Time Warner Inc.

Posted on October 16, 2016 by Barbara

By: Nubia Dandridge, John Rattazzi, Johnny Pierce

Time Warner [1]

Company

Time Warner Inc (headquartered in New York City) is an international media and entertainment conglomerate. The conglomerate is segmented into three divisions: Turner is the branch of the company consisting of cable networks and digital media. Home Box Office (HBO) is the company’s domestic premium television and streaming service which includes international premium pay. Warner Bros is the segment of the company primarily responsible for the company’s role in entertainment for television, feature length films, video-games and home video production and distribution [1].

Background

Time Warner Inc. was originally founded in 1923, under the name Warner Brother Pictures Inc. Under the direction of Polish immigrant brothers Harry, Albert, Sam, and Jack Warner, Time Warner Inc. has gone from being a nickelodeon in Pennsylvania, to one of the largest media conglomerates in the world by partnering with Home Box Office Inc. and Turner Broadcasting [2].

Television Success

One of Time Warner Inc.’s most valuable assets is HBO. The premium television service is widely recognized today for its show Game Of Thrones, but their fall series premiere of Westworld has taken viewers by storm. The series premiere telecast drew 3.3 million viewers across multiple platforms by the following morning. This opening was 1.1 million viewers greater than the first day Game Of Thrones was released back in 2011 [3]. Westworld has been approved for a second season [4] due to increased viewership from streaming services HBO Go and HBO Now, which allows viewers access to HBO programming without a subscription to the traditional HBO television service.

Film Success

In September 2016 Time Warner acquired the commercial and tv rights to the “Star Wars” collection, (valued at $250 million) including “Rogue One: A Star Wars Story” and “Star Wars: A Force Awakens.” The deal makes TBS and TNT the only networks with legal rights over the series. Time Warner made a strategic move during a volatile in which networks are hustling to lock up as much content that already has a formidable audience attached to it. The DC subsidiary of Warner Bros. is sufficiently lucrative for the entire company. In relation to the 10 DC series on air this season, total revenues for the line up have surpassed $1 billion. The CW, the joint television station owned by Warner Bros. and CBS Corp. is home to half of those series.

Warner Brothers has seen its share of success since September. With movies such as Suicide Squad earning a total gross of $325.1 million [5] and Fantastic Beasts and Where to Find Them earning a total gross of $158.1 million [6] in just two weeks has earned Warner Brothers a total gross income of roughly $806 million since the beginning of September.

Company Fallbacks

Since September, a negative mark against Time Warner Inc’s overall performance is due to low ratings for Turner Broadcasting. Turner is most known for it’s networks like TNT, TBS, CNN, Adult Swim, HLN, and Cartoon Network. ratings are down 14% across all networks as younger demographics are opting more for streaming services like Netflix and Hulu. As of more recently, quarter three of 2016 came in with numbers 8% lower than they were this time last year [7].

The other recent flaw for Time Warner Inc. has been Warner Brothers. Asides from three recently released movies, every other movie released after August has struggled to even reach its budget. If Suicide Squad, Fantastic Beasts and Where to Find Them, and Sully, weren’t counted in the total gross, Warner Brothers would not have made enough money domestically to fund the movies. While this is upsetting for Time Warner Inc. they cannot be too disappointed because this is the best year [8] that Warner Bros has had since 2009 thanks to releases earlier in the year.

The financial success of the studio does not come without its qualms. In October 2016, Director Rick Famuyiwa walked away from directing The Flash with mention of creative differences between himself and the studio as the reason for his departure [9]. Before Famuyiwa, Seth Grahame-Smith stepped down from his role as director of the same film. Analysts claim that the tension between the creative vision directors are hired to develop and the executive oversight Warner Bros exercises over such projects could impact the studio’s ability to hire directors in the future, not just for their DC projects.

AT&T and Time Warner Inc.

