live_Music_Photographer.jpg

[3] Retrieved November 29, 2016. http://cdn.thedailybeast.com/content/dailybeast/articles/2015/06/26/how-a-fox-news-host-handled-sex-assault/jcr:content/image.img.2000.jpg/1435310106558.cached.jpg

[4] Retrieved November 29, 2016. http://www.adweek.com/files/imagecache/node-inline/media-visionary-roger-ailes-hed-2015.jpg

[5] Retrieved November 29, 2016. http://global.fncstatic.com/static/v/all/img/og/og-fn-foxnews

[6] Retrieved November 29, 2016. http://www.manutd.com/sitecore/shell/~/media/D971B02AD7A246678E4092D1D2AE12C6.ashx?w=1280&h=720&rgn=0,281,2160,1501

[7] Retrieved November 29, 2016. https://images-na.ssl-images-amazon.com/images/M/MV5BMjQyODg5Njc4N15BMl5BanBnXkFtZTgwMzExMjE3NzE@._V1_UY268_CR1,0,182,268_AL_.jpg

 

Scripps Interactive

Posted on by 
By Ryan Lannum & Aaron Sortal
[1] Scripps Interactive Network Logo

[1] Scripps Interactive Network Logo

Brief History [1]

Scripps Networks Interactive began in 1878 when Edward W. Scripps founded The Penny Press in Cleveland, Ohio. Jump forward a 100 years and Scripps Networks Interactive began buying and building cable television systems, making it one of America’s largest cable operators, which was later sold to Comcast. In the 1990s, Scripps Network Interactive began building their media network. After the purchase of Cinetel Productions, a Knoxville-based cable creator, it launched HGTV in 1994.

[1] Source: WBIR-TV 10 Knoxville / Scripps Network Interactive

After the launch of HGTV, Scripps Networks started more lifestyle networks including: Food Network (1997), DIY Network (1999), Fine Living Network (2002), Great American Country (2004), and Travel Channel (2009). The organization describes itself as a “niche broadband [of] channels that extend the core brands’ presence on the Internet with advertiser-supported, on-demand content” (Scripps Networks Interactive).

In 2007, the board of directors decided to split The E.W. Scripps Company into two publicly-traded companies. One of the organizations would concentrate on national television lifestyle brands and the other focus on innovative and enduring local media businesses.

Financials

screen-shot-2016-11-29-at-10-26-06-pm

Stock er-er the last 5 years [2]

Scripps Networks Interactive, Inc. has done very well financially the last few years.  At the end of 2015, Scripps’ revenue totaled $3.02 billion, with a total net income of $606.83 million [2].  This is a great increase from the previous years, as its 2014 net income totaled 545.28 million, and its 2013 net income totaled $505.07 million.  Their total net incomes are increasing at a steady rate, and will likely continue in the coming years.  While their stock price is lower than it was five years ago, it being at $70.06 now and 76.50 then, it has increased greatly in the past year, with the price being only $59.04 in November of 2015.

In the fall of 2016, Scripps Networks reported a 6.6 percent increase in advertising revenues, which totaled to a $477.5 million in advertising revenue during the quarter [3]. This jump in advertising revenue also added to five of the six networks having a ratings boost.  Focusing on ads that connect to the demographics that watch their channels resulted in tremendous success both in viewership and in revenue. The need for advertising revenue caused a major problem when it came to a subscription video on demand service deal with Netflix.

Netflix Deal Not Renewed for a New Season

Netflix Logo

Netflix Desktop [4]

During the fall of 2016, Burton Jablin, Scripps Networks Interactive’s COO, announced the organization would not be renewing its digital distribution deal with Netflix on the company’s quarterly earnings conference call [5]. This isn’t the first-time Scripps Networks Interactive has ended a subscription video on demand deal with a media distributor [6]. In February 2013, Scripps Networks Interactive had a deal with Amazon. That deal ended in March 2014. This prompted the Netflix and Scripps Networks Interactive deal that ended this past November. According to a Variety.com article, Scripps Networks could have lost about $11 million of licensing revenue from Amazon [6]. Unlike the deal with Amazon, the CEO of Scripps Networks Interactive, Kenneth Lowe, commented on the company’s decision to leave Netflix. Lowe stated that a major reason for leaving Netflix was the loss of advertising dollars [7], which brought-in roughly $445 million dollars in revenue during the last quarter [3]. Jablin said in a Variety.com article: “In the end, it really is not the kind of dual-revenue model that best monetizes our content over the long term” (Spangler). [8] Over the past couple of months, Netflix has removed content from its database because the company wanted to create room for its original content. All of Scripps Network’s shows will not be removed until the end of the year [7]. Some of the shows that are being removed are: “Cupcake Wars,” “Chopped,” and “Man v. Food.”

AT&T Long-Term Distribution Agreement

http://www.csc.com/global_alliances/alliances/112505-at_t

AT&T Logo [9]

In September of 2016, Scripps Interactive reached a deal with AT&T, in which they agreed for a continuation of distribution of Scripps Networks for DIRECTV [10].  This deal will be made for multiple years, ensuring that DIRECTV will continue its widespread distribution of the Scripps Network channels.  They also agreed to include Scripps Networks on DIRECTV’s streaming service, DIRECTV NOW.  Programs on channels such as HGTV, Food Network, Travel Channel, DIY Network, Great American Country, and Cooking Channel are included to be distributed through this deal.

As DIRECTV has over 20 percent of the market share of cable providers in the US, this deal will assist in allowing Scripps Networks’ programs to be distributed to as many people as possible [11].  DIRECTV is also expected to grow in market share in the next decade, so this deal will continue the great relationship Scripps has with AT&T.  With DIRECTV NOW launching at the end of November, it will also allow people whom prefer to stream their content the chance to view Scripps Network shows [12].  The portability of DIRECTV NOW will allow its customers to view Scripps Network shows at anywhere at any time, which will increase the flexibility and make it more likely that the shows will be viewed a lot more often than before.  DIRECTV NOW is also a lot cheaper alternative to established cable packages, so the low cost may also bring in a lot more viewers, in which can increase Scripps’ revenue and exposure.

DirecTV NOW Informational Video [13]

Pluto TV Financing

[14]

Pluto TV Logo [14]

Pluto TV is a television platform launched in 2014, which is solely internet-based [14].  They play content from over 75 different partners, including NBC, Bloomberg, Sky News, and Paramount Pictures [15].  The format is basically the same as a television network, as the programs are played in different time slots, as opposed to letting the viewer decide what they want to watch whenever they want to watch it.

In October of 2016, Scripps Networks participated in a $30 financing round, which was led by ProSiebenSat.1.  With this participation, this will allow Pluto TV to air a great amount of Scripps’ content, giving more exposure and potential revenue as a result.  Pluto TV is also available for free, so even people without cable can have access to Scripps’ content.  With this plus the AT&T deal involving DIRECTV NOW, it can definitely be shown that Scripps Networks is investing a lot of money into online streaming services, as they can see the market for internet-based content is growing every year.  If regular cable tv ends up being less popular and streaming services become the most used service to access television, Scripps will be ahead of the change and be able to retain and potentially gain a lot of revenue for the future.

Pluto TV Advertisement[16]

Sources

[1] Scripps Networks Interactive. “ History.” History | Scripps Networks Interactive, www.scrippsnetworksinteractive.com/our-company/history/.

[2] “SNI Income Statement – YahooFinance.” Yahoo! Finance, Yahoo!, finance.yahoo.com/quote/SNI/financials?p=SNI.

[3] Littleton, Cynthia. “HGTV, Advertising Gains Power Scripps Networks Interactive’s Q3 Earnings.” Variety, 7 Nov. 2016, variety.com/2016/tv/news/scripps-networks-interactive-q3-hgtv-travel-channel-1201911392/. [3] Littleton, Cynthia. “HGTV, Advertising Gains Power Scripps Networks Interactive’s Q3 Earnings.” Variety, 7 Nov. 2016, variety.com/2016/tv/news/scripps-networks-interactive-q3-hgtv-travel-channel-1201911392/.

[4] Sebastian. “How to Watch Netflix While Abroad .” TigerVPN Blog, 4 May 2016, blog.tigervpn.com/howtowatchnetflixwhileabroad/.

[5] Szalai, Georg. “Scripps Networks Won’t Renew Netflix Deal, CEO Says ‘We’Re Big Enough.’” The Hollywood Reporter, 7 Nov. 2016, www.hollywoodreporter.com/news/scripps-networks-wont-renew-netflix-deal-ceo-says-were-big-944709.

[6] Spangler, Todd. “Amazon Drops Discovery and Scripps Shows, with Scripps the Bigger Loser.” Variety, 26 Mar. 2014, variety.com/2014/digital/news/amazon-drops-discovery-and-scripps-shows-with-scripps-the-bigger-loser-1201147369/.

