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Irish TV Venture in Talks With Comcast/Time Warner Cable for Nationwide Carriage Deal

Mhaoilchiaráin and O'Reilly launch Irish TV (Image: Picture: Frank Dolan )

Mhaoilchiaráin and O’Reilly launch Irish TV (Image: Picture: Frank Dolan )

Irish TV, focused on the Irish diaspora, is in talks with Comcast and Time Warner Cable to add its online channel to the national cable television lineups of both companies.

The network, not affiliated with Raidió Teilifís Éireann (RTÉ) — Ireland’s public broadcaster, is a Mayo-based commercial venture that launched in May 2014, and can be viewed only in part on some PBS stations and via Sky and Freesat in Europe.

John Griffin, chairman of Irish TV, has committed to spend up to $18.9 million on the network. He has the money, having earned millions while growing London minicab company Addison Lee. He sold his interest in the venture to the Carlyle Group for $486.3 million dollars last year.

The vision behind the Irish channel, which features homegrown cooking, music, and sports entertainment, originated with its founders Pierce O’Reilly and Máiréad Ní Mhaoilchiaráin. They agreed to let Griffin run the network after concluding negotiations carried out in a London pub.

Each Irish county (North and South) will have its own half an hour slot on the channel called County Matters.

In August, the Broadcasting Authority of Ireland, the country’s telecom regulator, began talks with Irish TV’s parent Teilifís Mhaigh Eo Teoranta for a broadcast license. Currently, the venture only operates in Europe because of a license issued by Ofcom, the British telecommunications regulator.

An Irish television license will allow the venture to operate directly within Ireland and facilitate programming agreements with RTÉ that could bring more mainstream Irish television programming to American television.

Winning a carriage agreement with Comcast and Time Warner Cable would bring the network more potential viewers than there are citizens of Ireland itself.

 

Cable Is #1 in Profits: 41% Cash Flow Margin Tops TV, Movies, Music, and Publishing Industries

Phillip Dampier September 17, 2014 Competition, Consumer News, Internet Overcharging 2 Comments

eyCable operators leveraged their near-monopoly on high-speed broadband and commercial business services to lead the entertainment and publishing industry in profitability, according to a report from consultant EY (formerly Ernst & Young.)

Cable companies now earn EBITDA (cash flow) margins of 41%, thanks primarily to their broadband divisions. Cable companies have managed to raise prices for Internet access, charge new fees to lease equipment, and monetize broadband usage with usage caps and usage-based billing while their costs to offer broadband service continue to decline rapidly.

“We are seeing that digital is very much driving profits now, instead of disrupting it,” said EY’s Global Media & Entertainment Leader John Nendick. “Companies are figuring out how to monetize the migration of consumers to a variety of digital platforms, and this insatiable demand for content is fueling growth throughout the industry.”

Just a few years ago, cable operators fretted that cord cutting of cable television packages and increased programming costs could take a major bite out of their profitability. But as telephone company broadband competition has waned, cable companies have been able to leverage their near-monopoly on high-speed broadband service with rate increases and usage-control measures that keep costs down and profits up. Customers have also been choosing higher-speed tiers with greater usage allowances at added costs, further increasing profits. The result is more revenue that more than compensates for the loss of profits from cable television.

According to EY, the cable industry will top everyone else in the 2014 survey of the sector. Cash flow margins for other related businesses: cable networks (37%), interactive media (36%), electronic games (29%), conglomerates (26%), satellite television (26%), publishing and information services (21%),  broadcast and network television (19%), film and television production (12%), and music (11%).

Cloudy Days for Bright House Networks Ahead? Comcast-Time Warner Merger Complicates Volume Discounts

(Original image: Musée McCord Museum - Re-envisioned by Stop the Cap!)

(Original image: Musée McCord Museum) — (Re-envisioned by Stop the Cap!)

Bright House Networks customers could face much higher cable television bills and a decline in technology upgrades thanks to a merger deal between two companies that should theoretically have no impact on them.

