TV station owners, which initially lagged new-media rivals in aggressively targeting website, mobile and streaming-video ads, are starting to become more competitive, said analysts and executives in interviews this week and last. An aspect of Media General’s agreement Friday to buy LIN Media for about $2.6 billion (CD March 24 p6) is online ads, said the companies and experts. LIN has by far the most online ad sales of any pure-play U.S. TV broadcaster, with revenue there expected to rise 72 percent this year from last to $123 million, said analyst Edward Atorino of Benchmark. “That’s sort of the kicker in the deal.”
Media General’s approximately $2.6 billion deal to buy LIN Media will require divestitures of TV stations, probably in at least five markets, agreed an executive of the companies, foes of broadcaster mergers and acquisitions and investment professionals, in interviews Friday. That day, the companies surprised some M&A watchers by announcing (http://bit.ly/1r81RAt) a deal to create what they say would be the second-largest U.S. pure-play TV station owner (http://bit.ly/NAYAJS). Broadcaster stocks rose, including at one point LIN above the price Media General agreed to pay. Shares fell Monday when a Wall Street analyst downgraded them on concerns M&A would all but halt (CD March 18 p5) amid what’s seen as an FCC crackdown on TV station resource sharing deals.
CableLabs, the cable industry’s research and development body, has stepped up outreach to consumer electronics makers, interindustry standards bodies, small cable operators and other organizations that aren’t members, said the CEO and other stakeholders in interviews last week. The organization demonstrates that a lot of communications and Internet standards and technical work happens among those disagreeing on policies, said some stakeholders. Small cable operators disagree with some big ones on access to programming amid industry consolidation, as Comcast agreed last month to pay $45 billion for Time Warner Cable (CD Feb 14 p1), said American Cable Association CEO Matt Polka. And CE companies disagree with operators on video device interoperability rules (CD Feb 7 p3), said CEA Senior Vice President-Research and Standards Brian Markwalter.
FCC Chairman Tom Wheeler may have a slightly easier time thanks to the Justice Department in getting the agency’s two other Democrats to vote for a forthcoming order (CD Feb 12 p1) cracking down on TV station resource-sharing deals, said agency and industry officials in interviews Friday. Earlier that day, in a rare instance of the department’s substantively participating in FCC proceedings, Justice asked the FCC to attribute -- under ownership quota rules -- stations with which a broadcaster shares certain functions, such as in joint sales agreements (JSAs) and similar deals (CD Bulletin Feb 21).
Changes the EPA proposed for efficiency specifications that multichannel video programming distributors and others can follow -- to be certified as having energy efficient set-top boxes and related devices -- generally are favorable to MVPDs and makers of consumer electronics, said industry officials in interviews and written comments to EPA. NCTA, the two U.S. DBS companies and EchoStar sought some additional changes so newer types of equipment can be accommodated under Energy Star version 4.1. Energy efficiency advocates sought to make the spec more stringent than the agency proposed or industry seeks. That’s according to stakeholder comments they shared with us that were due Feb. 12 to EPA, which industry officials say will be released online on the agency’s website (http://1.usa.gov/1gNEg3a) in coming days.
Opposition is building among multichannel video programming distributors to high-technology companies’ renewed request for rules on video device interoperability. Verizon joined the American Cable Association and DirecTV in telling us it, like NCTA (CD Feb 7 p3), opposes recent moves by an alliance that has included heavyweight makers of consumer electronics and Internet companies for an FCC NPRM on the topic. Some told us they're skeptical FCC Chairman Tom Wheeler will want to engage in what’s sure to be a contentious proceeding, because of opposition from most MVPDs. They think the agency will continue holding off on moving beyond a previous notice of inquiry on requiring a universal way for CE devices purchased from companies other than MVPDs’ set-top boxes to connect to pay-TV content.
Don’t impose video device interoperability rules on cable operators, because they and other multichannel video programming distributors are providing increasing amounts of content from pay-TV networks and other sources over IP to devices bought from firms besides MVPDs, said NCTA. Criticizing a request last month for a rulemaking from high-technology companies and makers of consumer electronics that seek interoperability rules (CD Jan 21 p12), NCTA CEO Michael Powell wrote FCC Chairman Tom Wheeler, who used to run that group. In what some CE officials told us they see as a possibly defensive move, Powell cited the array of content at last month’s CES that’s available on many devices and not just set-top boxes that receive encrypted cable content. Powell’s predecessor Kyle McSlarrow, who later went to work for NCTA’s biggest member, Comcast, sent a similar letter to then-FCC Chairman Julius Genachowski after the 2011 CES (http://bit.ly/1eYX6zS) (CD Jan 28/11 p5).
The FCC in the next few months may look to require that Internet video clips be captioned, whether by a draft order requiring it or a rulemaking seeking comment on such a rule, said agency, industry and public-interest officials in interviews Wednesday. They said that’s even though all industry filings opposed new rules in initial comments that were due Monday (see separate report below in this issue) (http://bit.ly/N458Bf) on a Media Bureau public notice (http://bit.ly/MtDRaK) on whether to require such captioning (CD Feb 5 p10). Chairman Tom Wheeler has signaled he’s interested in acting on disabilities access issues, and ensuring short videos online have captions so they can be understood by the hearing impaired could be an issue drawing his attention, said stakeholders opposed to such a requirement, those favoring it and those without policy stances.
The FCC said e-readers need not include accessibility features for the disabled for advanced communications services (ACS) because the devices are primarily designed for reading text-based digital titles and not for ACS. Giving an OK to a waiver sought last year by Amazon, Kobo and Sony, the Consumer & Governmental Affairs Bureau granted an exemption from 21st Century Communications and Video Accessibility Act rules for a year, but not the indefinite period the companies sought (CD Oct 15 p5). That time frame comported with the fears of groups representing those with vision impairments, said one such advocate.
ISPs and websites working together to enhance quality of service (QoS) to broadband subscribers or site blackouts akin to TV station retransmission consent contract disputes are possibilities in the U.S., post-net neutrality court remand, said lawyers observing the industry Friday. There are some reasons to think ISPs such as cable operators and online video distributors won’t undermine each other, said Howard Homonoff, a former lawyer at NBC’s cable networks who now consults for media incumbents and new entrants, and Guggenheim Partners analyst Paul Gallant. The next few years will “see the market evolve around this” month’s remand by the U.S. Court of Appeals for the D.C. Circuit of the FCC 2010 net neutrality order (CD Jan 15 p1), “as opposed to an aggressive thrust of legislation or regulation coming out of the FCC,” said Homonoff responding to our question at a Technology Policy Institute panel (http://bit.ly/1mDoOpZ).