[7] Faulkner, Trisha. “Netflix Loses Scripps Networks Interactive Contract: Say Goodbye To HGTV, Food Network, Travel Channel, And More.” The Inquisitr News, 12 Nov. 2016, www.inquisitr.com/3709928/netflix-loses-scripps-networks-interactive-contract/.

[8] Spangler, Todd. “Netflix Losing Food Network, HGTV, Travel Channel Shows at End of 2016.” Variety, 9 Nov. 2016, variety.com/2016/digital/news/netflix-scripps-food-network-hgtv-travel-channel-shows-1201913874/.

[9] “AT&T.” Computer Sciences Corporation, CSC, www.csc.com/global_alliances/alliances/112505-at_t.

[10] “Scripps Networks Interactive, AT&T Sign Long-Term Multi-Platform Distribution Agreement.” Nasdaq GlobeNewswire , GlobeNewswire, 22 Sept. 2016, globenewswire.com/news-release/2016/09/22/873822/0/en/Scripps-Networks-Interactive-AT-T-Sign-Long-Term-Multi-Platform-Distribution-Agreement.html.

[11] Munson, Ben. “Top 9 Cable, Satellite and Telco Pay-TV Operators in Q1: Ranking Comcast to TWC to Charter to Cablevision.” FierceCable, 11 May 2016, www.fiercecable.com/special-report/top-9-cable-satellite-and-telco-pay-tv-operators-q1-ranking-comcast-to-twc-to.

[12] Rogowsky, Mark. “Is DirecTV Now The Video Service Cord Cutters Have Been Waiting For?” Forbes, Forbes Magazine, 29 Nov. 2016, www.forbes.com/sites/markrogowsky/2016/11/29/is-directv-now-the-video-service-cord-cutters-have-been-waiting-for/#7781ae8330ef.

[13] CNET. “DirecTV Now Offers 100 Channels of Live TV Starting at $35 a Month.” YouTube, YouTube, 28 Nov. 2016, www.youtube.com/watch?v=040r9p0oijk.

[14] “What Is Pluto Tv?” Pluto TV, Pluto TV, corporate.pluto.tv/.

[15] Pham, Alex. “Pluto TV Lands $30M Financing From Scripps Networks And ProSiebenSat.1.” Forbes, Forbes Magazine, 12 Oct. 2016, www.forbes.com/sites/alexpham/2016/10/12/pluto-tv-lands-30-million-financing-from-scripps-networks-and-prosiebensat-1/#16d668db4e3f.

[16] PlutoTV. “Pluto.TV: Watch What’s Possible.” YouTube, Pluto TV, 31 Mar. 2014, www.youtube.com/watch?v=atNBbc6ofiE.

Disney

Posted on by 
by JACK ROSE, AUDREY LEW, and BRITTANY ORTIZ
The Walt Disney Company

Disney Logo [1]

Background

Disney is a leading producer, owner, and distributor of media that owns, among many other things, broadcast network ABC; movie studios Pixar, Walt Disney Animation, Marvel, and Lucasfilm; Walt Disney Parks and Resorts that attracted nearly 150 million people in 2015 [2]; and cable sports network ESPN [3]. Between ABC, its affiliates, and ESPN, Disney operates more than 300 channels worldwide, while its movie studios own the rights to The Avengers family and Star Wars [4]. The last Star Wars release became the highest grossing domestic film earlier this year and with another releasing this December, the company’s film division remains strong [5]. However, fluctuating results on the television side have led Disney to invest in new technologies and a desire to expand international reach birthed a new theme park in China, which opened earlier this year.

Corporate Structure

Bob Iger

CEO Bob Iger [1]

Disney’s Chief Executive since 2005, Bob Iger helmed the acquisitions of Pixar, Marvel, and Lucasfilm. Since Iger’s promotion from Chief Operating Officer, Disney’s stock price has risen more than $70 while it’s TV division has come to account for half of the company’s profit [6]. Nearing the end of his career, Iger has repeatedly delayed his retirement and most recently set 2018 as the expiration date for his own tenure. His last task will be selecting his successor, after a recent candidate failed to last as heir.

Disney Organizational Chart

Disney’s Organizational Chart [7]

Beyond Iger, various chairmen run each of Disney’s major compartments and the company’s board of directors is comprised of 11 members. However, it is this organizational chart, distributed by Walt Disney Studios in 1943, that largely explains Disney’s management philosophy [7]. Rather than the typical hierarchy, the chart displays an interlocking web of managers, producers, and creators that are needed to produce a film. This organization is intended to encourage creativity and teamwork by emphasizing collaboration rather than chain of command. Each role supports, instead of merely instructing, another.

Financials

Annual revenue, profit, and net income have increased yearly since at least 2013, as has Disney’s valuation of its assets and balance sheet as whole. Disney’s revenue dwarfs that of most of its competitors in media, exceeded only by Sony and other conglomerates that produce and own as much content as Sony and Disney. Disney’s stock price is similarly higher than most competitors, currently hovering around $100 [8]. The company’s price per share seems to be inextricably linked to the success of ESPN, which is struggling with subscriber losses and adapting to the future (see “Investments in Technology” section below).

Disney Stock

Disney’s Stock Price for last two years [8]

Investments in Technology

mlbam_fb_logo

MLB Advanced Media Logo [11]

Disney’s future focus is in technology as it attempts to revitalize ESPN and stay on the cutting edge of content creation and media. Primarily, in August the company invested $1 billion for a 33% stake in Major League Baseball’s BAMTech, a leading television streaming company. The deal included an option for Disney to take a majority stake in the company down the road. The first collaboration between the two will be BAMTech’s creation of a standalone streaming service for ESPN, which Disney hopes will help ease the network’s subscriber losses and struggling ratings. BAMTech adds 7.5 million paid subscribers across a multitude of streaming platforms to Disney’s already massive user base [9]. The investment in BAMTech isn’t completely black and white, however. Television’s trend toward skinny bundles complicates the relationship between every content producer and cable provider, with Sling, DirecTV, Hulu, and more getting into the live over-the-top business. Disney’s BAMTech investment suggests a possibility that Disney itself could run a direct-to-consumer cable distributor itself [10].

Throughout this year, rumors swirled about the possibility of Disney purchasing Snapchat, Twitter, and/or Netflix, though analysts agree: none of these are likely. Twitter’s struggle to remain profitable and stabilize its stock price creates nonstop purchase rumors, but it seems that Disney doesn’t stand to benefit much from a Twitter acquisition [11]. Snapchat has proved to be a unique outlet for Disney’s content, but doesn’t seem to be a likely purchase for the social media company [12]. Though the investment in BAMTech signifies Disney’s interest in streaming, Netflix doesn’t appear to be a perfect partner, either. Netflix’s dominance in the streaming market has waned as challengers such as Amazon and Apple have stolen subscribers [13].

Box Office

Moana

Star Wars  Moana banner [17]

After the November 23 release of Moana, Disney is nearing $2.5B in total domestic box office gross for 2016 [14]. With the top four grossing films of 2016 thus far (Finding Dory, Captain America: Civil War, The Jungle Book, and Zootopia), the company topped $6B in worldwide box office gross for the first time in its history [15]. This new record will only increase as Moana and Doctor Strange continue to screen and Disney’s final 2016 film releases: the newest film, Rogue One. Beyond the box office, movies like Star Wars, Finding Dory, and Moana provide massive profits in merchandising, both in America and abroad. In 2013, Disney merchandise sales brought in over $40B.

Theme Parks

On June 16, Disney’s fourth international theme park opened in Shanghai, with the tagline “authentically Disney, distinctly Chinese” [16]. The company avoided western branding and symbols by changing street names within the park and by filling the concessions with 70% Chinese food. Traditional Disney characters can be seen wearing traditionally Chinese silk costumes and speaking the native language. The Shanghai Disney Resort seeks to take advantage of the massive potential offered by China and the wider Asian market.

Shanghai Disney

Shanghai Disney Resort [18]

Conclusion

Despite Disney’s losses in television, its massive successes at the box office in 2016 have made up for it. The control of Star Wars, Marvel, and Pixar promises success in the motion pictures department nearly every year. Further, Disney’s land holdings of theme parks underscore the company’s finances with physical propoerty–while most media conglomerates own intellectual property, Disney holds more tangible assets as well. The company’s investments in technology put it in a good place for the future–its theme parks’ MagicBands have already proven successful. But while the company must hope these investments pay off, it also faces the uncertain future of navigating an evolving marketplace with a new CEO. Iger’s selection of his successor is by far the most important storyline to follow within the massive world of Disney.