Bright House Networks has been an odd duck among cable companies since it was created from cobbled-together systems originally owned by Vision Cable, Cable Vision, TelePrompTer, Group W, Paragon and others. In the 1990s and early 2000s, Time Warner effectively ran the cable systems still owned by the Newhouse family. After the AOL-Time Warner merger, Advance/Newhouse decided to take back control of the management and operations of its cable systems, relaunching them under the Bright House Networks brand.

While the Newhouse family continues to assert its ownership and control of Bright House, it is highly dependent on Time Warner Cable to handle cable programming negotiations and broadband technology. That is why Bright House customers were sold “Road Runner” broadband service for many years – a brand familiar to any Time Warner customer. To this day, programming blackouts that affect Time Warner cable TV viewers usually also impact those subscribing to Bright House. Time Warner Cable also retains a minority ownership interest in Bright House.

Although the company is well-known in Indianapolis, Birmingham, suburban Detroit and Bakersfield, its presence is most recognized in central Florida, where it serves customers in Orlando, Daytona Beach, Lakeland, Tampa Bay, and many points in-between.

Despite the fact Bright House serves more than two million customers and is the sixth largest cable company in the country, it is small potatoes to major programmers like Comcast-NBCUniversal, Viacom, Disney, and others. All the best discounts go to satellite television providers and giant cable operators like Comcast and Time Warner Cable. Smaller operators pay substantially more.

That is where the merger between Comcast and Time Warner Cable comes in.

brighthouse1The federal government is likely to count Bright House’s 2.2 million customers as part of the Time Warner Cable family, at least as far as control of cable programming pricing is concerned. Despite Comcast’s voluntary commitment to keep its national share of the cable TV business under 30 percent with the merger of Time Warner, Comcast hasn’t taken seriously counting  the customers of the uninvited cousin – Bright House.

Logistically and legally, Comcast would assume control of Time Warner Cable’s interest in Bright House if the merger is approved by state and federal regulators. That may be too much for regulators to swallow.

Because Bright House is insignificant to Comcast and Time Warner Cable’s marriage plans, Comcast could end up terminating the arrangement, which even Bright House acknowledged would put it “at risk of losing the material benefits such agreements provide, include possibly raising costs for its customers and hampering its ability to compete effectively—a result that would certainly not be in the public interest.”

The Newhouse family has evidently seen the writing on the wall, hiring Wall Street investment bank UBS to advise whether it makes sense to sell. If Bright House does decide to hang out a “for sale” sign, Time Warner Cable has the right to bid first. But by that time, if things go according to plan, it might be Comcast ultimately swallowing up yet another large cable system.

Comcast’s “Improvements,” Including Digital TV, Come at a High Cost for Customers

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Comcast has offered the Commission a vague preview of how it intends to improve cable television service for New York customers, but rarely discloses important details about the costs and limitations their “improvements” will bring.

comcast octupusWhile Comcast is excited about the proposition of transitioning Time Warner Cable customers away from the current mixed analog-digital platform to an all-digital lineup, Time Warner Cable customers have paid less and avoided costly, unwanted extra equipment as a result of the choices consciously made by Time Warner Cable.

Comcast and Time Warner Cable have different philosophies about how to best deliver the bulging cable television packages most cable systems now offer:

  • Time Warner Cable adopted “Switched Digital Video” from BigBand Networks, a technology that lets Time Warner deliver only the digital signals that are being watched in a service group or node, instead of the entire lineup.[1] Since it is unlikely subscribers are watching every niche channel on offer, Time Warner has been able to reclaim unused bandwidth. As a result, customers using older cable-ready televisions can continue to access analog television channels without the use of a costly, often unwanted set top box.
  • Comcast has more aggressively chosen a  path to all-digital television service, moving most of their television channels to encrypted digital technology that requires a Comcast set top box, a less costly Digital Transport Adapter (DTA) designed for secondary-use televisions, or a CableCARD. Customers must choose one of these technologies, usually at an added-cost to access their cable television service.[2]