Time Warner’s market value currently hovers at approximately $62 billion with AT&T in position to buy the company for $85.4 billion (as of October 22nd). In September and October 2016, senior executives from both AT&T and Time Warner met informally to discuss business strategies as well as a potential merger [10] of the two conglomerates. Acquiring Time Warner would allow AT&T to control one of the world’s major providers of pay-TV and one of the nation’s largest wireless and home internet providers. AT&T would also stand to inherit an extensive collection of content and programming from HBO to CNN as well as Cartoon Network and NBA basketball programming. If the deal is approved, Jeff Bewkes will resign from his position as CEO of Time Warner Inc after the transitional phase. President Elect, Donald Trump, however has spoken against the merger having said that his administration “will not approve [the deal]…because it’s too much concentration of power in the hands of too few.”

[11]

Time Warner Finances Going Forward

The news of a merger is coming off of a strong third quarter showing from Time Warner Inc. Coming less than two weeks after the announcement of the AT&T merger, Time Warner reported a third quarter earnings of $1.83 per share on a revenue of $7.2 billion, which was a 9% increase from the expected earnings of $1.37 per share on a revenue of $6.98 billion. These impressive third quarter earnings are a result of many recent successes in content produced by Time Warner, including HBO. Home Box Office saw a 4% increase in revenue to $59 million. Yet, in 2016 while content proved to be king, HBO also saw its content library decrease. With a potential influx of cash due to the potential AT&T merger, HBO can see itself become more like Netflix faster than Netflix can become HBO, contrary to the quote [12] of Netflix CEO Ted Sarandos. Due to the $85 billion dollar pay day Time Warner would receive for the merger, HBO could see its budget for original content increase from $2.2 billion, just a third of what Netflix spends on content. The merger could also result in an affirmation of Jeff Bewkes proposal for “TV Everywhere”[13]. Although the idea has not been a success, AT&T could make it a reality with their wireless subscription package. This idea of Time Warner putting their content “everywhere” will allow for shows like Game of Thrones or Westworld to vastly increase their audience.

Overview

Although many changes are likely coming to Time Warner, no immediate changes will be apparent in the near future. The focus for this next quarter, as well as the new year, will be on accelerating user subscriptions [14] for HBO Now, which could increase in the merger with a bundle package offered with AT&T services.

Sources

Sources:

Top 3 Companies Owned By Time Warner (TWX). Retrieved November 19, 2016. http://www.investopedia.com/articles/markets/102215/top-3-companies-owned-time-warner.asp.
Time Warner Inc. Retrieved November 20, 2016. https://www.britannica.com/topic/Time-Warner-Inc
Westworld’s Shaping Up to Be an Early Ratings Success for HBO. Retrieved October 16, 2016. http://www.vulture.com/2016/10/westworld-premiere-ratings-early-success-for-hbo.html
Westworld: Season One Ratings. Retrieved November 30, 2016. http://tvseriesfinale.com/tv-show/westworld-season-one-ratings/
Suicide Squad. Retrieved November 26, 2016. http://www.boxofficemojo.com/movies/?id=dc2016.htm
Fantastic Beasts and Where to Find Them. Retrieved November 29, 2016. http://www.boxofficemojo.com/movies/?id=fantasticbeasts.htm
Turner Lacking Script For Success. Retrieved November 25, 2016. http://www.broadcastingcable.com/content/turner-lacking-script-success/153449
Warner Bros. Retrieved November 20. http://www.boxofficemojo.com/studio/chart/?studio=warnerbros.htm
‘The Flash’ Movie Loses ‘Dope’ Rich Famuyiwa (Exclusive). Retrieved on November 2, 2016. http://www.hollywoodreporter.com/heat-vision/flash-movie-loses-dope-director-rick-famuyiwa-942604
AT&T Discussed Idea of Takeover in Time Warner Meetings. Retrieved October 21, 2016. https://www.bloomberg.com/news/articles/2016-10-20/at-t-said-to-discuss-idea-of-takeover-in-time-warner-meetings
What does AT&T, Time Warner Merger mean? Retrieved October 28, 2016. https://www.youtube.com/watch?v=JOt1ZJjLxdo
What the AT&T-Time Warner merger means for HBO. Retrieved October 27, 2016. http://qz.com/818603/what-the-att-time-warner-twx-merger-means-for-hbo/
AT&T’s Time Warner Purchase Acknowledges TV Everywhere’s Failure. Retrieved October 25, 2016. https://www.bloomberg.com/news/articles/2016-10-24/at-t-s-time-warner-purchase-acknowledges-tv-everywhere-s-failure
Time Warner’s Turner Inks Deal for DC Movies. Retrieved November 2, 2016. http://variety.com/2016/biz/news/turner-dc-movies-rights-1201906942/