Sources

  1. About The Walt Disney Company. Retrieved November 25, 2016. https://thewaltdisneycompany.com/about/
  2. The Data Team. June 16, 2016. The Economist. A New Disney Theme Park Opens in China. Retrieved November 25, 2016. http://www.economist.com/blogs/graphicdetail/2016/06/daily-chart-11
  3. Johnson, Madeleine. June 16, 2016. Zacks. Your Complete Guide to All the Things Owned by Disney. Retrieved November 25, 2016. https://www.zacks.com/stock/news/220682/your-complete-guide-to-all-the-things-owned-by-disney
  4. Carpenter, J. William. October 29, 2015. Investopedia. Top 5 Companies Owned by Disney. Retrieved November 25, 2016. http://www.investopedia.com/articles/markets/102915/top-5-companies-owned-disney.asp
  5. Brevet, Brad. January 7, 2016. Box Office Mojo. ‘Star Wars: The Force Awakens’ Becomes Highest Grossing Domestic Release of All-Time. Retrieved November 25, 2016. http://www.boxofficemojo.com/news/?id=4142&p=.htm
  6. Belloni, Matthew. June 22, 2016. The Hollywood Reporter. In-Depth With Disney CEO Bob Iger on China Growth, ‘Star Wars’ Reshoots and Political Plans: “A Lot of People Have Urged Me to [Run]”. Retrieved November 25, 2016. http://www.hollywoodreporter.com/features/bob-iger-interview-star-wars-905320
  7. Hirasuna, Delphine. August 7, 2009. At Issue Journal. Walt Disney’s Creative Organization Chart. Retrieved November 25, 2016. http://www.atissuejournal.com/2009/08/07/walt-disney%E2%80%99s-creative-organization-chart/
  8. Yahoo! Finance. The Walt Disney Company (DIS). Retrieved November 25, 2016. https://finance.yahoo.com/quote/DIS/financials?p=DIS
  9. Brown, Maury. August 9, 2016. Forbes. Disney Buys $1B Stake In MLB’s BAMTech, To Launch ESPN Streaming Service. Retrieved November 25, 2016. http://www.forbes.com/sites/maurybrown/2016/08/09/disney-co-makes-1-billion-investment-becomes-minority-stakeholder-in-mlbams-bamtech/#1f44b1915972
  10. Markman, Jon. August 23, 2016. Forbes. Disney Streaming Into A Perilous Future. Retrieved November 25, 2016. http://www.forbes.com/sites/jonmarkman/2016/08/23/disney-streaming-into-a-perilous-future/#4f34784210f7
  11. Kafka, Peter. September 26, 2016. Recode. Why Disney won’t buy Twitter. Retrieved November 25, 2016. http://www.recode.net/2016/9/26/13062276/disney-won-t-buy-twitter
  12. Munarriz, Rick. April 9, 2016. The Motley Fool. Disney Isn’t Buying Netflix or Snapchat. Retrieved November 25, 2016. http://www.fool.com/investing/general/2016/04/09/disney-isnt-buying-netflix-or-snapchat.aspx
  13. Cohan, Peter. October 5, 2016. Forbes. Why Walt Disney Should Not Buy Netflix. Retrieved November 25, 2016. http://www.forbes.com/sites/petercohan/2016/10/05/why-walt-disney-should-not-buy-netflix/#710bdc20395d
  14. Box Office Mojo. Studio Market Share. Retrieved November 28, 2016. http://www.boxofficemojo.com/studio/?view2=yearly&view=parent&p=.htm
  15. Tartaglione, Nancy. November 6, 2016. Deadline Hollywood. Disney Crosses $6B At Global Box Office; First Time In Studio’s History. Retrieved November 28, 2016. http://deadline.com/2016/11/disney-crosses-six-billion-dollars-global-box-office-studio-record-doctor-strange-finding-dory-zootopia-captain-america-1201849749/
  16. Gardner, Hannah. June 16, 2016. USA Today. Disney’s new Shanghai park is supersized. Retrieved November 28, 2016. http://www.usatoday.com/story/news/world/2016/06/15/disneys-new-shanghai-park-supersized/85920926/
  17. Disney. Moana. Retrieved November 28, 2016. http://movies.disney.com/moana

AMC Networks

Posted on by 
by Griffin Morrow
AMC Networks and their cable family.

AMC Networks and their cable family. [31]

Profile

AMC Networks Inc., operating under the title of Rainbow Media Holdings for decades, is a former subsidiary of Cablevison that was spun off in the Summer of 2011 as a publicly traded company [1]. The New York based organization owns and operates cable channels AMC, IFC, WE tv, and SundanceTV and recently acquired a stake in BBC America [2]. AMC, the obvious bell-cow of the cable bundle, has birthed dramas such as Mad Men and Breaking Bad that helped catalyze the so called “golden age” in cable television from 2007 onwards. This stretch of critical acclaim has scored AMC 207 Emmy nominations along with 33 wins [3], including five of the last six Emmys for Outstanding Drama Series [4].

Key Executives

Joshua Sapan - President and Chief Executive Officer

Joshua Sapan – President and Chief Executive Officer (photos curtesy of AMC Networks [37])

Charles F. Dolan - Executive Chairman

Charles F. Dolan – Executive Chairman

Edward A. Carroll - Chief Operating Officer

Edward A. Carroll – Chief Operating Officer

Sean S. Sullivan - Executive Vice President and Chief Financial Officer

Sean S. Sullivan – Executive Vice President and Chief Financial Officer

Programming Reach

Ranking as the 14th most watched network among the coveted 18-49 demo [5], AMC reaches 97 million American households. AMC Networks, however, finds itself in a unfortunate predicament. Other cable entities WE tv, IFC, and Sundance have failed to match the margins AMC has managed. Among the 18-49 demographic, WE tv ranks 39th, IFC stumbles into 58th, and Sundance checks in at a disappointing 88th [6].

Economics

Three year economic landscape since going public.

Three year economic landscape since going public [33].

To the blind eye, AMC Networks would seemingly be reveling in their cult-like headlining dramas they’ve found in Madison Avenue and meth making high school chemistry teachers. Since going public on June 21st of 2011 AMC Networks shares are up nearly $29 in price, an increase of almost 82% over three years [7]. Affiliate fees augmented from a 2007 margin of 22 cents per customer per month to 33 cents in 2013 [8]. The recent 3Q report stated a stout 31% increase in net revenue from levels a year ago to $514.2 million [9]. So what’s not to like for AMC Networks? Ad revenues have slipped by 6% in this recent quarter with a 19% drop in audiences [10]. Operating income this quarter was $12 million short of last years. Shares hit a 52-week low on October 13th when prices fell to $52.75. Moreover, AMCX stock has tumbled by approximately 18% in the last year.

Life After Mad and Bad

Dramatic successes that once stoked the AMC flame have begun to fade. Viewers said goodbye to Breaking Bad last fall and will prepare to jettison Mad Men after it’s end next spring. Questions as to how the organization will survive such gigantic losses in programming have dominated industry conversations for some time. One common theme reigns supreme: if AMC plans on continuing on, they need something to replace their prior hits. And fast. The majority of the industry, AMC Networks investors in particular, are wondering if this is possible.

Zombies Devouring American Audiences 

Iconic Walking Dead season 1 poster art where protagonist Rick Grimes investigates a desolate Atlanta.

Protagonist Rick Grimes investigates a desolate Atlanta in the iconic season 1 poster. [32]

The most life in AMC Networks ironically resides within the cold clammy hands of the undead. A television adaption of Robert Kirkman’s zombie apocalypse graphic novel “The Walking Dead” has has wowed audiences suspenseful storytelling and heaps of zombie carnage. The Walking Dead premiered on Halloween night in 2010 with 5.35 million viewers, an AMC first [11]. The show has produced end over end increase since. The Walking Dead ended it’s 4th season with an average of 13.3 million viewers [12], a growth margin that prompted AMC to renew the show for a sixth season before the fifth season even aired [13].

A "Walker" enjoying a mid-afternoon snack.

A “Walker” enjoying a mid-afternoon snack. [34]

The infectious love for zombies has proved so strong that the first episode of season five shattered television viewing history. An audience of 17.3 million viewers for the season five premiere crowded The Walking Dead as the highest rated show in cable television history [14]. The October 12th premiere, with help from the 7% increase in viewership, managed to out muscle typical ratings power house Sunday Night Football [15]. Playing off of a dedicated following from the graphic novel has allowed the show to become the most popular program among the 18-49 demographic for two consecutive years [16].

Lightning Doesn’t Strike Twice…

All in all, AMC networks has whiffed when it comes to finding their next trademark show. Recently premiering series that AMC networks hoped would share the same prestigious stage as their predecessors have fallen significantly short. Rubicon, a conspiracy thriller set against the New York skyline, proved anything but thrilling for viewers and was cancelled three months after debuting due to subpar ratings [17].

The Walking Dead stifles the average viewership of the other AMC programming.

The Walking Dead stifles the average viewership of the other AMC programming. [35]

The Detroit based crime drama Low Winter Sun adapted from a two-part British mini-series of the same name lasted only ten episodes [18]. Even the more constant series such as Hell on Wheels, Halt and Catch Fire, and TURN have underperformed expectations.

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…or Does It?

