Viacom is preparing to launch its own direct-to-consumer streaming service later this year that will include more than 10,000 hours of on-demand programming from Viacom’s extensive library of content going back several decades.

Bob Bakish told investors at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco last week that Viacom’s plans to launch a service at least as large as CBS’ All Access Pass began in 2016 when the company quietly started to pull back on licensing its content to third party streaming services to build an attractive menu of options for its own streaming service.

Viacom has extensive media and cable holdings, including Paramount Pictures and Paramount Television, which has been in the television show production business since 1967. Viacom’s cable networks are also household names, including BET, Comedy Central, Nickelodeon, MTV, and TV Land. The service is expected to contain a deep catalog of shows from these and other cable networks under the Viacom umbrella.

“It’s going to be significant, and it’s going to also be differentiated from what’s in the marketplace today,” said Viacom chief financial officer Wade Davis, adding that it was only possible because “we kind of built and husbanded [our] library to be able to use for our own strategic purposes.”

Analysts expect the service will include a mobile app and desktop viewing options and will be ad-supported. Similar services generally sell for around $5-6 a month, but Viacom has been purposely vague about the exact terms and pricing of the service.

The news did not seem to interest investors as much as recent developments about a possible merger between Viacom and CBS, which theoretically could mean a merger of the future Viacom streaming service into the CBS All Access Pass.

As Discovery Communications completes its $11.9 billion acquisition of Scripps Networks Interactive Inc., the newly supersized basic cable network powerhouse will lay the foundation to launch its own online video mini-bundle of all 18 Discovery and Scripps networks, along with on-demand options, for as little as $6 a month.

The new service, to be branded collectively as “Discovery” will include programming from:

Discovery

Discovery Channel, TLC, Animal Planet, Investigation Discovery, Oprah Winfrey Network, Velocity, Science, Discovery Family, American Heroes Channel, Destination America, Discovery Life, Discovery en Español (Spanish), and Discovery Familia (Spanish).

Scripps

Cooking Channel, DIY Network, Food Network, Great American Country, HGTV, and Travel Channel.

The package is being developed as a defensive move to fight the ongoing erosion of subscribers that are cord-cutting traditional cable television. Discovery has lost 5% of its viewers in the U.S. in the last quarter alone, because many customers are moving to on-demand services like Netflix combined with over-the-air stations.

The newly enlarged Discovery is now the largest provider of non-fiction basic cable programming in the country. A combination of instructional programming popular on Scripps’ networks is expected to fit well with the reality and documentary programming popular on most Discovery networks. Although frequently bundled with alternative cable television streaming services, those services typically lack a deep on-demand library of content.

In order to drive subscriptions, Discovery’s streaming service is expected to be budget priced and include a large library of on-demand content, possibly including programming from other networks not owned by Discovery down the road.

The combined company also hopes to leverage as much savings out of the merger as possible. That will likely mean extensive job cuts at both companies. Discovery and Scripps together have more than 11,000 employees, including 600 ad sales people working for Discovery and 500 ad sales people working for Scripps.

Discovery will shut down its headquarters in Silver Spring, Md., and open a new headquarters in New York for both Discovery and Scripps employees. But Discovery will maintain Scripps’ headquarters in Knoxville, Tenn., as an “operations headquarters” for back-office work.

The two companies also have a significant international presence with more than three billion viewers worldwide, but the company plans to downsize international studios and consolidate production facilities in the United States and Poland, where Scripps owns  TVN, a Polish broadcast television network that favors reality TV programming and is seen in 90% of the country.

At some point, some of the 18 networks may be consolidated. Discovery executives note it now has two channels devoted to food and cooking — Food Network and the Cooking Channel.

Discovery’s niche will continue to be non-fiction programming, even as much of the rest of the industry is rapidly moving towards scripted series. Discovery executives point out that an hour of a scripted TV series now costs an average of $5 million, while an hour of reality programming produced in-house costs about $400,000. Scripps’ networks have managed to produce their shows for even less, recorded in pre-constructed studios that do not require remote location filming.” As far as Discovery is concerned, sticking with nonfiction programming is the right choice.