Time Warner

Posted on October 16, 2016 by emmichae

Lizzie Michael and Andrew Maercklein

Time Warner, Inc. logo [1]

Time Warner, Inc.

One Time Warner Center
New York, NY 10019-8016
212-484-8000

Company

Time Warner, Inc. is an entertainment and media conglomerate whose works and influence reaches all over the world. First created in 1989 in a $14 billion merger between Time, Inc. and Warner Communications, Time Warner now owns magazines such as Time, People, and Sports Illustrated; HBO, The CW, and Cinemax, as well as the Turner Broadcasting System, which in turn holds networks such as TBS, CNN and Cartoon Network; DC Comics; and one of the world’s largest production companies, Warner Brothers Entertainment. [2] [3].

Some of Time Warner’s assets. [4]

The company has undergone a few trouble spots in the past, including a $164 deal with AOL in the year 2000. [5]. The deal, which eventually proved to be misguided and led to major financial losses in 2002, was said to be “the biggest mistake in corporate history” by current CEO and Chairman Jeff Bewkes. [6]. That being said, Time Warner has since rebouded and is currently enjoying success from several of its assets, including HBO and Warner Brothers, and is looking forward to the completion of an acquisition, with a total transaction value of
$108.7 billion, with AT&T. [7].

Who are some key executives?

: Jeff Bewkes – Chairman of the Board and CEO, Time Warner Inc. [8]

: Howard M. Averill – Executive Vice President and Chief Financial Officer [8]

: Paul T. Cappuccio – Executive Vice President and General Counsel [8]

: Gary L. Ginsberg – Executive Vice President, Corporate Marketing and Communications [8]

: Karen Magee – Executive Vice President and Chief Human Resources Officer [8]

: Carol A. Melton – Executive Vice President, Global Public Policy [8]

: Olaf J. Olafsson – Executive Vice President, International and Corporate Strategy [8]

Financial information

Time Warner is a publicly traded company on the NYSE under the ticket TWX. As of 11/17/16, their current stock price is $93.20, as compared to one of their primary competitors, Walt Disney Co., who is at $98.82. [9]. On Oct. 27 the company announced cash dividends for Common Stock at $0.4025 per share, with a record date of Nov. 30. and a payment date of Dec. 15. [10] [11]. Thanks in part to the AT&T announcement, Time Warner’s stock has been on the upswing, having increased nearly 22.07% since April 2016; additionally, about 67% of analysts covering Warner’s stock rate this as a good time to buy. [11].

TW revenues and earnings per share [12]

In Warner’s 3rd quarter reports for 2016, total revenues for Turner, HBO, and Warner Broadcasting combined were at more than $7 billion, and there was an increase of $153 million in cash and cash equivalents. [13]. With the recently released Fantastic Beasts and Where to Find Them and HBO’s Westworld recently having success, revenues from ticket sales and merchandising for Time Warner can be expected to increase in 2016’s 4th quarter, and should give the company a strong year-end yield. [14].

Warner Brothers

Warner Bros. Logo [15]

Warner Bros., which was founded in 1923 and notably produced the first “talkie” in 1927’s The Jazz Singer, is one of the largest production companies in the world, with both New Line Cinema and DC Films in its toolbox. [16]. In 2015, Warner Bros.’ worldwide box office receipts exceeded $3 billion for the ninth consecutive year ($3.71 billion worldwide), and saw both international and domestic reaching the billions. [17].