While millions may have mourned the passing of anti-hero Walter White reign on television, they will not have to wait long to satisfy their Breaking Bad junkie addictions. Former show runner Vince Gilligan and AMC have partnered to produce a prequel to the former Emmy winning series [19]. Better Call Saul, airing this upcoming February, will star Bob Odenkirk and be set six years prior to the events of Breaking Bad. AMC has already renewed the spin off for a 13 episode second season despite a delayed production process [20]. AMC also green lit preliminary production on a companion series for current hit The Walking Dead earlier this year [21]. The show will be standalone from the current series, displaying a new set of characters in an entirely different region of the post-apocolyptic zombie world. Both spin offs are obvious attempts by AMC Networks to brandish new programming through past and present successes.

DirecTV and AMC Clash on Contract

AMC Networks warning message to DirecTV viewers about potential stoppages in content.

AMC Networks warning message earlier this month on website to DirecTV viewers about potential stoppages in content. [36]

DirecTV viewers may been in danger of losing AMC Networks‘ programming after this holiday season. AMC Networks went public with a contract dispute with the satellite provider during a November 2 episode of The Walking Dead [22]. They warned viewers that they were at risk of missing future content stating that DirecTV had not “engaged in meaning negotiations”. AMC Networks has gained a reputation of quarreling with service providers by often publicizing carrier contract disputes and using their viewer as meaningful leverage. Disputes have included Verizon FiOS [23], Suddenlink Communications [24], Rogers Communications [25], and AT&T U-Verse [26] over the past two years. The worst of the carrier disputes came when DISH dropped AMC Networks from their service for nearly four months [27]. The conflict, like the others, stemmed from AMC Networks aggressive price evaluation set in an attempt to profit from newfound success in dramatic programming.

International Distribution Taking Center Stage

AMC Networks rolled out programming in various international markets starting in November, an organizational first for a company that once prided itself on broadcasting classic American movies. AMC International started distribution in Europe with broadcasts in Spain on November 5th [28]. Broadcasts of the new international distribution arm furthered in Latin America a week later [29]. The company plans to continue it’s stretch across the globe with further rollouts. These recent investments into foreign markets can be linked to AMC Netoworks‘ $1.04 billion purchase of Liberty Global’s content division Chellomedia last year [30]. The array of TV networks will be distributed across an estimated 138 countries worldwide with access to more than 390 million foreign households.

Source:

[1] AMC Networks Becomes a Public and Separate Company AMC Networks RT: 11/24/14

[2] AMC close to $200 deal for stake in BBC America New York Times RT: 11/24/14

[3] Budget Squeezing, Producer “Bake-Offs” and Post-‘Breaking Bad’ Challenges The Hollywood Reporter RT: 11/24/14

[4] Emmy Nominee/Winner Database Television Academy RT: 11/24/14

[5] ‘The Walking Dead’ Is A Huge Hit. So Why Is AMC’s Stock Trading So Low? Forbes RT: 11/24/14

[6] ‘Dead’ Breathes Life into AMC Networks Adweek RT: 11/24/14

[7] Financials: AMC Networks Inc (AMCX.OQ) Reuters RT: 12/1/14

[8] AMC is Thriving by Breaking the Rules of Legacy TV The Atlantic RT: 11/24/14

[9] AMC Networks tops 3Q net income and revenue expectations Associated Press RT: 11/24/14

[10] Media Companies miss ad dollars after signing streaming deals NYPost RT: 11/24/14

[11] ‘The Walking Dead’ Snags AMC Highest Premiere Ratings of 2010 Time RT: 11/24/14

[12] The Walking Dead Season 4 Finale Breaks Finale Record With 15.7 Million Viewers AMC blog RT: 11/24/14

[13] ‘The Walking Dead’ Renewed for Season 6 Variety RT: 11/24/14

[14] Walking Dead breaking US cable TV record BBC News RT: 11/24/14

[15] ‘The Walking Dead’ Season 5 Premiere Hits Series High Ratings, Delivering 11 Million Adults 18.49 & 17.3 Million Viewers TVbytheNumbers RT: 11/24/14

[16] ‘Walking Dead’ Renewed For Season 6 By AMC Deadline Hollywood RT: 11/24/14

[17] ‘Rubicon’ is Cancelled by AMC Entertainment Weekly RT: 12/1/14

[18] ‘Low Winter Sun’ Cancelled by AMC Variety RT: 11/24/14

[19] ‘Better Call Saul,’ a prequel spinoff series from ‘Breaking Bad,’ greenlit by AMC NY Daily News RT: 11/24/14

[20] ‘Better Call Saul’ Renewed for Second Season, Delayed Until 2015 Rollingstone RT: 11/24/14

[21] ‘The Walking Dead’ companion series gets pilot greenlight Entertainment Weekly RT: 11/24/14

[22] AMC Uses ‘Walking Dead’ Fans as Weapon in DirecTV Talks Bloomberg RT: 11/24/14

[23] AMC Networks Warns Verizon FiOS Customers That Channels Could Go Dark Deadline Hollywood RT: 11/24/14

[24] AMC Networks, Suddenlink in License Fee Dispute Broadcasting and Cable RT: 11/24/14

[25] Rogers and AMC Networks End Carriage Dispute With Multi-Year Canadian Deal The Hollywood Reporter RT: 11/24/14

[26] AT&T Statement on AMC Networks Programming Agreement AT&T press release RT: 11/24/14

[27] Dish Network Says It Will Drop AMC Networks Due To Price, Not VOOM Deadline Hollywood RT: 11/24/14

[28] AMC TV channel launches in Spain telecompaper RT: 11/24/14

[29]  AMC Networks International Announces Major Expansion of Sundance Channel Global in Latin America With First-Ever Launches in Six Territories AMC International press release RT: 11/24/14

[30] AMC to Buy Liberty Global’s Chellomedia for $1.04 Billion Bloomberg RT: 11/24/14

[31] AMC Networks logo AMC Networks Website RT: 12/1/14

[32] Walking Dead season 1 poster IMDb image search RT: 12/1/14

[33] AMCX stock three year chart GoogleFinance RT: 12/1/14

[34] Zombie eating an arm Walking Dead fan page RT: 12/1/14

[35] AMC programming averages TV by the Numbers RT: 12/1/14

[36] AMC Networks warning page AMC Networks website RT: 12/1/14

[37] Executive Officers AMC Networks Websites RT: 12/1/14

DirecTV

Posted on by 
by Marla Nixon
direct logo good

DIRECTV logo, Photo courtesy of: [1] www.slashgear.com

CONTACT INFORMATION [2]

2260 E Imperial Hwy

El Segundo, CA 90245 United States

(310) 964-5000

www.directv.com [3]

COMPANY OVERVIEW

DIRECTV was founded in 1990 and is currently one of the world’s largest digital television services. The company provides services to over 32 million customers in the United States and Latin America (20 million in the United States and 18 million in Latin America). These services include HD, 3D and Video-On-Demand programming. DIRECTV is known for their #1 ranking in customer service as well as their sports programming which includes the NFL Sunday Ticket (see below “Deals and Acquisitions” for more details) [4].

 ELECTED OFFICERS [5]

Chairman, President & CEO

Michael White,  Chairman, President & CEO, Photo courtesy of: [5] www.directv.com

Chairman, President & CEO: Michael White

Chief Human Resources Officer: Joseph Bosch

President, DIRECTV Latin America: Bruce Churchill

Chief Financial Officer: Patrick Doyle

General Counsel: Larry Hunter

Chief Technology Officer: Romulo Pontual

Chief Accounting Officer: Steve Adams

FINANCIAL SNAPSHOT

DIRECTV announced their 2014 3rd Quarter results on November 6th, 2014 [6]. The results showed a revenue growth of 6%, making their total revenue $8.4 billion. This revenue growth was due to an increase in U.S. ARPU (Average Revenue Per User) and DIRECTV Latin America (DTVLA) subscriber growth. However, this increase in revenue was offset by a lower ARPU at DTVLA. The lower ARPU at DTVLA was due to unfavorable changes in exchange rates.

6 month stocks

DIRECTV stock quotes from June 2014 to present (6 months), Photo courtesy of: [7] www.money.cnn.com

Their current stock price (as of December 1st, 2014) is at $87.37 per share. This price has a year-to-date increase of 26.51% and a three-year increase of 89.69% [7]. Although financials have shown an increase it is important to note that DIRECTV has sustained subscriber loss in both the United States and Latin America units. This subscriber loss has been attributed to their credit policies and a rise in competition [6] [8].

MAIN COMPETITORS

DIRECTV has three main competitors: Comcast, Dish Network and Time Warner Cable [9]. Comcast is their biggest competitor ranking number one in the pay-TV market with 22.5 million video subscribers (DIRECTV holds about 20 million video subscribers) [10]. There is currently a proposed merger between Comcast and Time Warner Cable (see Tuned In [15] and The Eyes Have It [16] graphics under “Deals and Acquisitions). This merger is still under consideration by the FCC, but if approved will put Comcast even further in the lead of the pay-TV market [11].

DEALS AND ACQUISITIONS 

On September 1st, 2014, a negotiation dispute between Raycom Media and DIRECTV caused a 7-day standoff that resulted in a blackout for some DIRECTV subscribers. 43 Raycom stations, including channels with NFL programming, went dark on DIRECTV. The dispute was resolved before the Sunday NFL game and all channels were restored [12].

