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m : 24 February 2012 • 4:03PM -0500

Eyeing the Antennae - DISH, STARZ/ENCORE All Gain Subs - Verizon's 'Evil Genius'
by The Morning BRIDGE


<title>The Morning BRIDGE 02/24/2012 - Eyeing the Antennae - DISH, STARZ/ENCORE All Gain Subs - Verizon's 'Evil Genius'</title>
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<tr><td colspan="2" class="article_heading" >Headlines for Friday, February 24, 2012:</td></tr>

<tr><td width="10" class="article_nav" > </td><td class="article_nav" ><a href="#article4" class="article_nav" >SkyBOX:  Eyeing the Antennae</a></td></tr>

<tr><td width="10" class="article_nav" > </td><td class="article_nav" ><a href="#article5" class="article_nav" >DISH, STARZ/ENCORE All Gain Subs</a></td></tr>

<tr><td width="10" class="article_nav" > </td><td class="article_nav" ><a href="#article6" class="article_nav" >Etc.: Network 2011-12 Ad Haul - Verizon's 'Evil Genius' – SBCA Battles Taxes</a></td></tr>


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<td class="article_title" >SkyBOX:  Eyeing the Antennae</td>
<tr><td class="article" >by Evie Haskell <a href="mailto:evie@medi..." class="article_nav" >evie@medi...</a></td></tr>

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<td><div class="article" ><br>"It's cool to have rabbit ears again," said the <a href=""><span style="font-weight: bold; font-style: italic;">Wall Street Journal</span></a>.  In a paean to TV-how-it-used-to-be, the <span
style="font-style: italic;">Murdoch</span> crown jewel looked at figures provided by OTA retailer <span style="font-weight: bold;">Antennas Direct</span> and declared a veritable revival of over-the-air reception.  Customers, said the WSJ, are more and more flocking to free broadcast (coupled,
of course, with the likes of <span style="font-weight: bold;">Netflix</span> and <span style="font-weight: bold;">Hulu</span>).<br><br>The media-rati promptly took off on a binge of "broadcast days are back again."  Reading some reports, you might even think that the time has come for
traditional pay TV providers to eye their hara-kari options.  <br><br>But really? Rabbit ears?<br><br>We checked with the folks who track all things consumer electronic (the <span style="font-weight: bold;">Consumer Electronics Association</span>) and the word on an OTA revival is ... not so
much.<br><br>"A lot's been written about cord cutting," noted CEA analyst <span style="font-style: italic;">Shawn DuBravac</span>, "but the numbers aren't that substantial."<br><br><div><img src="" alt="" align="right" border="" hspace="20"
vspace=""></div>This is not to say that sales of over-the-air antennas (which these days look more like harmonic descendants of the Twilight Zone than rabbit ears) have been lagging.  According to the CEA, shipments of OTA antennas to dealers have gained by around 25% from 4.7M in 2009 to 5.9M
projected for this year.  Shipments of internet connectable TVs, however, have soared from around 3M shipped in 2009 to 9M projected for this year.  <br><br>Of course not all internet connectable TVs are actually connected whereas antennas shipped (and, presumably, sold) almost certainly
are.  Chalk that up as a point in favor of the rabbit ear revival.  In addition, as DuBravac quite reasonably points out, the question of whether TV via a combination of internet and OTA antennas will accelerate "is a big issue."  (And a complicated one as witness the
antenna-connection boasted by the likes of <span style="font-weight: bold;">Aereo</span>.)  <br><br>But an OTA onslaught?  <br><br>As we said, not so much.  At least not yet.  Besides, the basic subscriber erosion from MVPDs is clearly slowing, not accelerating.• <P>
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<div class="article_title" >DISH, STARZ/ENCORE All Gain Subs</div>