[18]

The company houses several major franchises, including the Matrix series, the Harry Potter Franchise, and the world of DC Comics. In 2016 alone, multiple films were released to massive success, including Batman v Superman: Dawn of Justice, Sully, Suicide Squad, and Fantastic Beasts and Where to Find Them. Suicide Squad was in theaters for an impressive 14 weeks and earned more than $700 million worldwide, while Fantastic Beasts has been open for less than two weeks and has already made nearly $500 million. [19] [20].

This success will likely carry into 2017, as Wonder Woman, Justice League, and two more animated Lego movies are all slated for wide release. [21].

Machinima’s logo [22]

In news besides its releases, Warner Bros. also recently announced it will acquire Machinima, a “global programming service and production company” with a focus on gamer culture. [23]. The deal, which was estimated to be just slightly under $100 million, will allow Machinima to be its own entity within the Warner Bros. Digital Networks. [24].

HBO

HBO logo [31]

Home Box Office, or HBO, is one of Time Warner’s most successful divisions. In terms of its financial performance, in the 2016 third quarter HBO’s revenues increased 4%, or $59 million, to $1.4 billion due to a 5% increase in subscription revenues. [12].

HBO’s content has gone over incredibly well with viewers. HBO took home 22 Primetime Emmys at the 2016 Emmy Awards, the most of any other network for the 15^th year in a row. [12] [29]. Shows such as Veep, Game of Thrones, and Last Night with John Oliver all have loyal fan bases, while newcomer Westworld premiered in October 2016 to more than 13 million viewers. [12].

In other news, HBO just recently launched a new video streaming service in Spain, HBO España, that is expected to very well. The service offers both original HBO content, as well as films and programming from other networks as well, like Disney, Nickelodeon, and other Spanish programming. [30].

AT&T Merger

Click here for AT&T and Time Warner Merger (Video): http://nyti.ms/2exY5SK [27]

AT&T is looking to purchase Time Warner, Inc. in a $85 billion deal, and despite many setbacks, AT&T is confident the deal will go through. [25]. Were the FCC to oversee this deal, the time frame would have been elongated and the deal itself would be much less likely to go into effect. However, it is likely the deal will not be subject to the tight restrictions set by the FCC, as the FCC may be excluded from the process and the decision will be made by the Department of Justice. Randall L. Stephenson, the CEO of AT&T, is very optimistic regarding this scenario and said this deal will satisfy not only those looking for earnings growth, but also investors that are simply searching for income. [27]. However, this deal will cause AT&T to push its debt upwards of $190 billion. [27]. The average user of DirecTV Now will pay $35 per month, which translates to $1.32 gross margin, and despite an apparent lack of funding, there are expected to be approximately 15 million paid subscribers by 2020. [26].

AT&T logo [28]

Many investors are skeptical of the deal and doubt the level of success predicted by AT&T. AT&T, being the only company of its competitors to move in this direction, will be able to corner a large section of the market before anyone else. Through securing customers with a low price now, AT&T hopes to attract many more consumers in the future while still being able to raise the price of service as necessary. [26]. Furthermore, AT&T wants to boost their wireless business in an attempt to take back some of the market from other wireless companies. They plan to do this by allowing wireless users to watch DirecTV without using data. This is known as zero-rating and it’s frowned upon by the FCC because it would allow for AT&T to reduce competition, especially among its own assets. [25]. Between the low prices as well as other incentives to switch, AT&T is focused on increasing its consumer following as opposed to generating revenue. Revenue will theoretically be the focus after AT&T has accrued a mass following. In addition, it’s predicted there will be less subscription cancellations as well as a large boost in advertising revenue. [25]. Should the deal be successful, it will be one of the largest to date and will push AT&T further ahead of competitors. Should the deal not be approved, or even fail, AT&T will have to tread very carefully to avoid serious damage to the company’s finances, as well as the integrity of the company.