Wall Street Journal

Displays percentage of the market Comcast and DIRECTV will have if both mergers are approved, Photo courtesy of:[15] www.wsj.com

In May of 2014 AT&T announced that it planned on acquiring DIRECTV with a $48.5 billion merger. If combined, DIRECTV and AT&T will have more than 26 million subscribers in the United States. This would put DIRECTV ahead of Comcast (22.5 million subscribers as of Fall 2014) in the market for pay-TV. However, if the Comcast and Time Warner Cable merger occurs, DIRECTV would still remain second-largest. Looking at the graphic “The Eyes Have It [16],” if the DIRECTV and AT&T merger is made they will have a total of 25.8 million subscribers, unfortunately that number will remain dwarfed by Comcast if the Comcast-Time Warner Cable merger occurs bringing them up to 33.1 million subscribers (note that The Eyes Have It graphic only shows data up to 2013, data not referencing The Eyes Have It are current). However, both mergers have yet to be approved by the Federal Communications Commission (FCC) [13]. Both mergers have been under heavy consideration by the FCC because of the massive amount of subscribers each merger affects. If either or both merger are approved the pay-TV market competition will rise dramatically. On September 25th, 2014, DIRECTV stockholders approved the merger with AT&T in a vote that represented 77% of all outstanding shares. The voting results showed that more than 99% of votes casted were in favor of the merger agreement [14].

DIRECTV vs Comcast Graph

Current subscribers to DIRECTV, AT&T, Comcast and Time Warner Cable, Photo courtesy of: [16] www.wsj.com

To learn more about the AT&T and DIRECTV merger watch a news broadcast here. Video courtesy of: [17] www.wsj.com.  

On October 1st, 2014, DIRECTV renewed it’s deal with the National Football League (NFL) for the NFL Sunday Ticket. The NFL Sunday Ticket includes the showing of all out-of market games (regular season games outside of their local markets) as well as real time stats [18]. The NFL Sunday Ticket has been given exclusive rights to DIRECTV and is being extended for 8 years. The price was confirmed at $1.5 billion per season which is a 50% price increase compared to what DIRECTV paid in previous years. DIRECTV produces revenues of about $600 million from the NFL Sunday Ticket with around 2 million subscribers. This revenue is far below what they are now paying for the rights of the NFL Sunday Ticket programming [19]. A possible reason for DIRECTV’S agreeing to a dramatically increased price is their proposed merger with AT&T (see above paragraph). If DIRECTV did not renew it’s deal with the NFL for the Sunday Ticket, AT&T was allowed to walk away from the deal without any penalties [19] [20].

In early November, AMC Networks threatened to go dark on DIRECTV if negotiation standards are not met. With their hit show The Walking Dead halfway through its season a blackout would be dangerous for DIRECTV business. The contract is set to expire in 2015 and there have been warnings aired on the show that DIRECTV subscribers may not continue to receive programming from AMC [21]. However, DIRECTV has stated that subscribers will be able to view every episode of the upcoming season of The Walking Dead in a public promise on their website [22].

DIRECTV and Guest-tek announced a strategic relationship on November 13th. This relationship expands technology and programming for hotels and guests [23].

LOOKING FORWARD

DIRECTV is now offering 4K Television. 4K television, also known as Ultra HD, is the latest HD technology and is called 4K because of the image width (4,000 pixels) [24]. DIRECTV is the first and only multi-channel video provider to offer 4K/Ultra HD TV. To receive DIRECTV 4K programming, subscribers need the DIRECTV Genie HD DVR and a DIRECTV 4K ready television. Currently the only DIRECTV 4K ready TV’s are the 2014 Samsung Ultra HD/4K television models [25]. The DIRECTV 4K programming was released on November 14th and currently has about 20 movie titles to choose from [26].

kingdomren

Photo courtesy of: [27] www.seriable.com

DIRECTV has also been creating some of their own content programming since 2013. Most recently, a new drama called “Kingdom” starring Jonathan Tucker and Nick Jonas has had a 20-episode renewal a week after its premiere. The show is about a mixed Martial Arts group living in Venice, CA. “Kingdom” has been their most-watched series on their Audience Network [28]. The DIRECTV Audience Network is devoted to their original programming [29].

Watch the Kingdom series trailer here. Video courtesy of: [30] www.youtube.com.

SOURCES

 1. DIRECTV’s Logo, www.slashgear.com, RT: 11/29/2014

2. Contact Information, www.hoovers.com, RT: 11/29/2014

3. DIRECTTV’s Website, www.directv.com, RT: 11/29/2014

4. “Our Company”, www.directv.com, RT: 11/30/2014

5. Elected Officers, investor.directv.com, RT: 11/28/2014

6. 2014 3rd Quarter Results, investor.directv.com, RT: 11/30/2014

7. DIRECTV Stock Quotes, www.money.cnn.com, RT:11/30/2014

8. “Tighter Credit, Competition Pressure DirecTV,” www.multichannel.com, RT: 11/30/2014

9. Competitors, www.hoovers.com, RT: 11/30/2014

10. Comcast Vs. DIRECTV, www.fool.com/investing, RT: 11/30/2014

11. Comcast and TimeWarner Merger, www.wsj.com, RT: 11/30/2014

12. “DirecTV, Raycom Media Blackout Ends Just in Time for NFL Games,” www.variety.com RT: 11/30/2014

13. “What Investors Need to Know About the AT&T-DirecTV Merger,” www.fool.com/investing, RT: 11/30/2014

14. DIRECTV Stockholders Approve Merger with AT&T, www.investor.directv.com, RT: 11/30/2014

15. “Comcast, TWC Blast Critics of Merger,” www.wsj.com, RT: 11/30/2014

16. “AT&T Has Approached DIRECTV About Possible Acquisition,” www.wsj.com, RT: 12/1/2014

17. Wall Street Journal Video, www.wsj.com, RT:12/1/2014

18. DIRECTV NFL Sunday Ticket, www.directv.com, RT: 11/30/2014

19. “DIRECTV Extends Its Deal With NFL For $12 Billion,” www.trefis.com, RT:11/30/2014

20. “CMO Today: NFL Sticks with DIRECTV for Sunday Ticket,” www.wsj.com, RT: 11/30/2014

21. “AMC Holds The Walking Dead Ransom In Dispute With DIRECTV,” www.digitaltrends.com, RT: 12/1/2014

22. DIRECTV Promise, www.directvpromise.com, RT:12/1/2014

23. DIRECTV and Guest-tek Strategic Relationship, www.guestek.com, RT: 12/1/2014

24. “4K TV and Ultra HD: Everything you need to know,” www.techradar.com, RT: 12/1/2014

25. “What is a DIRECTV 4K Ready TV and how does it work?” www.support.directv.com, RT: 12/1/2014

26. DIRECTV 4K TV Press Release, www.investor.directv.com, RT: 12/1/2014

27. Kingdom Photo, www.seriable.com, RT: 12/1/2014

28. “DIRECTV Orders 20 More Episodes of Original Drama ‘Kingdom,'” www.variety.com, RT: 12/1/2014

29. DIRECTV Audience Network, www.directv.com, RT: 12/1/2014

30. Kingdom Trailer, www.youtube.com, RT: 12/1/2014

DirectTV

Posted on by 
by Nick Sabatino
Photo courtesy of www.interpretllc.com

Photo courtesy of www.interpretllc.com [1]

Contact Information

Headquarters: 2230 E. Imperial Hwy, El Segundo, CA 90245                                    Phone: (310) 964-5000 [2]                                                                                                    Facebook: DirecTV                                                                                                    Twitter: @DirecTV

Executives

President and CEO: Michael White                                                                          Executive Vice President and Chief Financial Officer: Patrick T. Doyle                     Executive Vice President and President, DirecTV Latin America: Bruce B. Churchill [3]

President and CEO, Michael White Photo courtesy of investor.directv.com

President and CEO, Michael White
Photo courtesy of investor.directv.com [4]

About

DirecTV was founded in 1990 and was one of the country’s first satellite-cable providers. DirecTV offers quality television with a variety of channels, including many high definition (HD) channels. There are hundreds of channels on DirecTV and the number of channels a customer receives depends on the package that the customer buys. However, not only does DirecTV provide cable, they also provide On-Demand services, HD DVR products(recording devices) called Genie [5], and “TV Everywhere” applications so that you can enjoy your television shows or movies when you want, where you want, and on what device you choose.

DirecTV's Genie: HD DVR Photo courtesy of www.directv.com

DirecTV’s Genie: HD DVR
Photo courtesy of www.directv.com [6]

DirecTV is a satellite-cable provider, this means that instead of just having a cable box attached to your television inside of your home, DirecTV puts a satellite dish on top of your home. Appearance is mostly the only major difference. However, DirecTV has benefits over other cable providers. DirecTV is rated #1 in overall customer satisfaction, and has been ahead of cable for the past 14 years [7].