“We look at that [scripted] side and we say, ‘Good luck with that,’” said Discovery CEO David M. Zaslav. “That’s not what we do. We don’t do red carpet.”

Discovery Communications and Scripps Networks promote their merger and their global networks in this company-produced spot. (2:47)

Fox Networks will cut advertising to just two minutes per hour by the year 2020, according to its ad sales chief.

The 42 minute TV “hour” — 42 minutes of content and up to 18 minutes of advertising — is going away as over-the-air broadcast and cable networks respond to declining audiences for ad-cluttered programming.

Fox Networks Group’s ad sales chief, Joe Marchese surprised an audience at a private industry event last week in Los Angeles. The TV advertising business is reportedly in crisis over the decreasing effectiveness of television advertising, as viewers develop “ad blindness” skills or pre-record their favorite shows primarily to fast-forward past the commercials. But the biggest threat of all has proven to be cable cord-cutting and a major viewing shift to on-demand, ad-free streaming content by viewers willing to pay a few dollars more just to avoid the commercials.

Advertising time has already begun to decline from its peak of 18 minutes per hour. In 2017, some networks cut ad time to 13:30 an hour, although cable networks still pack in an average of 16 minutes of ads per hour.

“The two minutes per hour is a real target for Fox, and also our challenge for the industry,” said Ed Davis, chief product officer for ad sales at Fox Networks Group, in an email. “Creating a sustainable model for ad-supported storytelling will require us all to move.”

Marchese did not specify whether the two-minute ad window also included local, affiliate-sold ad inventory. Networks split advertising time with their affiliates, allowing local stations to sell several minutes of advertising in-between network-sold ads. If total advertising time is reduced to just two minutes per hour, networks will have to charge exponentially more for those coveted ad slots to recoup revenue, or raise retransmission consent fees charged to cable and satellite operators, which promptly pass those costs on to subscribers, often as a Broadcast TV surcharge.

The country’s largest cable internet service provider needed help from an app developer in Portland, Ore. to let it know its broadband pipes were full and to do something about it.

Comcast customers were complaining about slow downloads from the Panic website and the company’s own workers were saying largely the same thing when attempting to remotely connect to the company’s servers from home.

Because Panic’s web servers have just a single connection to the internet via Cogent, it would be a simple matter to track down where the traffic bottleneck was occurring, assuming there was one. The company asked for volunteers to run a test transferring 20MB of data first from Panic’s server and then again from a control server hosted with Linode, a popular and well-respected hosting company.

The results were pretty stunning.

With speeds often around only 356.3kbps for Comcast customers connecting to Panic, something was definitely up. It also explained why employees had a rough time connecting to the company’s server as well — Panic’s workers are based in Portland, Ore., where Comcast is used by almost every employee.

The slowdowns were not related to the time of day and because the problem persisted for weeks, it wasn’t a temporary technical fault. Panic’s blog picks up the story about what is behind all this:

Peering.

Major internet pipes, like Cogent, have peering agreements with network providers, like Comcast. These companies need each other — Cogent can’t exist if their network doesn’t go all the way to the end user, and Comcast can’t exist if they can’t send their customer’s data all over the world. One core tenet of peering is that it is “settlement-free” — neither party pays the other party to exchange their traffic. Instead, each party generates revenue from their customers. Cogent generates revenue from us. Comcast generates revenue from us at home. Everyone wins, right?

After a quick Google session, I learned that Cogent and Comcast have quite a storied history. This history started when Cogent started delivering a great deal of video content to Comcast customers… content from Netflix. and suddenly, the “peering pipe” that connects Cogent and Comcast filled up and slowed dramatically down.

Normally when these peering pipes “fill up”, more capacity is added between the two companies. But, if you believe Cogent’s side of the story, Comcast simply decided not to play ball — and refused to add any additional bandwidth unless Cogent paid them. In other words, Comcast didn’t like being paid nothing to deliver Netflix traffic, which competes with its own TV and streaming offerings. This Ars Technica article covers it well. (How did Netflix solve this problem in 2014? Netflix entered into a business agreement to pay Comcast directly. And suddenly, more peering bandwidth opened up between Comcast and Cogent, like magic.)