[27]

Resources

[1] Time Warner Cables Customer Service Phone Number, Office Address, Toll Free Helpline Support. Retrieved November 27, 2016. http://www.officeaddresshelplinenumber.com/time-warner-cables-customer-service-phone-number-office-address-toll-free-helpline-support/

[2] The Creator of Time Warner, Steven J. Ross, Is Dead at 65. Retrieved November 27, 2016. http://www.nytimes.com/1992/12/21/obituaries/the-creator-of-time-warner-steven-j-ross-is-dead-at-65.html

[3] Top 3 Companies Owned By Time Warner (TWX). Retrieved November 27, 2016. http://www.investopedia.com/articles/markets/102215/top-3-companies-owned-time-warner.asp

[4] Company Profile. Retrieved November 27, 2016. http://www.timewarner.com/company

[5] Statistics on Mergers. Retrieved November 27, 2016. https://web.archive.org/web/20120106045040/http://www.imaa-institute.org/statistics-mergers-acquisitions.html

[6] AOL merger was ‘the biggest mistake in corporate history’, believes Time Warner chief Jeff Bewkes. Retrieved November 27, 2016. http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/media/8031227/AOL-merger-was-the-biggest-mistake-in-corporate-history-believes-Time-Warner-chief-Jeff-Bewkes.html

[7] AT&T to Acquire Time Warner. Retrieved November 27, 2016. http://about.att.com/story/att_to_acquire_time_warner.html

[8] Senior Corporate Executives. Retrieved November 27, 2016. http://www.timewarner.com/company/management/senior-corporate-executives

[9] TWX: NY. Retrieved November 27, 2016. https://www.bloomberg.com/quote/TWX:US

[10] Time Warner Declares Regular Quarterly Cash Dividend. Retrieved November 27, 2016. http://www.timewarner.com/newsroom/press-releases/2016/10/27/time-warner-declares-regular-quarterly-cash-dividend

[11] Dividend Action: Time Warner Inc. (NYSE:TWX) advises to “Mark your calendars” for Dec 15, 2016; dividends expected to reach $0.40. Retrieved November 27, 2016. http://friscofastball.com/2016/11/27/dividend-action-time-warner-inc-nysetwx-advises-to-mark-your-calendars-for-dec-15-2016-dividends-expected-to-reach-0-40/

[12] Time Warner Inc. Revenue & Earnings Per Share (EPS). Retrieved November 27, 2016. http://www.nasdaq.com/symbol/twx/revenue-eps

[13] Earnings Releases & Related Materials. Retrieved November 27, 2016. http://ir.timewarner.com/phoenix.zhtml?c=70972&p=quarterlyearnings

[14] Weekend Box Office: November 25-27, 2016. Retrieved November 27, 2016. http://www.boxofficemojo.com/weekend/chart/

[15] Warner Bros. Logo Design Evolution. Retrieved November 28, 2016. http://annyas.com/screenshots/warner-bros-logo/

[16] Warner Bros. Entertainment Inc. Retrieved November 28, 2016. http://www.warnerbros.com/studio/divisions/warner-bros-entertainment-inc

[17] Warner Bros. Pictures. Retrieved November 28, 2016. http://www.warnerbros.com/studio/divisions/warner-bros-pictures

[18] Fantastic Beasts and Where to Find Them – Final Trailer [HD]. Retrieved November 28, 2016. https://www.youtube.com/watch?v=Vso5o11LuGU

[19] Box Office Mojo: Suicide Squad. Retrieved November 28, 2016. http://www.boxofficemojo.com/movies/?id=dc2016.htm

[20] Box Office Mojo: Fantastic Beasts and Where to Find Them. Retrieved November 28, 2016. http://www.boxofficemojo.com/movies/?id=fantasticbeasts.htm

[21] Warner Bros., Quietly Thriving, Recasts Its Own Story. Retrieved November 28, 2016. http://www.nytimes.com/2016/11/08/business/media/warner-bros-quietly-thriving-recasts-its-own-story.html

