Oprah, Currency Rates Pressure Discovery

Oprah, Currency Rates Pressure Discovery

Discovery Communications stock was down more than 5% Thursday after the programmer reported mixed fourth quarter earnings and said TV icon Oprah Winfrey could exercise put options that would require the company to purchase some of her interest in the OWN channel.

Discovery shares were down as much as 9% ($2.38 each) to $24.33 per share Thursday after the company said total revenue was down 2% to $1.6 billion, adjusted OIBDA fell 10% to $574 million and net income dipped 16% to $219 million as foreign currency rates pressured results. The stock was trading at $25.88 each in afternoon trading Thursday, down 3.1% (83 cents each).

The company said that excluding foreign currency fluctuations and the impact of its acquisition of Eurosport and the sale of SBS Radio, revenue and cash flow would have increased in the period.

Discovery also noted that TV icon Oprah Winfrey, who controls 50% of OWN: The Oprah Winfrey Network, now can require Discovery to purchase a portion of her interest in the channel. On a conference call with analysts, Discovery CEO David Zaslav said the company would welcome the opportunity to increase its stake in OWN.

Zaslav said that if Winfrey decides to exercise that put option, it would be beneficial for Discovery.

“We think it has a great niche and some very strong IP,” Zaslav said. “And over time, as our interest grows, if we have an opportunity to consolidate it, that would be very favorable for us. But in the meantime, it’s a 50/50 venture with Oprah having rights to put interest to us over time beginning this year, and she is very happy with the venture and it’s quite a success story.”

Winfrey’s investment company Harpo, Inc., has the right to require Discovery to purchase Harpo’s interest in OWN every 2 1/2 years beginning Jan 1, 2016. According to the agreement, if Harpo decides to exercise the option, Discovery would have to purchase the interest at fair market value up to a maximum put amount that ranges from $100 million on the first put exercise to $400 million on the fourth put exercise date.

Discovery has done several recent deals to make its content available on TV Everywhere platforms. Zaslav also threw some cold water on claims that skinny bundles are putting pressure on content providers, adding that the vast majority of TV viewers still opt for more robust programming packages.

“With all the talk of the skinny bundle and as appealing as it seems, most consumers seem to want the big bundle,” Zaslav said.

Skipper: ESPN Mulling Its Streaming Options

Skipper: ESPN Mulling Its Streaming Options

ESPN is in talks with Dish Network and other distributors about joining slimmed-down pay TV bundles, including some that are delivered over-the-top, ESPN president John Skipper said Wednesday at Re/code’s annual Code/Mediaconference in Dana Point, Calif.

ESPN is already being distributed by Sling TV, Dish Network’s OTT-TV service for cord-cutters, and is apparently looking to broaden its opportunities as it seeks new ways to be part of slimmed-down programming packages. Those discussions could lead to more digital distribution opportunities for ESPN. .

“A number of people have expressed interest and we’re in discussions with a large number of people,” Skipper said. “I think other people will enter into some markets with lighter packages in this calendar year,” he added, but didn’t elaborate on who those new, potential partners are.

Among the possibilities, Apple’s been pursuing deals for a national OTT TV service focused on skinny packages that include the major broadcast TV networks but that service has reportedly been bogged down in carriage talks. Amazon, meanwhile, has shown interest in becoming a virtual MVPD, and now sells standalone access to Showtime and Starz and other services to Prime members via its new Streaming Partners Program.

As for Sling TV, that service “has brought in new people to the pay TV universe…and ESPN is a driver of that package,” Skipper said. “We plan to discuss bringing in new packages with other providers.”

Skipper also reiterated that ESPN still has no interest in being sold on a standalone basis – something that HBO and Showtime are now doing on the premium end of the pay TV market – but would rather continue to be included in bundles that include other Disney-owned channels.

“We can sell ESPN as a standalone product, but we do not believe it right now to be good business,” Skipper said. “There are lots of people who want ESPN, and it’s our task to figure out how to get packages to ESPN that work for them.”

Fandango Buys Flixster, Rotten Tomatoes

Fandango Buys Flixster, Rotten Tomatoes

Fandango, the movie ticket buying service that’s part of NBCUniversal, dipped into the M&A poll again and, this time, pulled out Flixster and Rotten Tomatoes.

