[flv]http://www.phillipdampier.com/video/CNN Fox Time Warner Takeover 7-16-14.mp4[/flv]

CNN broke into regular programming this morning with “Breaking News” the news network may be acquired, at least temporarily, by Rupert Murdoch, owner of Fox News. (2:37)

Rupert Murdoch is grasping for Time Warner (Entertainment).

Rupert Murdoch usually gets what he wants. What he wants now is Time Warner (Entertainment), but he will have to pay a lot to get it.

This morning, Time Warner went public with its rejection of Murdoch’s opening bid of $80 billion, made through 21st Century Fox. That represents a 20% premium for Time Warner shareholders, but executives at the entertainment company that owns HBO, Cinemax, CNN and Turner Broadcasting delivered a firm “no” in response, calling Murdoch’s bid too low.

Although initially rebuffed, many believe the tenacious Murdoch will be back until he wears down Time Warner’s board.

“Rupert Murdoch is not going away,” said Porter Bibb, managing partner at Mediatech Capital Partners. “He’s going to keep upping the price until he gets it.”

Some analysts speculate the magic number will be somewhere in the $100 billion range, despite the fact sources tell CNN that Time Warner really prefers remaining independent.

In light of the recent frenzy of mergers among telecom entities, some believe Time Warner made a major mistake when it spun off its cable properties in 2009 to become wholly independent Time Warner Cable, which today has nothing to do with Time Warner itself. At the time it decided to part ways with its cable systems, the company was still restructuring itself after the failure of the 2000 AOL-Time Warner merger deal, which took years to completely unwind. While the early 2000s saw media consolidation as an important priority, the inability to properly monetize the joint assets of super-sized conglomerates made spinoffs more fashionable.

Time Warner effectively sold off its in-house distribution platform: Time Warner Cable systems that could be easily convinced to carry every Time Warner-owned network. Comcast didn’t and has become a larger content and distribution company because of its ownership interests in cable networks and its acquisitions like NBC and Universal Studios.

Comparing the two models today, many Wall Street analysts believe Comcast’s vision that bigger is better is probably the right one, especially as cable television faces new competitive threats from online video.

Murdoch clearly believes that, and Bibb speculates Murdoch’s interest in Time Warner is really all about HBO.

[flv]http://www.phillipdampier.com/video/Bloomberg Murdoch Wants HBO 7-16-14.flv[/flv]

Bloomberg News talked with Porter Bibb, managing partner at Mediatech Capital Partners, who believes Rupert Murdoch would buy all of Time Warner just to get his hands on HBO. (6:29)

“It’s really now HBO that’s the driver, and I think that’s the Holy Grail that Rupert had his eye on,” said Porter Bibb, managing partner at Mediatech Capital Partners, said in a Bloomberg News radio interview. “It’s a huge money-maker with a huge potential. And probably the only Netflix killer that’s in the world right now.”

Fox and its advisers value HBO, the home of “Game of Thrones” and “Girls,” at more than $20 billion, said one person familiar with the negotiations.

HBO GO, HBO’s online streaming platform, is currently hamstrung by content companies imposing restrictions to make sure the online video service is only sold to HBO premium channel subscribers. Nobody can buy HBO GO a-la-carte. But the TV Everywhere-like service is wildly popular with subscribers, some who use it more than they actually watch HBO on linear television. Combining HBO’s coveted content with Fox’s deeper movie and television show library could deliver significant competition to Netflix and Amazon’s video offerings. Murdoch’s media empire is global, opening the door to an international streaming video service.

In short, Rupert Murdoch wants HBO so badly, he’s willing to buy all of Time Warner, Inc. to get it.

“If they succeed, if Rupert gets Time Warner, what he’s got is HBO and Warner Brothers and that’s it,” Bibb said. “He doesn’t need another movie studio. 21st Century Fox is doing great right now. It’s HBO.”

To avoid political landmines, the owner of Fox News Channel said he is willing to spin-off CNN to avoid perceptions that his favored conservative news channel would now control the second largest cable news network. But Murdoch would also effectively control three broadcast television networks if the deal succeeds — FOX, the CW, and MyNetworkTV. Admittedly the latter two lack significant audiences and don’t produce any news or public affairs programming, but they can have influence over their choice of local broadcast affiliates, some who still produce local news, especially in larger cities.

If a deal is reached, four giant media conglomerates will have control over 90 percent of American media.

[flv]http://www.phillipdampier.com/video/WSJ Time Warner Fox Merger 7-16-14.flv[/flv]

The Wall Street Journal notes this kind of media consolidation would never have been possible just a decade or two ago. But does another media mega-merger even make sense? A lot of those on Wall Street believe it does. (5:23)

Friday is the last day to submit your views on Net Neutrality with the Federal Communications Commission. Although there may be some future opportunities to comment, it’s important to make your voice heard with the FCC today. Almost 650,000 Americans have done so to date, and we need to see this number rise even higher to combat the influence and power of Big Telecom companies looking to turn the Internet into a corporate toll booth.