[22] Machinima. Retrieved November 28, 2016. http://www.machinima.com/

[23] Warner Bros. Entertainment to Acquire Machinima. Retrieved November 28, 2016. http://www.warnerbros.com/studio/news/warner-bros-entertainment-acquire-machinima

[24] Warner Bros. Acquires Full Control of Machinima. Retrieved November 28, 2016. http://variety.com/2016/digital/news/warner-bros-acquires-machinima-1201920793/

[25] McAlone, Nathan. “Here’s Why AT&T Is Buying Time Warner, and Why It Thinks the Government Can’t Stop the Sale.” Business Insider. Business Insider, Inc, 15 Nov. 2016. Web. 28 Nov. 2016. http://www.businessinsider.com/att-time-warner-merger-government-regulation-2016-11

[26] Molla, Rani, and Shira Ovide. “AT&T Plays It Forward.” Bloomberg.com. Bloomberg, 23 Nov. 2016. Web. 28 Nov. 2016. https://www.bloomberg.com/gadfly/articles/2016-11-23/at-t-wants-digital-video-share-with-direct-tv-now

[27] Morgenson, Gretchen. “The AT&T-Time Warner Merger: A Match Built on Hope.” The New York Times. The New York Times, 28 Oct. 2016. Web. 28 Nov. 2016. http://www.nytimes.com/2016/10/30/business/the-att-time-warner-merger-a-match-built-on-hope.html?_r=0

[28] LLC, UnderConsideration. “Reviewed.” Brand New: New Logo and Identity for AT&T by Interbrand. N.p., n.d. Web. 28 Nov. 2016. http://www.underconsideration.com/brandnew/archives/new_logo_and_identity_for_att_by_interbrand.php#.WDyz-6IrL_Q

[29] How FX Broke HBO’s Grip on the Emmy Awards. Retrieved November 28, 2016. http://fortune.com/2016/09/19/emmy-awards-2016-hbo-fx/

[30] HBO Launches in Spain, Adds Content from Disney, Nickelodeon. Retrieved November 28, 2016. http://variety.com/2016/biz/global/hbo-espana-spain-disney-nickelodeon1201927778-1201927778/

[31] HBO Logos. Retrieved November 28, 2016. https://www.homeboxoffice.com/lodging/cmp/logos.html

Comcast

Gallery

Posted on March 27, 2015 by William Skalmoski

This gallery contains 8 photos.

By Will Skalmoski Comcast Corporation Comcast Center 1701 JFK Boulevard Philadelphia, PA 19103 About Ralph Roberts founded Comcast Corporation with the purchase of a 12,000-subscriber cable system in Tupelo, Mississippi in 1963. The corporation now includes two businesses, Comcast Cable … Continue reading →

DirecTV

Posted on October 5, 2014 by mjnixon

by Marla Nixon

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]

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.

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].

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].

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].

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

Time Warner Cable

Posted on October 5, 2014 by htfergus

by Dan Watson

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Key Executives (13)

Robert D. Marcus
Chairman and CEO

Arthur T. Minson, Jr.
EVP and CFO

Dinesh C. Jain
COO

Ellen M. East
EVP and CCO

Contact (14)

One Time Warner Center

New York, NY 10019-8016

212-484-8000

http://www.timewarnercable.com/en/residential.html

History

In 1992, American Television and Communications (ATC) and Warner Cable merged to become Time Warner Cable (1). Not long after, in 1996, they released the first cable-delivered high speed internet, called Roadrunner (1). Following this was the release of digital cable and video on demand in 1999, digital phone service in 2003, and then finally the “Triple Play” service in 2005 (1). In 2007, Time Warner Cable (TWC) went public, and two years later, in 2009, they separated themselves from their parent company, Time Warner Inc (1).