Flixster operates a web site and mobile app for discovering movies, and claims to have more than 50 million app installs. Rotten Tomatoes, a service that collects and aggregates audience and critic ratings and reviews for movies and TV shows, will be extending its ticketing capabilities to the Flixster app in the coming months. Notably, NBCU corporate cousin Comcast has integrated Rotten Tomatoes rankings with its X1 platform.

Flixster and Rotten Tomatoes, which reach 20 million unique visitors per month, will remain consumer-facing brands, Fandango said.

Fandango, which is acquiring those properties from Warner Bros. Entertainment, announced the deals less than a month after locking up M-GO, the movie and TV electronic sell-through/rental multiscreen service that was a J.V. of Technicolor and DreamWorks Animation. Fandango said M-GO will be rebranded later this year and become part of Fandango’s digital network.

As a result of the deals for Flixster and Rotten Tomatoes, Warner Bros Entertainment will take a minority equity stake in Fandango and become a strategic partner.

Fandango, which will continue to operate as a unit of NBCU, said its recent string of deals will enable it to expand its core theatrical ticketing business and “create the industry’s premier digital network for all things movies.”

“Flixster and Rotten Tomatoes are invaluable resources for movie fans, and we look forward to growing these successful properties, driving more theatrical ticketing and super-serving consumers with all their movie needs,” Fandango president Paul Yanover said in a statement. “Our new expanded network will offer unparalleled capabilities for all of our exhibition, studio and promotional partners to reach a massive entertainment audience with innovative marketing and ticketing solutions that benefit from original content, home entertainment products, ‘super tickets’, gifts with purchase, and other new promotional opportunities.”

“Combining the expertise and assets of Fandango, Flixster and Rotten Tomatoes will create an incredible resource for consumers to fulfill all their moviegoing needs,” added Thomas Gewecke, chief digital officer and EVP, strategy and business development at Warner Bros. “Bringing these properties together into a single, integrated portfolio creates an opportunity to truly accelerate innovation in movie discovery and ticketing, making moviegoing an even more compelling experience.”

Evolution: STB Rules Could Incur ‘Massive Costs’ for Small Ops

Evolution: STB Rules Could Incur ‘Massive Costs’ for Small Ops

Get complete coverage of the FCC’s set-top proposal.

Evolution Digital, a supplier that works with a wide range of independent MSOs, said it looks forward to hearing more following the FCC’s vote to approve chairman Tom Wheeler’s proposal for “unlocking” the cable set top, but that the company still has reservations about the potential economic impact it could have on tier 2 and tier 3 MVPDs.

“Evolution Digital looks forward to Chairman Wheeler’s presentation tomorrow regarding the FCC’s set top box proposal,” Brent Smith, president and CTO of Evolution Digital, said in a statement. “ However, the information that we have to date from Chairman Wheeler gives us pause, due to the implications to both small cable providers and their customers if this proposal applies to all MVPDs.”

Though Wheeler has said the proposal does not employ the “AllVid” concept, which would involve the use of a separate device, Evolution sees two options for smaller cable operators to comply with the rules. They would need to either:

1.Completely simulcast their current linear cable service in IP, in order to support a common interface for third party devices.

2. Add an additional device in the home (CPE) to enable the conversion of their proprietary QAM video content, into a “common” IP video stream that could interface with a third party device.

Either option, Evolution Digital argued, would “incur massive costs for Tier 2 and Tier 3 cable operators” and result in price hikes – things that would run counter to the aims of the initiative.

Smaller MVPDs, the company noted, are looking to migrate gracefully to IP video, but the urgency of the rules would be “too great of a burden for small cable operators,” forcing them to rapidly “switch to all-IP in a timeline that is unfeasible with current resources and technological capabilities.”

“It is our hope that the FCC and Chairman Wheeler are exploring these issues with great concern,” said Smith, who was a member of the FCC-appointed Downloadable Security Technology Advisory Committee (DSTAC) formed last year.

Set-top Proposal Worries Some House Judiciary Members

Set-top Proposal Worries Some House Judiciary Members

A bipartisan quintet of House Judiciary Committee members wants FCC chairman Tom Wheeler and the other commissioners to answer some questions about the chairman’s set-top box proposal before voting on it, adding to the growing number of legislators expressing concerns about the impact of the proposal on contractual relationships.

The letter was dated Feb. 16 and the vote is planned for Feb. 18.

They said they wrote to express their concerns with the proposal, particularly its impact on independent programmers.

“Regulation in this space has the potential to upend ties between creators, channel providers, and cable companies–and jeopardize the rights of creators to negotiate directly with those selling their work to consumers….