Financials

DirecTV offers its services in the United States and in Latin America. The company currently has over 37 million subscribers in these areas, and their revenues totaled about $30 billion dollars in 2013 [8]. DirecTV is a multi-billion dollar company traded publicly on the NASDAQ with the ticker symbol DTV. Their stock currently has a volume of 899,268 and it is being traded at $87.71 per share [9]. Over the past four years DirecTV has seen a substantial increase in subscribers. With that, came an increase in their stock value. Since 2010, DirecTV’s stock has rose about 60 points and it keeps steadily going up over time. These numbers are very good for DirecTV and proves that they are becoming more successful as a company and more people are choosing their product over others.

DirecTV stock over the last four years Photo courtesy of investor.directv.com

DirecTV’s stock price over the last four years
Photo courtesy of investor.directv.com [10]

AT&T Merger

In May of 2014, DirecTV proposed a deal to AT&T to join companies and create a merger. With this merger, AT&T could improve the services that DirecTV already has. AT&T would focus on improving the Internet quality in many areas of the country that DirecTV does business [11]. With improved Internet, customers would be able to get better access to On-Demand and Pay-Per-View options that DirecTV offers. It would also better allow for the DirecTV app to be on products such as iPads and iPhones that are contracted under AT&T service, so that DirecTV can be at your fingertips wherever, and whenever you want it to be. This is the concept of “TV Everywhere.”

Over the past few months, the merger has been overseen by the Federal Communications Commission (FCC) and the Justice Department over the legality of this merger. On November 20, 2014, DirecTV’s CEO, Michael White, said the deal should be approved next year. With this approved merger it is uncertain if DirecTV’s sales will go up. In a perfect market, the merger would cause an increase in the stock price of both AT&T and DirecTV. However, if one of the two company’s stock price starts to fall, being that both companies are in a merger, investors will sell their stock from the attached company and then both companies will have a decrease in stock price. This results in a loss of money for both AT&T and DirecTV [12].

AT&T and DirecTV Merger Photo courtesy of www.accessnorthga.com

AT&T and DirecTV Merger
Photo courtesy of www.accessnorthga.com [13]

International Expansion

In 2006, DirecTV gained 100% ownership of DirecTV Latin America [14]. With the expansion into new countries, DirecTV has asserted itself as more of a global brand. As of 2013, the number of subscribers that are from Latin America is about 18 million, which is an increase of about 9 million subscribers compared to the year 2010 [15]. With the success of expansion into Latin America, it is probable that DirecTV will expand into other markets as well and become even larger of a company. In the end of the day, it is all about getting your product to as many people as possible and making as much money as possible.

The DirecTV satellite dish portrayed as being on top of the Latin American countries where DirecTV is in. Photo courtesy of www.gigaom.com

DirecTV has expanded to Latin America.
Photo courtesy of www.gigaom.com [16]

Raycom Media

Back in September of 2014 there was a dispute between DirecTV and a broadcasting company called Raycom Media [17]. The dispute was over the broadcasting of Raycom Media’s channels through the means of DirecTV. The two companies did not come to a financial agreement by September 1st (the deadline) so for customers that had DirecTV they were unable to watch any Raycom Media channels for several days. Raycom Media is in 37 markets and 18 states, and they provide many different forms of television [18]. A major concern among people who had DirecTV and were in a Raycom Media market was the fact that they would not be able to watch some of the opening day NFL games on September 7th. Raycom and DirecTV made sure that this did not happen because of the potential financial loss that could have come from it. Agreements were made, and on September 7th customers were reinstated with their television channels.

Original Programming and What to Expect in the Future

Over the past few years DirecTV has entered into the world that Netflix and Hulu are also in. It’s the world of original programming, and it is the key to gaining more viewership, and in the case of DirecTV, more subscribers [19]. DirecTV’s goal is to have shows that viewers cannot get anywhere else. If this happens, then people may substitute the cable provider that they already have for DirecTV. DirecTV has their own channel called “Audience” that is only on DirecTV. On this channel is their newest show called Kingdom, and it came out in Fall of 2014. It stars Nick Jonas as a mixed martial arts fighter [20]. There is also a crime drama starring Thandie Newton called Rogue.

Click photo for Kingdom trailer courtesy of Youtube. Photo courtesy of www.directv.com

Click photo for Kingdom trailer, courtesy of www.youtube.com
Photo courtesy of www.directv.com [21]

There is even a special channel called “DogTV,” which is a channel specifically made for your dog to watch.

DogTV Trailer Photo courtesy of www.directv.com Commercial courtesy of www.youtube.com

Click photo for DogTV Commercial
Photo courtesy of www.directv.com
Commercial courtesy of www.youtube.com [22]

DirecTV also prides itself on its sports channels and packages. They have many packages, but their most popular one is the NFL Sunday Ticket. Every Fall if you are a customer that has NFL Sunday Ticket you can watch every NFL game that airs every Sunday [23]. New this Fall too is the introduction of NFL Fantasy Zone, a show which is all geared towards Fantasy Football. Expect growth in this department over the next few years.

There is also an ongoing dispute currently taking place between DirecTV and AMC. AMC is threatening to take away all of their channels (AMC, We TV, IFC, and Sundance) because they are claiming that DirecTV violated the existing deal that they had with them [24]. AMC is running campaigns during its show The Walking Dead, and DirecTV has an online petition[25]. DirecTV says that AMC is issuing a false alarm and nothing will happen. This is a developing story that needs to be kept a close eye on in the coming months.

In the near future, expect DirecTV to come up with more original content, renewal of their successful shows, expansion into new countries, and new and better deals to lure new customers to their services.

Sources

[1] DirecTV Logo. Interpret. RT: 4/30/14

[2] DirecTV Headquarters. eCorporateOffices.com. RT: 4/30/14

[3] Corporate Governance: Elected Officers. Investor.directv.com. RT: 4/30/14

[4] Michael White. Investor.directv.com. RT: 4/30/14

[5] DirecTV Genie. DirecTV.com. RT: 4/30/14

[6] DirecTV Genie. DirecTV.com. RT: 4/30/14

[7] DirecTV vs. Cable. DirecTV.com. RT: 4/30/14

[8] DirecTV 2013 Annual Report. Investor.directv.com. RT: 4/30/14

[9] Stock Quote and Chart. Investor.directv.com. RT: 4/30/14

[10] Stock Quote and Chart. Investor.directv.com. RT: 4/30/14

[11] “DirecTV CEO Expects Feds to OK AT&T Merger”. BostonHerald.com. RT: 4/30/14

[12] “3 Reasons DirecTV’s Stock Could Fall”. Fool.com. RT: 4/30/14

[13] “AT&T Agrees to Buy DirecTV in $45.8B Deal”. AccessNorthGa.com. RT: 4/30/14

[14] Company Profile. DirecTV.com. RT: 4/30/14

[15] DirecTV 2013 Annual Report. Investor.directv.com. RT: 4/30/14

[16] “DirecTV Adds Another 600,000 Latin American Users in Q1”. Gigaom.com. RT: 4/30/14

[17] “Raycom Media Restores 43 Local Stations to DirecTV Homes”. News.directv.com. RT: 4/30/14

[18] “Raycom Media Reaches Agreement In Principle With DirecTV”. RaycomMedia.com. RT: 4/30/14

[19] “DirecTV tries to join Netflix, Hulu With New Original Series Kingdom: Can They Compete?”. SheKnows.com. RT: 4/30/14

[20] “Stepping Into the Cage with Kingdom‘s Jonathan Tucker”. News.directv.com. RT: 4/30/14

[21] Kingdom Poster. DirecTV.com. RT: 4/30/14

[22] “DogTV Commercial – Been There Done That – Part 2”. Youtube.com. RT: 4/30/14

[23] “How DirecTV is Capitalizing On Growth of Fantasy Football”. Forbes.com. RT: 4/30/14

[24] “AMC Sounds Alarm About DirecTV Tussle During ‘Walking Dead’ Episode”. Variety.com. RT: 4/30/14

[25] “Don’t Let AMC Scare You!”. directvpromise.com. RT: 4/30/14

 

Discovery Communications

Posted on by 
By Parker Davis
Discovery_Communications_Logo

Discovery Communications Logo- image courtesy of givingtuesday.org

Overview [1] [2]

TLC Logo- image courtesy of businessinsider.com

John Hendricks originally founded Discovery Communications under the name Appalachian Community Service Network in 1982. The first station launched was The Learning Channel, an educational station for youths and adults alike. When the company changed its name to Discovery Communications in 1985, other education based channels were established such as the Discovery Channel and the first 24/7 HD basic cable channel, Discovery HD, currently known as Velocity [1]. Today, Discovery Communications is the world’s #1 subscription based television network, reaching over 2 billion subscribers in 220 countries. They own over 200 television stations including: the Science Channel, Animal Planet, and OWN. Outside of television, Discovery Communications is also a large publisher of educational books and operates online media channels such as Revision3 and howstuffworks.com [2].