<div class="article" ><br>Another round of quarterly reports were released today.  Here's the latest:<br><br>• <span style="font-weight: bold;">DISH </span>reported positive Q4 results with a sub gain of 22K and a 13% y/y increase in total revenue of $3.63B. The company nabbed 39% of category gross adds v. 36.9% a
year ago, and as the satcaster continues to focus on retention rather than growth, quarterly churn strengthen to 1.55%. <span style="font-weight: bold;">Bernstein Research</span>'s <span style="font-style: italic;">Craig Moffett</span> said the market share pendulum has swung back towards balance
between DISH and <span style="font-weight: bold;">DIRECTV</span>, possibly reflecting a satellite industry that has reached its prime. "This is either the end of the growth phase (glass half full) or the beginning of the decline phase (glass half empty)," the analyst quipped. "The satellite
operators are faced with the unappetizing choice of accepting the declining video margins of the cable TV operators, but without cable's higher margin broadband offset, or, alternatively, of holding the line on margins by raising prices and in the process becoming less and less competitive." CEO
<span style="font-style: italic;">Joe Clayton</span> told investors the Blockbuster brand is helping to curb sub losses... but Moffett called the former-DVD retailer "little more than a sideshow."<br><br>• <span style="font-weight: bold;">EchoStar</span> reported total revenue of $834M for its Q1
(ending Dec. 31, 2011), an impressive 62% y/y increase. Revs hit $2.76B for FY11, a 17.5% increase from FY10. During its quarterly conference call Thursday, General Counsel <span style="font-style: italic;">Dean Manson</span> said the company is on track for its planned launch of EchoStar 17 this
summer. He said the satellite will deliver <span style="font-weight: bold;">HughesNet</span> G4 broadband internet service and allow the company to expand its consumer satellite business. Manson also said the DBS-specific satellite EchoStar 16 is under construction and should launch sometime in late
2012.<span style="font-weight: bold;"><br><br>• Liberty Global </span>posted a Q411   net loss of $435M, compared to net earnings of $57.5M in Q410. The   company reported a y/y revenue gain of $2.4B during the period. Germany   is now the company's largest single market (after acquiring <span
style="font-weight: bold;">KBW</span> last last year), and ended Q4 with ~4.77M analog/~2M digital TV subs.  <span style="font-weight: bold;"><br><br>• Liberty Media</span>'s <span style="font-weight: bold;">STARZ</span> and <span style="font-weight: bold;">ENCORE</span>   services saw 4Q11
subscriptions grow by 8% and 1% respectively y/y.   Revenue increased by 96% to $1B while Q311 revenues were up 48% to $3B. <br><br>• <span style="font-weight: bold;">Liberty Interactive</span>'s Q4 results saw revenues up by 7% to $3.1B and annual revenues up 8% to $9.6B. Liberty also announced
that Liberty Interactive (as asset-backed security) will be split into two pieces: Interactive (QVC, e-commerce, 34% stake in HSNI and $500M cash) and Ventures ($1.25B in cash, passive equity stakes other than HSNI and exchangeable debentures).<br><br>• <span style="font-weight: bold;">Kudelski
</span>reported   a FY11 operating income loss of €83.2M ($111M) in its digital TV   business, with net income down €14.7M  ($19.6M) to €40.6M ($54.27M). On   the positive side, <span style="font-weight: bold;">Nagra</span> continued its success in IP-video with DISH/EchoStar, <span
style="font-weight: bold;">Canal+</span>, <span style="font-weight: bold;">PrisaTV</span> and others. •<br> <P>

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<div class="article_title" >Etc.: Network 2011-12 Ad Haul - Verizon's 'Evil Genius' – SBCA Battles Taxes</div>