We felt certain history was repeating itself: the peering connection between Comcast and Cogent was once again saturated. Cogent said their hands were tied. What now?

In addition to giving the internet public policy community new evidence that peering fights leaving customers stuck in the middle might be heating up once again. It also suggests if Comcast was unaware of the problem, it does not reflect well on the cable company to wait weeks until a customer reports such a serious slowdown before fixing it.

The folks at Panic took a chance and reported the problem to Comcast, bypassing the usual customer support route in favor of a corporate contact who listed a direct email address on the company’s website. Comcast took the request seriously and eventually responded, “give us one to two weeks, and if you re-run your test I think you’ll be happy with the results.”

Indeed, the problem was fixed. The folks at Panic say according to Comcast, two primary changes were made:

1. Comcast added more capacity for Cogent traffic. (As suspected, the pipe was full.)
2. Cogent made some unspecified changes to their traffic engineering.

The folks at Panic and their users are happy that the problem is fixed, but some questions remain:

1. Is Comcast intentionally throttling web traffic in an attempt to extract a more favorable peering agreement with Cogent?
2. How could Comcast not know this particular connection was hopelessly over-capacity for several weeks, leaving customers to deal with heavily throttled traffic.

“While this story amazingly had a happy ending, I’m not looking forward to the next time we’re stuck in the middle of a peering dispute between two companies,” wrote Cabel. “It feels absolutely inevitable, all the more so now that net neutrality is gone. Here’s hoping the next time it happens, the responsible party is as responsive as Comcast was this time.”

Panic explains internet slowdowns resulting from peering disputes in this (3:30) video.

Cheyenne Mayor Marion Orr

An effort to pass legislation that would award state grants to help rural Wyoming communities get high-speed internet was dead on arrival as far as telecom industry lobbyists were concerned.

So they “fixed it” with a secret substitute bill quietly written by the state’s telecom companies.

The replacement legislation effectively turns the state grant program into a fund for the state’s dominant telecom companies — CenturyLink and Charter Communications.

Stop the Cap! has learned the replacement bill gives high priority to eliminating potential competition by blocking funding for communities to establish their own public broadband alternatives to the phone and cable company if those companies already offer service anywhere inside the community.

The bill also seeks to define the Wyoming government’s involvement in broadband as a non-adversarial partnership with the telecom industry, according to Wyoming Senate Minority Leader Chris Rothfuss (D-District 9).

Under the substitute bill, Rothfuss said the telecom industry will now have a say over how the state awards grant funds. The industry is concerned tax dollars could be given to their competitors to offer service in communities where CenturyLink and Charter already provide modest service. But nothing in the bill would keep either company from collecting state funds for themselves, to expand broadband into unserved areas.

The attempt to switch the bills during a state senate committee meeting was met with surprise and outrage by Cheyenne Mayor Marion Orr.

“I shouldn’t have been surprised to learn industry completely re-wrote proposed broadband legislation to their favor as a ‘substitute bill’ in legislative committee today,” Orr wrote on her Facebook page on Feb. 19. “The substitute bill is substantially different than the original bill. And it wasn’t posted online or anywhere for anyone except insiders to have access to. CenturyLink and Spectrum are bullies. It’s wrong, and they are hurting Cheyenne and other Wyoming communities from gaining affordable access.”

The committee working on the bill may have hoped to switch the bills without notice, but Orr was having none of that.

“As soon as I realized the committee was working a different version that none of us had access to – I spoke up,” she said. “The committee set it aside and will hear it again tomorrow night. This is NOT good governance and the committee realized it. I will stay on this. Guaranteed.”

The substitute bill appears to have subsequently passed and is still facing review by the state legislature.

Orr remains furious Wyoming’s telecom companies that have not delivered on ubiquitous, affordable broadband will now have more power than ever to determine who gets service, who pays to extend service, and what companies can provide it.

“It’s as important as turning on electricity, it’s as important as turning on a tap and having water, it’s an absolute must if we’re going to grow,” Orr said.