Time Warner Cable also began deploying DTA equipment in certain areas to free up additional bandwidth on its cable systems while still leaving most analog channels intact. The DTA boxes are supplied free of charge during an introductory phase lasting up to a year, after which a $0.99 monthly charge for each box is imposed.[3] (That fee has recently been raised in certain markets, including New York City, to $1.50/mo.[4] [5])

In contrast, Comcast customers were initially entitled to receive up to three no-cost DTAs to install on televisions not equipped with a Comcast set top box.[6]

comcast-cisco-dtaOn January 1, 2013 Comcast began informing subscribers a new $1.99/month “additional outlet service charge,” now applied for each DTA installed. [7]

Public officials in Eagan, Minn., responding to consumer complaints about the new charge, suspected Comcast was attempting an end run around the Federal Communications Commission’s prohibition of “excessive fees for cable equipment.”[8] The additional outlet fee was deemed by Comcast to be a service fee, not an equipment charge.[9]

Attorney Mike Bradley was hired by a group of suburban Minneapolis cable commissions to investigate the legitimacy of Comcast’s new DTA service charge. If the fee were classified as an equipment charge, Comcast would charge 50 cents per DTA based on rate forms filed with the Minnesota cable commissions he represents, Bradley told The Pioneer Press.[10]

For the average Comcast subscriber, the result was another rate increase in return for digital television service. Subscribers with three DTA’s now pay up to $5.97 extra per month in order to continue to receive the exact same programming on the same number of televisions within their household – a $25 annual surcharge per DTA, $75 if the customer uses three DTA’s, complained Eagan, Minn. Mayor Mike Maguire in a letter to Sen. Amy Klobuchar.[11]

Comcast’s fees, in addition to being well in excess of the actual cost of the equipment, will earn the company at least $550 million annually in new revenue – all for equipment that costs the company around $50 per unit.[12] Because Comcast is encrypting its lineup, even televisions equipped with QAM tuners, capable of receiving digital television signals without a set top box, will also eventually need the new equipment to unscramble television signals.

[1]http://www.cedmagazine.com/news/2009/09/time-warner-cable-serves-up-sdv-in-n.y.,-dallas,-l.a.
[2]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[3]http://www.cedmagazine.com/news/2012/01/time-warner-cable-wraps-up-all-digital-conversion-pilot-in-maine
[4]http://www.twcableuntangled.com/2013/04/were-converting-analog-signals-to-digital-across-the-new-york-region/
[5]http://www.timewarnercable.com/en/residential-home/support/faqs/faqs-tv/basictvencryption/what-will-the-digital-adapter-cost.html
[6] http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy
[7]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[8]http://transition.fcc.gov/Bureaus/Cable/News_Releases/nrcb4009.txt
[9]http://stopthecap.com/2013/02/21/comcast-calls-1-99-charge-for-digital-adapters-a-service-fee-to-avoid-fcc-complications/
[10]http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy?IADID=Search-www.twincities.com-www.twincities.com
[11]https://dl.dropboxusercontent.com/u/9008/pioneerpress/yourtechweblog/Eagan%20-%20Sen%20Klobuchar%20ltr%20re%20Cable%20Rate%20Concerns%203-5-13.pdf
[12]http://cisco-news.tmcnet.com/news/2011/04/25/5464600.htm

Comcast’s Much-Touted “X1” Platform Includes a Steep $99 Installation/Upgrade Fee

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The most expensive set top box you will ever rent.

The most expensive set top box you will ever rent.

At all three public informational meetings, a Comcast representative promoted the benefits of Comcast’s new X1 set-top box/platform which can provide enhanced features and integrate with the Internet to provide more detailed programming information and social media interaction.

The Comcast representative did not mention that customers must pay up to a $99 upgrade fee for the privilege of renting Comcast’s X1 platform.[1] That is well in excess of the cost of an entire month of cable TV service.

Time Warner Cable does not charge an upgrade fee for its set top boxes, including the latest models.

[1]http://www.multichannel.com/news/content/comcast-details-x1-upgrade-fee/356207

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