If you recall, FCC chairman Tom Wheeler is promoting a scheme where big ISPs like Verizon, AT&T and Comcast can divide up the Internet and introduce toll lanes allowing preferred paid traffic to travel on the Internet at faster speeds, usually at the expense of unpaid traffic that will get relegated to an Internet slow lane. It’s pay to play, and customers of these ISPs are already getting a preview of the new corporate road map for the net. Netflix viewers on ISPs that don’t have a paid agreement to handle video traffic suffer from rebuffering and lower quality video. But ISPs collecting tolls from Netflix don’t subject their customers to a degraded online video experience. Of course, before ISPs realized they could make money selling fast lanes, Netflix worked fine on virtually all of these providers.

Wheeler’s proposal would extend the two-tiered Internet to other websites and service providers, allowing big telecom companies to hand-pick winners and losers and discriminate in favor of their own Internet traffic. Comcast does that today with online video on certain game consoles. If that video comes from Comcast, it doesn’t count against any usage caps. If it doesn’t, it could get rough sticking to Comcast’s arbitrary usage allowance.

The FCC is in way over its head, unaware of the creative ways ISPs can find loopholes large enough to drive through any well-intentioned consumer protections. There is only once certain way to keep ISPs honest — reclassify them as what they should have been all along – a telecommunications service subject to common carrier rules. That would guarantee ISPs could not meddle with your Internet service for financial gain, could not artificially slow down “non-preferred” traffic to make room for paid traffic, and would guarantee that Internet applications of the future will succeed or fail on their merits, not on how much money they are willing to spend.

Since the FCC website is jammed today, we recommend e-mailing the Commission by this Friday at: [email protected]

Our friends at Free Press have published some sample comments they are getting, which may help you formulate yours. Here is ours as well:

Dear Chairman Wheeler,

Although we believe your intentions are good, your proposed Net Neutrality rules simply do not afford enough protection to preserve a free and open Internet. Troubling signs are already clear as providers test how much they can get away with meddling with Internet traffic. The wireless experience is replete with examples of selective speed throttling, usage caps, and traffic discrimination that allows some content to escape the usage meter and throttle while competitors cannot.

The Internet is a transformative experience for many Americans because for the first time in a long time, entrepreneurs can build online businesses that are judged on their merit, not on how much money they have to spend to achieve and maintain prominence. Anything that allows an ISP to collect additional funds for a “preferred” traffic lane will come at the detriment of others who have to share the same broadband pipe. This is especially evident in the wireless world, which escaped even the light touch regulatory framework of your predecessor. Providers promptly began creating new schemes to further monetize growing data traffic, bandwidth shortage or not. Almost none of these changes really benefit customers — they are simply new revenue-making schemes.

A foreshadowing of what is likely to happen under your proposal is also apparent with Comcast and Netflix. For several years subscribers had no trouble accessing online video. But when the issue of traffic compensation was reintroduced by Internet Service Providers, the upgrades to manage natural Internet growth largely stopped and the Netflix viewing experience on these ISPs deteriorated. Verizon, AT&T and Comcast all argue that a paid traffic deal would adequately compensate them to enhance the viewing experience customers already pay good money to receive with or without a paid peering arrangement with Netflix.

Money drives these debates. If an ISP properly managed their broadband infrastructure, there would be no incentive for any company to contract for a better online experience on a so-called “fast lane” because existing service would perform more than adequately. When a company cuts back on those upgrades, a market for paid prioritization appears. Customers will ultimately pay the price, primarily to ISPs that already enjoy an enormous margin selling broadband service at inflated prices.

A rising tide floats all boats, so your focus should not be as short-sighted as allowing ISPs to divide up the limited broadband highway. The FCC should instead focus on setting the conditions to hasten new competition and force existing providers to upgrade and maintain their networks for the benefit of all subscribers and content producers. The FCC must also move swiftly to cancel state bans on community broadband networks, eliminate regulations that deter broadband start-ups, and maintain enough oversight to guarantee a level playing field on which all can compete.

There is only one way to effectively accomplish all that. Reclassify broadband service the way it should have been classified all along: as a telecommunications service subject to common carrier regulations. Canada has been very successful requiring ISPs to open their last mile networks to competitors, which have allowed people to avoid compulsory usage caps. Customers have a choice of multiple providers from their local phone or cable company, giving rise to much-needed competition.

With strong Net Neutrality, consumers can reach the websites they want without interference. Ignore nonsense suggesting Net Neutrality is a government takeover or censors the Internet — two provably false assertions. In fact, Net Neutrality is the opposite.