“We are concerned…that the Commissioner’s new proposal could undermine this creative ecosystem by enabling companies to make money distributing content without negotiating with creators – an approach that conflicts with the copyright law established by Congress…. Regulation in this space has the potential to drastically weaken the economics of the legitimate businesses that have fueled so much of the innovation and consumer choice that has taken place during the last decade.

That is one of the points that cable operators and others in the Future of Television Coalition have made in criticizing the proposal to “unlock” set-top content and data and make it available for repackaging with online content by third party navigation devices.

The questions they want answered included how the FCC will make sure unlicensed copies creative works are not “promoted to viewers, how it can guard against malware and cybersecurity risks on new devices, how it will insure that independent/minority programmers are not adversely impacted, how the FCC will insure third parties “negotiate directly with content creators before they use the content for their own commercial purposes,” and whether third parties will share fees for their new services with content creators, for example, how ads they might sell “around” the cable content “flow back to rightsholders and the royalty-, pension-, and benefit plans of the film and television workforce.”

For its part, the Writers Guild of America West, which represents some of those content creators, supports the proposal and argues it will be a boon to independent programmers.

Signing on to the letter were Reps. Doug Collins (R-Ga.), Judy Chu (D-Calif.), Lamar Smith (R-Tex.), Adam Schiff (D-Calif.), and Mimi Waters (R-Calif.).

An FCC spokesperson was not immediately available for comment.

PlayStation VR Could Arrive This Fall

PlayStation VR Could Arrive This FallSony PlayStation VR headset

RELATED: ‘Virtual Reality — Ready for a Closeup’ Webinar, Feb. 24, with Andrew Trickett (Merge VR) and Tony Mugavero (Littlstar), moderated by Next TV editor Jeff Baumgartner

Sony hasn’t announced a 2016 launch date for the PlayStation VR, the virtual reality headset that will pair up with the PS4 console, but GameStop CEO Paul Raines said he’s preparing for a fall debut.

“It’s a big launch. We’re getting ready for it,” Raines said in a TV interview with Fox Business Network’s Maria Bartiromo. “We will launch the Sony product this fall.”

He said GameStop is also in retail distribution talks with Oculus, the Facebook-owned VR specialist, as well as with HTC, maker of the Vive VR platform.

Oculus started taking preorders for the Oculus Rift last month ahead of shipments that will begin this spring, and yesterday started to take preorders for Oculus Rift-PC bundles that start at $1,499. Preorders for the HTC Vive are expected to open on February 29.

Google, maker of the entry-level Cardboard VR viewer, is reportedly developing a new VR headset that will rival the Samsung Gear VR and require the user to pair the device with a smartphone, and is said to be working on a more advanced self-contained VR headset.

Raines said it’s hard to measure the VR market right now, but is bullish about it because current forecasts “all start with a ‘B’.” He referenced a Goldman Sachs forecast that sees the VR market eclipsing that of TV by 2025.

You can view the Raines interview below:

TiVo Tacks On HBO Go, Toon Goggles

TiVo Tacks On HBO Go, Toon Goggles

TiVo announced that it is offering HBO Go, the premium programmer’s TV Everywhere app, and the kids-focused Toon Goggles VOD service via the new TiVo Bolt as well as its Roamio and Premiere retail product line.

ZatzNotFunny reported in December that HBO Go was coming to the TiVo platform. HBO Go will be available to TiVo users who are also HBO subscribers who get pay TV service from MVPD that authenticate on that platform.

HBO Go will also be appearing on specific MSO-supplied TiVo boxes. HBO Go was referenced in TiVo’s new deal with Buckeye CableSystem. It’s not clear yet when the app will be offered to other TiVo U.S. MVPD partners, which include GCI, RCN, Grande Communications, Suddenlink Communications and Mediacom Communications, among others.

TiVo is also extending its SkipMode feature to its entire Roamio family starting Thursday (February 18), and expects to complete that rollout by February 26.

SkipMode, a controversial feature initially offered on TiVo’s new 4K-capable Bolt device and on Roamio DVRs deployed in Chicago and San Francisco, lets users skip commercial breaks in recorded shows with the click of a button. Early on, that capability is being supported on about two dozen channels, including the Big 4 broadcasters, for shows (except for local content and sporting events) that run each day between 4 p.m. and midnight. SkipMode can also work on TiVo Mini boxes that are connected to a Bolt or Roamio.