About The Company

Time Warner Cable is a cable provider that offers high speed internet, digital phone services, and cable services to over 25 states, including Texas, North Carolina, and New York State (1). The company is subscription based, meaning customers pay a certain price per month to receive the content. Cable plans range anywhere from $20 to $50 per month, internet prices range from $35 to $65 per month, and phone service range from $10 to $20 per month (2). Subscribers can also choose the three service deal, which gives you video, phone, and internet for anywhere from $110 to $130 per month (2). As of September 30, 201, the end of their 3rd quarter, TWC has a total of 15.1 million subscribers receiving one or more of their services (1). 10.8 million of them are video subscribers, 11.5 million are internet subscribers, and 4.9 million of them are phone subscribers (1). In New York, North Carolina, and Texas, TWC provides local, all-news channels (1). TWC currently employs 50,000 people all over the US, including a special program that hires military veterans in areas such as technology, construction, and marketing sales (3). In 2013, TWC CEO Glenn Britt retired. TWC announced that the company’s COO at the time, Robert D. Marcus, would proceed him. He is currently the Chairman and CEO of TWC (1).

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Financials

Time Warner Cable is a publically owned company, and is traded on the New York Stock Exchange under the symbol TWC (1). Currently, TWC on the New York Stock Exchange is $148.54 USD (12). Because TWC is a publically owned company, it is obligated to let the public know how it is doing, in the form of quarterly reports. The latest quarterly report, the end of the third quarter, was released on September 30th, 2014 (4). In the fourth quarter alone, TWC had a revenue of $5.7 billion, which was up 3.6 percent, when compared to last year’s third quarter (4). This year to date (September 30th), the company has a total revenue of $17.1 billion, which is a 2.9% increase when compared to the same figure from last year (4). The report boasts the “best third-quarter customer relationship performance in six years” (4). Services in particular, their video service continues to provide the most money out of all the other services. Their video service provided $2.5 billion, while the internet service provided $1.6 billion, and the phone service provided $476 million (4). One notable difference is that both the revenue of the video and phone services for the third quarter went down from last year, with the video bringing in $2.6 billion, and the phone bringing in $498 million (4).

The Comcast, Time Warner Cable Merger

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Back on February 13th, Comcast publicly announced that they wanted to by Time Warner Cable for $45.2 billion dollars (5). Since then, both the FCC and The United States Department of Justice have been investigating and evaluating the deal to see if they will either approve, or decline the deal. On October 8th and 9th, both company’s shareholders approved of the acquisition (6). For TWC, more than 99% of votes from shareholders voted in favor of the deal, showing the support of the deal from the shareholders (6). Immediately after the announcement of the deal, there was a wave of backlash and criticism against the deal. One of the main concerns of the deal is the fact that if the deal were to go through, the ensuing company would have control of roughly 30% of the pay TV market (6). This company would have 33 million subscribers, leagues above any other cable provider (5). Because of this, people are worried that the result of this deal would have far much too control on the cable, phone, and internet markets. With such control, this company would have would have more power to raise prices (5). This would be because they would be the only cable provider in a lot of areas, and customers would have no other option than to pay whatever amount for that cable provider. Some are also worried that this deal could affect competition and innovation. The company could have so much control over the market, that it might deter newcomers from trying to enter the market (5). Because of this, there would be inherently less competition, and much less innovation, as all of the new content and technology a new company could bring to the market would be much less inclined to jump in (5).

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One of the biggest issues of the deal is the possibility of net neutrality being hurt following the completion of the deal (7). Net neutrality is the idea, and law, that every source on the internet is treated equally, and has the same access as any other source (7). This applies heavily to online streaming sites like Netflix and Hulu. Their whole, or at least majority of their business is based on their ability to stream content to subscribers via the internet. With the completion of the deal, some are worried that the cable company would have so much control, that they could create internet “fast lanes”, and “slow lanes” (7). In other words, Comcast/TWC could make Netflix or Hulu pay an extra amount of money for their products to be streamed faster and in higher quality through the internet that the cable company provides its customers (7). President Barack Obama recently released a statement, saying that net neutrality is essential, and that any deal hindering that would hurt the economy (8). He also called for the FCC to create new rules regulating net neutrality (8). Both parties of the deal have since stated that the deal is still proceeding (9).