<div class="article" ><br><span style="font-weight: bold; text-decoration: underline;">Advertising</span>: Courtesy of <span style="font-style: italic;">AdWeek</span>, here's a round-up of several networks' upfront ad haul (and links to details): <span style="font-weight: bold;">The CW</span> finished its upfront take
with between $400M-$420M selling somewhere between 75% and 80% of available inventory. <a href="">Read more</a>. <span style="font-weight: bold;">NBC</span> is writing deals "at significant premiums" from last year,
with 9% CPM increases for its 2011-12 sched. "Further along in its deal making is <span style="font-weight: bold;">ABC</span>, which has been cutting premiums at around 10 percent." Details <a href="">on both, here</a>. The
pub says <span style="font-weight: bold;">CBS</span> has "resumed its pas de deux" with buyers as the broadcaster started selling its ad inventory at a "healthy" 14% premium over last year's rates. <span style="font-weight: bold;">Fox</span> is dealing on <a
href="">11% increases</a> on as much as 80% of its inventory. "Fox plays their game, <a href="">we play ours</a>..." says CBS' <span
style="font-style: italic;">Les Moonves</span>. And, to top it off, here's the <span style="font-style: italic;">WSJ</span> piece that says "advertisers are taking solace in the <a href="">glow of a
television</a>."<br><br><span style="font-weight: bold; text-decoration: underline;">Rules & Regs</span>: With the passage of payroll tax cut extension, <span style="font-style: italic;">Bloomberg</span> says the broadcast industry "emerged relatively unscathed from one of its biggest political
and policy battles in years." Quoting one lobbyist, broadcasters "<a href="">got nearly everything</a>" they wanted. --- <span style="font-weight: bold;">NCTA</span> President & CEO <span style="font-style: italic;">Michael Powell</span>
said the organization supports <span style="font-style: italic;">President Obama</span>'s "Consumer Privacy Bill of Rights." He said cable operators and programmers have long been leaders in protecting customers' privacy and is ready to work with the gov't on the plan.<span style="font-weight:
bold;"> Verizon</span> issued a statement of support for the proposal, as did Senate Commerce Committee Chair Sen. <span style="font-style: italic;">John Rockefeller</span> (D- W.VA).<br><br><span style="font-weight: bold; text-decoration: underline;">Op/Ed</span>: Calling <span style="font-weight:
bold;">Verizon</span> an "evil genius," <span style="font-style: italic;">GigaOm</span>'s <span style="font-style: italic;">Stacey Higginbotham</span> says there's a "dirty secret" inside the company's spectrum deal with cable. "If I were <span style="font-weight: bold;">Boxee</span>, <span
style="font-weight: bold;">Roku</span>, <span style="font-weight: bold;">Amazon</span>, <span style="font-weight: bold;">Google</span>, <span style="font-weight: bold;">Apple</span> or other names in the connected home and content environment, I'd start pressing the <span style="font-weight:
bold;">FCC</span>, <span style="font-weight: bold;">DoJ</span> and the participants themselves for answers..." <a href="">Read more</a>. --- Here's another eye opener: <span style="font-weight: bold;">NFL</span> Hall of
Fame QB <span style="font-style: italic;">Troy Aikman</span> says the National Football League might not be the number one sport in the U.S. in 10 to 20 years. Why? He says he was "OK" not getting the Thursday night game via<span style="font-weight: bold;"> NFL Network</span>... and "that's no
good." <a href="">Read more</a>. <br><br><span style="font-weight: bold; text-decoration: underline;">Battleground</span>:  The <span style="font-weight: bold;">Satellite Broadcasting & Communications
Association</span>   (SBCA) says it is "vigorously fighting an unfair" proposal in Utah that   would provide an additional tax break for cable customers but not   subscribers of satellite. At issue is a bill that would require   satellite subs to pay a 6.25% state excise tax on their monthly service
bills.  The group says current tax law in Utah keeps satellite TV   customers from benefiting from a 50% franchise fee exemption that   subscribers to cable TV receive. If the legislation should pass, the   SBCA says cable subs would pay only a 1.25% tax on their bills.<br><br><span
style="font-weight: bold; text-decoration: underline;">Strategy</span>: <span style="font-weight: bold;">AT&T</span> says it's working on a home automation platform for service providers called Digital Life. <br><br><span style="font-weight: bold; text-decoration: underline;">Deals</span>:
Set-top maker <span style="font-weight: bold;">Pace</span> announced a global partnership with <span style="font-weight: bold;">TiVo </span>Thursday to license TiVo hardware in Pace STBs. The announcement comes on the heals of TiVo's recent agreement with <span style="font-weight:
bold;">Samsung</span>. Financial terms were unavailable. <br><br><span style="font-weight: bold; text-decoration: underline;">Research</span>: According to <span style="font-weight: bold;">Bytemobile</span>, video now drives the majority of bandwidth consumption. The research firm says video traffic
represents between 50%-70% of all traffic on networks. <a href="">Read more</a>. --- According to <span style="font-weight: bold;">craigconnects</span>, the research arm of <span style="font-weight: bold;">craigslist</span>, there is a
"dramatic lack of trust Americans hold for sources of election news." The group says of six media explored (cable, broadcast, newspapers, radio, internet and social media), traditional news outlets scored highest in "perceived credibility" but less than 25% of the population describe "any" source of
election coverage as "very credible." Check out <a href="">the infographic</a>. --- Even as more Americans download and stream movies online, <span style="font-style: italic;">Adweek</span> says the theater experience is more popular than ever. Another cool <a
href="">infographic, here</a>. <br><br><span style="font-weight: bold; text-decoration: underline;">Programming</span>: <span style="font-weight: bold;">MGM</span> is launching a 24-hr. Spanish-language network called <span
style="font-weight: bold;">Canal Ella</span>. The net will be available on <span style="font-weight: bold;">Cablevision</span> and some <span style="font-weight: bold;">Comcast</span> systems, along with<span style="font-weight: bold;"> Liberty Cablevision</span>, <span style="font-weight:
bold;">Choice Cable TV</span> and <span style="font-weight: bold;">Claro TV</span> in Puerto Rico.<br><br><span style="font-weight: bold; text-decoration: underline;">Mobile</span>: California Attorney General <span style="font-style: italic;">Kamal Harris</span> said <span style="font-weight:
bold;">Apple</span>, <span style="font-weight: bold;">Google</span>, <span style="font-weight: bold;">Microsoft</span>, <span style="font-weight: bold;">Amazon</span>, <span style="font-weight: bold;">HP</span>, and <span style="font-weight: bold;">Research In Motion</span> have agreed to require
mobile app developers to include privacy policies about data collection. <a href="">Read more</a>. --- <span style="font-weight: bold;">T-Mobile</span> revealed Thursday that it lost
a net 526K subs during its Q4, a number observers say shows the company is losing contract-based customers faster than telcos are losing land-line customers. Despite the numbers, CEO <span style="font-style: italic;">Philipp Humm</span> says the carrier is moving ahead with its planned 4G LTE build
out that should be ready sometime 2013. Reports say T-Mobile will invest $4B on the network upgrade, funded largely by the $3B break-up fee <span style="font-weight: bold;">AT&T</span> paid after its failed takeover. --- In related news, <span style="font-weight: bold;">Kineto Wireless</span>
expanded its VoIP partnership with T-Mobile by introducing a smart VoIP app, which will compete with <span style="font-weight: bold;">Skype</span> and Google Voice, allowing users to make calls over WiFi on Android, iOS and Windows devices.<br><br><span style="font-weight: bold; text-decoration:
underline;">Tech</span>: <span style="font-weight: bold;">Google</span> says its going to start making "heads-up" glasses that stream video and data in real time straight to the user's eye-wear. <span style="font-style: italic;">Talk about hands-free</span>. <span style="font-style:
italic;">NYT</span> <a href="">has details</a>. <br><br><span style="font-weight: bold; text-decoration: underline;">People</span>: <span style="font-style: italic;">Via Satellite</span> named <span
style="font-weight: bold;">Iridium</span> CEO <span style="font-weight: bold;">Matt Desch</span> as the 2011 Satellite Executive of the Year. <br><br><span style="font-weight: bold; text-decoration: underline;">Green</span>: <span style="font-weight: bold;">AT&T</span> is planning a new
eco-rating system for mobile devices on its network that will rank units for based on environmentally "preferable" materials, energy efficiency, responsible end-of-life options and eco-friendly manufacturing. <br><br><span style="font-weight: bold; text-decoration: underline;">Events</span>: The
<span style="font-weight: bold;">ACA</span> announced it would make available a $129 day-pass for the <span style="font-weight: bold;">2012 ACA Summit</span> in Washington, D.C. <a href="">Details here</a>. <br><br>--- <span style="font-style: italic;">Catch today's media market
news in</span> <span style="font-weight: bold;">The Evening BRIDGE</span>. • <P>

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