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4K Ultra HD Television Arrives Via Satellite; DISH Network Adding ‘4K Joey’ Set Top Box

4kjoey

That is DISH’s CEO banging the drum beside a panoply of kangaroos. (Image courtesy: Gizmodo)

The ultra high-definition, bandwidth chewing 4K television standard has arrived and like HDTV before it, the first place most Americans will get to sample the new standard is over satellite television.

DISH Network is planning to introduce HDMI/HDCP 4K television owners to its new 4K Joey this year — a souped-up set-top box that can handle the high demands of 4K video.

DISH is using a Broadcom dual-core chipset and 7448 ARM processor that can handle the next standard in high-definition viewing.

While DISH set-top boxes will be ready for 4K, many cable and DSL broadband networks in the United States will face difficulties handling the online video demands that 4K video will place on their networks. In tests, watching an average movie required a minimum of a maxed out 10Mbps broadband connection. Live programming, particularly sports, required considerably more broadband speed to keep up. Few DSL networks will be able to sustain more than a handful of customers attempting to stream 4K video before neighborhood nodes become overwhelmed. Even the DOCSIS cable broadband standard still relies on shared bandwidth, and a few video aficionados in the neighborhood could pose significant challenges and speed slowdowns for other customers in the area.

Besides satellite, only fiber optic broadband will be ready to handle the practical requirements of streaming 4K video without significant upgrades.

dish logoDISH’s plans to stream video content over the Internet could one day also include 4K programming, but viewers are likely to run smack into usage caps and usage billing that ISPs are using to deter online video from gutting cable television revenue as well as further monetizing already highly profitable broadband.

Downloading just three 4K movies consumed 90GB and took more than a day to download, even with Comcast’s 100Mbps broadband service. In usage-capped markets, fewer than a dozen 4K movies would eat your entire monthly allowance. Each additional movie would subject Comcast customers to overlimit fees averaging around $6 per title.

Although DISH will offer a set-top box to handle 4K viewing, content producers are still waiting to see whether the public embraces the next HD standard before investing heavily in programming delivered using the new standard. DISH would only promise content from “several providers” would be forthcoming by the time the 4K Joey is released during the second quarter.

GreatLand Connections Has Few Employees, No Building; Yet Wants to Serve 2.5 Million Subscribers

Phillip Dampier November 6, 2014 Comcast/Xfinity, Competition, Consumer News, Public Policy & Gov't Comments Off on GreatLand Connections Has Few Employees, No Building; Yet Wants to Serve 2.5 Million Subscribers

greatlandGreatLand Connections, a new cable company with no headquarters building and only a handful of employees, is seeking permission to serve 2.5 million ex-Comcast/Time Warner Cable customers while saddled with $7.8 billion in debt the day its opens for business.

The entity, now administered primarily by a small executive team, will trade on the NASDAQ exchange under the symbol ‘GLCI’ and would start operations in 2015. Tidbits about the planned cable operator were included in a regulatory filing with the Securities and Exchange Commission, primarily concerning how shareholders and executives will be handled if the merger is approved.

GreatLand Connections was created to appease the U.S. Justice Department and Federal Communications Commission that earlier expressed concern about any single cable operator exceeding 30 percent of the national cable television market. Spinning off 2.5 million customers in less desirable service areas keeps Comcast’s market share just under 30%, but the SEC filing reveals Comcast isn’t exactly kicking customers out in the cold and disinheriting them. Comcast shareholders will own and control 67% of GreatLand Connections. Comcast will also select six of the nine members of the Board of Directors at GreatLand, and the SEC filing includes an admission to shareholders that a conflict of interest could exist between certain executives and board members who have investments in both cable companies.

The new company’s large debt load — about five times the company’s estimated earnings before interest, depreciation, taxes, and certain other expenses, is designed to shield Comcast from having to pay taxes on the spinoff. GreatLand’s filing states the transfer deal and spin-up of its company will qualify as a tax-free reorganization transaction.

The initial debt load is considerably higher than what most other cable companies carry, which makes it likely subscribers will be asked to help pay it off in the form of higher rates for years to come.

Even without a single piece of office furniture in place, GreatLand could begin serving as one of the nation’s largest cable companies with an estimated value of $5.7 billion in less than a year.

(Clarification: This article was updated to reflect Comcast shareholders will own 67% of GreatLand after the transaction closes.)

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

Phillip Dampier September 30, 2014 Comcast/Xfinity, Consumer News, Online Video, Public Policy & Gov't Comments Off on 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, Data Caps 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.

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