Executives [3]

John S. Hendricks- image courtesy of corporate.discovery.com

 

 

John S. Hendricks: Founder and Chairman Discovery Communications

 

 

David M. Zaslav- image courtesy of corporate.discovery.com

 

 

David M. Zaslav: President and CEO Discovery Communications

 

 

Jean Briac Perette- image courtesy of corporate.discovery.com

 

 

Jean Briac (JB) Perette: President Discovery Networks International

 

 

 

 

Financials [4] [5] [6] [7] [8]

Discovery Communications is publicly traded under three stock series: DISCA, DISCB, and DISCK. Each ticker symbol translates to series A, B, and C stock. The newer issuances indicate a new corporate milestone, thus returning a higher company valuation number, resulting in a higher IPO for the new distribution of shares. DISCA contains the most shareholders. Within the previous three months, DISCA prices ranged from $76.80 to $85.97. Currently, it is recovering from its lowest point in the period, occurring April 15, 2014, and slowly increased 1.7% to $77.83 on April 18 [4].

Comparison of DISCA, DISCB, DISCK over a three month period- courtesy bloomberg.com

Comparison of DISCA, DISCB, DISCK- image courtesy of bloomberg.com

In the Annual Financial Statement for 2013, total revenue equated to $5.54 billion. A 19% increase over 2012, which generated $4.49 billion, a mere 8% increase over 2011 [5]. This growth is credited in their recent “acquisition of the majority stake in Eurosport International will drive international to contributing more than 50 percent of total company revenue” [6]. Discovery Communications possesses only 1% of total market share, competing alongside other media conglomerates such as: A&E, NBCUniversal, and Viacom [7] [8].

Retirement and the Curiosity Project [9] [10] [11] [12] [13] [14]

John S. Hendricks- image courtesy of curiosityretreats.com

Discovery founder and chairman, John Hendricks, officially announced his retirement in March. He will formally resign during the annual shareholder’s meeting on May 16; however, he has not released who will take his place as chairman. Although, sources speculate that current CEO, David Zaslav, may be a potential candidate for the position [9]. In his retirement letter to the board of directors, Hendricks explained that he will “spend the next few years traveling the planet and discovering the questions and mysteries that intrigue us all.” He will also use the opportunity to expand his new business, Curiosity Project LLC, announced February 10 of this year [10].

The mission of Curiosity Retreats is to create a unique forum where the lifelong curious can gather to explore in-depth the great questions of today. [11]

Curiosity Video Overview (Vimeo)

One currently operational aspect of the project is retreats for inspirational and open- minded thinkers alike. The retreats are five nights long at the Gateway Canyons resort in Colorado, including a panel of 8 different experts in the field of: science, technology, civilization, and human spirit [12]. The purpose of the retreat is to enlighten already intellectual minds and expand their imagination by collaborating and with others.

Gateway Canyons- image courtesy of multivu.com

The new aspect of Hendricks’ venture is video on demand. His plan is to compile recordings of the experts from the retreats and publish their talks online for an annual fee of $19.99. However, this venture may prove impractical because there are already free services similar to his found in university publications and intellectual websites, such as TED [13].

Hendricks founded Discovery in 1982 and stepped down as CEO in 2004 and began his role as chairman on the board of directors. He was with the company for 32 years [14].

Eurosport [15] [16] [17]

Eurosport Logo- image courtesy of 3.bp.blogspot.com

Discovery Communications is expanding its international affiliations by moving into the televised sports market. On January 21, Discovery purchased controlling share (51%) in Eurosport for $1.2 billion [15]. Since April 2013, Discovery owned 20% stake in the station. The extension was made in a monetary agreement with TF1, a French television network and previous majority owner of Eurosport. The purpose of Discovery’s equity increase is to compete with British Sky Broadcasting and BT, a UK cable provider, for exclusive Premier League television rights [16]. Discovery chose to expand its control over sporting networks so it can combine its international sports rights with its US based stations to avoid competing head on with domestic sporting networks. The new international acquisitions expand Discovery’s network portfolio, thus inflating revenue and control over the total media market [17].

DogTV [18] [19] [20]

DogTV Logo- image courtesy of dogtv.com

Discovery Communications has recently purchased an unspecified percentage of DogTV: a 2 year old network that targets the dog owner demographic and airs content specifically for pet entertainment. The station is distributed through DirecTV and has a subscription fee of $5 for television viewing and $10 for online streaming [17]. Current programming on the network includes 3-6 minute clips focused on a dog’s relaxation, stimulation, and exposure. Discovery Communications has developed a strategic partnership with DogTV, jointly creating similar programming for Animal Planet while spreading the reach of the network to other countries. This tactic by Discovery can be seen as a gamble to invest in television for dogs, however, over 43.3 million US households own at least one dog, collectively spending over $55.8 billion annually on pet products, and over half of which claim their dogs show interest in what occurs on television [18]. The channel is designed to relieve the stress and anxiety of stay at home pets [19].

DogTV in The News (YouTube)

New Form [21] [22] [23]

Left to Right: Ron Howard, Brian Grazer, David Zaslav- image courtesy variety.com

Discovery has co-founded and launched a new digital media site, New Form, alongside producers Ron Howard and Brian Grazer [21]. The purpose of the studio is to infiltrate the scripted media market, whereas Discovery contains mainly non-fiction and reality based content. In the startup, the firm appointed Kathleen Grace, former Head of Creative Development for YouTube Space LA, as the Chief Creative Officer for New Form [22]. The videos created will be used in conjunction with current Discovery Digital Networks rather than creating a new site from the ground up. The venture was also announced the same week as Discovery’s upfront presentations to entice advertisers about the concept. Today, media advertisers divide their capital between television and online mediums, serving as a potentially dramatic advertisement revenue increase for Discovery.  Zaslav is making the push for Discovery to move into the Internet realm to make their channels easily accessible on all platforms for anyone to use [23].

Interview with David Zaslav and Ron Howard on New Form (Bloomberg)

Works Cited:

[1] Discovery Communications Founder John Hendricks to Retire as Chairman of Company’s Board. Discovery Communications. March 20, 2014. RT: April 13, 2014.

[2] Overview & Mission. Discovery Communications. RT: April 13, 2014.

[3] Leadership. Discovery Communications. RT: April 13, 2014.

[4] Google Finance Data. Google. RT: April 15, 2014.

[5] 2013 Annual Report. Discovery Communications. RT: April 15, 2014.

[6] Discovery CEO touts International Growth, Outlook. The Hollywood Reporter. Georg Szalai. April 3, 2014. RT: April 15, 2014.

[7] Introduction to the Entertainment & Media Industry. Plunkett Research, Ltd. RT: April 15, 2014. Used to calculate total market share.

[8] Top Competitors for Discovery Communications, Inc.. Hoovers. RT: April 15, 2014

[9] Discovery Communications Chairman John Hendricks stepping down. Los Angeles Times. Joe Flint. March, 20 2014. RT: April 17, 2014.

[10] John Hendricks Retirement Letter. John S. Hendricks. March 20, 2014. RT: April 17, 2014.

[11] Curiosity Mission Statement. Curiosity Retreats. RT: April 17, 2014.

[12] Curiosity About Page. Curiosity Retreats. RT: April 17, 2014.

[13] Discovery chairman John Hendricks to step down to pursue lifelong learning academy. Washington Post. Dan Beyers. March 23, 2014. RT: April 17, 2014.

[14] Cable Pioneer John Hendricks to Retire From Discovery Communications. Variety. Cynthia Littleton. March 20, 2014. RT: April 17, 2014.

[15] Discovery Takes Controlling Stake in Eurosport. New York Times. David Gelles. January 21, 2014. RT: April 17, 2014.

[16] Eurosport owner Discovery considering Premier League TV rights bid. The Guardian. Mark Sweney. January 24, 2014. RT: April 17, 2014

[17] Discovery to Take Control of Eurosport International. The Hollywood Reporter. Georg Szalai. January 21, 2014. RT: April 17, 2014

[18] Discovery Acquires Stake in DogTV, a Network Aimed at Canine Viewers. Variety. Todd Spangler. April 8, 2014. RT:April 18, 2014.

[19] Discovery Wants Your Dog To Watch More TV. Bloomberg Businessweek. Kyle Stock.  April 8, 2014. RT: April 18, 2014.

[20] Discovery Buys Stake In A TV Channel For Dogs. Huffington Post. Bill Bradley. April 11, 2014. RT: April 18, 2014.

[21] Discovery teams with Howard, Grazer for online shows. USA Today. Roger Yu. April 3, 2014. RT: April 18, 2014.

[22] Brian Grazer, Ron Howard Launch ‘New Form’ Digital Studio With Discovery. The Hollywood Reporter. Natalie Jarvey. April 2, 2014. RT: April 18, 2014.

[23] Howard, Grazer to team with Discovery on Web shows. New York Post. Claire Atkinson. April 2, 2014. RT: April 18, 2014.