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One of the biggest oppositions to the deal happened in Lexington, Kentucky. Arguing over poor customer service, the city was unable to reach a new franchise agreement with TWC, and planed on denying the transfer of ownership, and looking for other cable providers (10). This would have proved a tough task, though, because TWC owns all of the existing cable infrastructure in the city (10). On November 20th, however, the city agreed to a 10 year franchise agreement with TWC, ending negotiations and backlash of the pending deal (11).

Sources

(1) http://www.timewarnercable.com/en/about-us/company-overview.html

History of Time Warner Cable, DR: 11/26/14

(2) http://www.timewarnercable.com/en/plans-packages/cable-internet.html#3services

Time Warner Cable, Packages and Plans, DR 11/26/14

(3) http://jobs.timewarnercable.com/content/military/

Time Warner Cable, Jobs and Military, DR 11/26/14

(4) http://ir.timewarnercable.com/files/2014%20Earnings/3Q14/aQ3-2014-TWC-Earnings-Release-FINAL_v001_a0q10j.pdf

Time Warner Cable Third Quarterly Report, DR 11/21/14

(5) http://www.washingtonpost.com/business/economy/comcast-time-warner-agree-to-merge-in-45-billion-deal/2014/02/13/7b778d60-9469-11e3-84e1-27626c5ef5fb_story.html

Washington Post, Comcast and TWC agree to deal, DR 11/19/14

(6) http://online.wsj.com/articles/time-warner-cable-shareholders-approve-merger-deal-with-comcast-1412869575

The Wall Street Journal, Shareholders Approve, DR 11/20/14

(7) http://www.nytimes.com/2014/11/15/opinion/why-the-fcc-should-heed-president-obama-on-internet-regulations.html?_r=0

The New York Times, Net Neutrality Concerns, DR 11/23/14

(8) http://www.usatoday.com/story/news/nation/2014/11/10/obama-internet-net-neutrality/18793429/

USA Today, Obama’s Statement on Net Neutrality, DR 11/25/14

(9) http://www.huffingtonpost.com/2014/11/13/comcast-time-warner-full-steam-ahead_n_6149068.html

Huffpost, Deals moving Forward, DR 11/24/14

(10) http://www.kentucky.com/2014/10/07/3468773_citys-action-could-kill-time-warner.html?rh=1

Kentucky.com, Lexington Opposes Deal, DR 11/19/14

(11) http://wuky.org/post/lexington-signs-franchise-agreement-time-warner-cable

WUKY.org, Lexington Agrees to Deal, DR 11/27/14

(12) http://www.reuters.com/finance/stocks/companyProfile?symbol=TWC.N

Reuters, TWC Stock Information, DR 11/30/14

(13) http://www.timewarnercable.com/content/twc/en/about-us/leadership/overview.html

Time Warner Cable Leadership, DR 11/28/14

Time Warner Cable Leadership Photos, DR 11/28/14

(14) http://www.timewarner.com/contact-us

Time Warner Cable Contacts, DR 11/28/14

(15) http://logos.wikia.com/wiki/File:Time_Warner_Cable_2010.png

Time Warner Cable Logo, DR 11/30/14

(16) http://g.foolcdn.com/editorial/images/144432/comcast_twc-via-comcast-release_large.png

Comcast, Time Warner Cable Image, DR 11/30/14

(17) http://static.squarespace.com/static/514c6ec7e4b0f1fab133877d/514e614fe4b0e29595febc04/514e6178e4b045db9416cc37/1364091272056/?format=1000w

TWC Triple Play Image, DR 11/30/14

(18) http://cdn.arstechnica.net/wp-content/uploads/2013/09/7362006206_ea7fa6b6f8_z.jpg

Net Neutrality Under Attack Image, DR 11/30/14

(19) http://images.bidnessetc.com/img/f1e5284674fd1e360873c29337ebe2d7-president-obama-supports-net-neutrality-addresses-fcc.jpg

Obama On Net Neutrality

DirectTV

Posted on October 5, 2014 by Nicholas Sabatino

by Nick Sabatino

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 [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 [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 [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.