I urge you to move with all speed towards reclassification, if only to prevent the inevitable legal challenges to any future policies built on the shakier ground of the current framework, which has not held up well under court scrutiny. I hope the voices of more than a half-million Americans contacting you on this issue will be more than enough to overcome industry objections. We are not asking for 1950s-style telephone regulations. We just want a legally affirmed platform that allows the Internet of today to continue being successful tomorrow.

Yours very truly,

If that one hour show you just watched online seemed to take an hour and ten minutes to watch, you are not dreaming.

Some cable operators are loading up on forced advertising that interrupts the viewing experience and delivers a withering blast of ads in numbers that exceed what you would see on traditional television.

“We watched TNT’s “The Last Ship” last week,” said Rich Greenfield from BTIG Research. “The first 15 minutes were ad-free, that was awesome. The problem is the last 30 minutes of the show is interspersed with 20 minutes of ads, many of them the same ad, and sometimes the ad even plays continuously back to back to back.”

Greenfield believes cable companies like Comcast are trying to enforce the worst of television from five to ten years ago — an ever-increasing advertising load you can’t skip past that cuts into the time available for programs.

“I just think that is really hard to push on consumers,” Greenfield said, noting that many have left traditional linear television for Netflix, Amazon, and the increasingly popular time-shifting DVR, which lets viewers record shows and skip past advertising.

“If you look at online, not only is the ad load not skippable, we are even seeing ad loads that are heavier than on TV itself,” Greenfield added.

[flv]http://www.phillipdampier.com/video/Tackiest Lawyer Commercial Ever.mp4[/flv]

The consummate low-budget ad ready to interrupt Breaking Bad: Want to “get rid of that vermin you call a spouse” and “get out of that hell hole you call a marriage?” Don’t “give thousands of dollars to some piece of crap wearing a three-piece suit downtown” or another $25 to that “illiterate boob” at the courthouse who gave you the wrong forms. No, choose Divorce-EZ or DivorceDeli.com! Click or call today. (1 minute)

Greenfield

On-demand, online viewing is not limited by the same time constraints traditional broadcast television is, so a show that runs 59:30 with ads on NBC increasingly takes an hour and five minutes to watch online because of the increasing number of ads.

Greenfield believes increasing ad loads will only drive consumers away from cable’s online TV Everywhere services.

“That is the mistake they are making,” Greenfield said. “They are either driving you to Netflix, they are driving you to piracy, or they are driving you to use a DVR, but they are making you not want to watch traditional television on these online apps.”

“Video advertising online has no reason to be identical to television,” Greenfield said. “What you see now on these TV Everywhere experiences, whether it is the TNT app or the XFINITY app, all of them are replicating the advertising experience of television versus rethinking how would you trade your time — would I give you information or interact in some interesting way — beyond the traditional car driving around the mountain-30 second spot.”

[flv]http://www.phillipdampier.com/video/CNBC Ad Nauseum 7-9-14.mp4[/flv]

Richard Greenfield from BTIG Research appears on CNBC to expose just how bad cable’s TV Everywhere experience has become, mired in bad ads. (3:06)

For the benefit of those accustomed to content designed to appeal to the web’s short attention span and for those who loathe reading our usual epic-length articles, here’s a primer on Net Neutrality you can read without worrying there will be a test.

It’s one of the most important concepts of a free and open Internet, yet it has a name that evokes yawns from those who don’t understand it.

Thanks to Boing Boing for bringing it all together.

The same Audi ad shown 16 times during one Comcast TV Everywhere On-Demand show.

What would you think about the cable company that offered you on-demand viewing of your favorite shows interrupted repeatedly by the same commercial shown over and over? What would you think of the company whose product appeared 16 times in one hour, filibustering your viewing experience without any ability to fast forward.

Welcome to Comcast’s TV Everywhere, America’s most annoying on-demand video experience.

Rich Greenfield from BTIG Research, a Wall Street analyst firm, sat through a single Audi ad — during a pre-roll and then three times in a row during five commercial breaks, while watching FX’s Americans over Comcast’s TV Everywhere.

“You almost can’t make this up, it is such a horrible viewing experience,” Greenfield said. “I’m starting to hate Audi at this point.”

Other cable companies like Time Warner also show ads during on-demand programming, but most can be fast-forwarded and a typical ad break consists of just one or two short commercials.

With Comcast, “you get the exact same Audi ad all three times during this commercial break as well as every other commercial break during this programming and we tried multiple different episodes. […] The only ad that was running incessantly was this Audi commercial to the point where I’d like to never see this advertisement again.”

With a viewing experience like this, Greenfield speculates the result will be to increasingly drive viewers to Netflix and Amazon Prime for commercial-free viewing instead of suffering through more than eight minutes of Audi advertising.

[flv]http://www.phillipdampier.com/video/BTIG The Ad Problems Within TV Everywhere 7-2-14.mp4[/flv]

BTIG Research’s Rich Greenfield shows off the endemic problems of Comcast’s TV Everywhere on-demand viewing: Advertising torture hell for customers. (4:08)