Gannett Broadcasting

Posted on by 
by Scott Weinstein

Gannett Co., Inc.
7950 Jones Branch Drive
McLean, VA 22107-0150
703-854-6000 / www.gannett.com

A Brief Overview

In 1923, Frank Gannet founded Gannett Company, Inc. in Rochester, New York. It began as an extension of Gannett’s newspaper company that was founded in 1906 and has expanded to a multi-media company that no longer just publishes newspapers (1). “Gannett is a media and marketing solutions company with a diverse portfolio of broadcast, digital, mobile and publishing companies.” They own more than 90 daily newspapers, about 1,000 weekly newspapers, 23 television stations and many more media holdings. Gannett operates in 41 U.S. states and six countries (2). Gannett is expanding its brand and as the CEO, Gracia Martore said at the UBS Global Communications Conference, “The media business does not stand still for even a minute we take for granted that change is relentless and we have to show up with our A game everyday.” (3)

Gannett Broadcasting: Company Overview

Gannett Broadcasting’s division is comprised of 23 television stations and its subsidiary Captivate. The former reaches 21 million households in 20 markets, which is approximately 18.2% of the U.S. population (2). The latter is a company that delivers news, information, and advertising through video monitors in elevators. They are currently located in North America and reach more than 4 million workers (4). At the end of 2011, the amount of employees, both full-time and part-time, totaled about 2,600 (5).

 

Executives (6)

The Faces of Gannett Company, Inc. (Lougee, Beall, Martore, Harker)(16,17,18,19)

Broadcast Office

David T. Lougee , President, Gannett Broadcasting

Lynn Beall; Executive vice president, Gannett Broadcasting, and president and general manager, KSDK-TV, St. Louis, MO

Company Office

Gracia Martore, President and Chief Executive Officer

Victoria D. Harker, Chief Financial Officer

Assets 

As noted earlier the company owns 23 different television stations across the country, in 21 different markets. Seven of the 21 markets owned by Gannett are in the top 20 market (7).

(20, 21, 22, 23)

The stations are comprised of 12 NBC affiliates, 6 CBS affiliates, 3 ABC affiliates, and two MyNetworkTV affiliates. These affiliation agreements expire with NBC in 2017, with CBS in 2015, and with ABC and MyNetwork TV in 2014. The most successful weekly audiences, based on the November 2011 Nielsen sweeps, are the CBS affiliate in Washington DC (WUSA-TV) with 1,797,000; the NBC affiliate in Atlanta, Georgia (WXIA-TV) with 1,602,000; and the NBC affiliate in Minneapolis-St.Paul, Minnesota (KARE-TV) with 1,297,000. (8)

The ratings of these stations continue to do well. Lucky for Gannett, more than half of its stations are NBC affiliates, and this past November was the first time since 2003 that NBC ranked number one in the Nielsen prime time ratings programming amongst adults 18-49. This increased revenue, as many people tuned into the NBC programming. Furthermore, the past Summer Olympics in London were the most watched games in Olympic history, attracting more than 200 million people. KUSA-TV in Denver was the top rated NBC market affiliate during the two-week span of the games. Their Atlanta and Minneapolis NBC affiliates were ranked second and third respectively; and their St. Louis and Phoenix did well. In total the Gannett owned affiliate stations took six of ten top NBC affiliate markets in terms of ratings during the Olympics (3).

Arizona FlagstaffPhoenix KNAZ-TV (NBC)KPNX-TV (NBC)
Arkansas Little Rock KTHV-TV (CBS)
California Sacramento KXTV-TV (ABC)
Colorado Denver KTVD-TV (My Network TV)KUSA-TV (NBC)
District of Colombia Washington WUSA-TV (CBS)
Florida JacksonvilleTampa-St. Petersburg WJXX-TV (ABC)WTLV-TV (NBC)WTSP-TV (CBS)
Georgia AtlantaMacon WATL-TV (My Network TV)WXIA-TV (NBC)WMAZ-TV (CBS)
Maine BangorPortland WLBZ-TV (NBC)WCSH-TV (NBC)
Michigan Grand Rapids WZZM-TV (ABC)
Minnesota Minneapolis-St. Paul KARE-TV (NBC)
Missouri St. Louis KSDK-TV (NBC)
New York Buffalo WGRZ-TV (NBC)
North Carolina Greensboro WFMY-TV (CBS)
Ohio Cleveland WKYC-TV (NBC)
South Carolina Columbia WLTX-TV (CBS)
Tennessee Knoxville WBIR-TV (NBC)

 

Financial Information

Gannett Company, Inc. is a publicly traded media holding company (GCI). On October 15 the third quarter results were released, and the broadcasting division’s success was monumental. Both revenue and profits were at a record high in all of Gannett broadcasting history. The operating revenue increased 36% from $174.3 million the last 3rd quarter to $237 million during the most recent 3rdquarter.  The television revenue was also up 38.1% from $168.8 million a year ago to $233 million. The substantial increase is mostly attributed to advertising, which includes $41.7 million spent on political advertising and $37 million spent on the summer Olympics related ads. The Olympics brought in an unprecedented amount of revenue from advertising. Their total was up 18% from four years ago during the Beijing Olympic games. Part of the explanation was that Gannett reached out to local advertisers to sell television time to. Lougee is looking to increase the revenue even more during the 2014 Winter Olympic games in Sochi, Russia. In total, political revenue for the year will be $150 million. Prior to the 2012 election, Gannett lacked a strong political footprint, but that changed during this election. Because of more local coverage of elections, especially in swing state markets including Colorado, Florida, and Ohio, political advertising increased by a significant margin. Another source of the revenue came from retransmission fees, which accounted for $22.3 million. With retransmission consent in 2013, Gannett  will receive 135-140 million from distributors, which is up 41 to 46% from 2012. The fourth quarter results are expected to be at an all time high. When the books are closed for Gannett’s fiscal year, the broadcasting division will report record growth and revenue (3) (9).

YTD Stock Price (December 6, 2011-December 6, 2012) (24)

As far as the stock market is concerned, the current share price for GCI is $17.88. Their share price has seen an incline for the most part, as a year ago it was being sold at $13.13 (10) Just recently, a report was released by Dividend Channel that named them the top dividend stock with insider buying. On October 23, the Board of Directors of Gannett announced that a dividend of $0.20 per share would be payable to stockholders just after the new year. As of now the company is on track to return dividends up to $1.3 billion through 2015. Throughout the UBS Global Media and Communications Conference a common theme that both the CEO and CFO spoke about was making sure an increasing level of capital is returned to their shareholders. Furthermore, there is currently a large amount of cash flow totaling over one billion dollars. That money will be used to return even more cash and to invest into things that will expand the Gannett brand (3) (11).

Recent Happenings

Gannett and Dish Network

(25)

In late May, Dish Network introduced its Auto Hop feature available on its DVR service. This new technology allows users to skip over commercials on broadcast networks. While this is beneficial for TV viewers it hurts the broadcasters who lose advertising revenue. As a result of this feature, Dish Network and Gannett were having difficulty renewing their retransmission agreements (12). Gannett was looking for a 300% rate increase to compensate for the loss of revenue from advertisers. Dish Network’s stance was that they wanted to take a stand for customer choice and control. Fortunately for subscribers, rather than suffer from a blackout, the two companies reached a deal as the October 7th deadline was slightly extended. The terms of the deal have not been released, but the new contract is long term according to press releases by both companies (13).

Gannett and DirecTV

(26)

DirecTV customers narrowly avoided a blackout of Gannett television stations across the country. As the November 30th deadline approached, Gannett warned their viewers that they may experience a blackout of affiliate stations until an agreement was reached. This was all because Gannett was looking for a fair deal for retransmission fees, while DirecTV said that Gannett was trying to get customers to pay almost twice what they pay now for their stations. While the deal was made by the deadline, the details of the agreement have not been made public yet (14).

Sources

1. History of Gannett

2. Background info on the company

3. 40th Annual UBS Global Communications and Communications Conference Slide Show presentation Dec 5, 2012

4. About Captivate

5. 2011 Annual Gannett Company, Inc. Report

6. The Gannett Company, Inc. Leadership Team

7. http://www.stationindex.com/tv/tv-markets

8. 2011 Annual Gannett Company, Inc. Report pgs. 14-17

9. Q3 Earnings, October 15, 2012

10. Google Finance

11. Press Release, December 5, 2012

12. http://online.wsj.com/article/SB10000872396390443768804578038742408997314.html

13. http://www.reuters.com/article/2012/10/08/us-dish-gannett-idUSBRE89403I20121008

14. http://www.rapidtvnews.com/index.php/25251/gannett-directv-avoid-local-tv-blackout.html

15. Captivate Image

16. Lougee image

17. Beall image

18. Martore image

19. Harker image

20. MyNetworkTV image

21. NBC image

22. ABC image

23. CBS image

24. Google Finance image

25. Dish Network image

26. DirecTV image

27. Gannett image