The Sports TV Plunge – Secular Shifts Create Challenges for Networks and Leagues

When it comes to sports viewership, there is suddenly cause for concern.  As we awaited the return of sports, massive ratings were a foregone conclusion with people still spending more time at home, pent up demand, and the proliferation of sports betting.  It has been the opposite, capped by NBA Finals and Stanley Cup viewership down 49% and 61% respectively.  Meanwhile, engagement remains significantly elevated across video games and streaming platforms from Netflix to Twitch, even as lockdowns eased months … Continue reading The Sports TV Plunge – Secular Shifts Create Challenges for Networks and Leagues

Eight Questions for Netflix’s Q3 2020 Earnings Interview Tonight

As we do each quarter heading into Netflix’s earnings interview, here are the eight questions investors should be asking management tonight (our Q2 2020 questions can be found here). 1. Key Employee Turnover. Changing management is nothing new at Netflix and certainly ties to Reed Hastings’ recent book, No Rules Rules, which talks extensively about “The Keeper Test.” That said, when one of your top executives leaves, especially an executive who was instrumental in Netflix’s original programming push (Cindy Holland), we … Continue reading Eight Questions for Netflix’s Q3 2020 Earnings Interview Tonight

T-Mobile Leases More Spectrum And Verizon’s 5G DSSappoints

T-Mobile is leasing more 600 MHz spectrum, following the smaller than expected lease agreement with Dish. We review how much they got and what deals might be next. We also discuss some new comments from Verizon about their early DSS deployments. Why does T-Mobile need more spectrum again? We view 600 MHz as a stop-gap measure for T-Mobile while it cleans up and then builds out its deep 2.5 GHz spectrum holdings. We have been talking about 2.5 GHz spectrum … Continue reading T-Mobile Leases More Spectrum And Verizon’s 5G DSSappoints

Paging T-Mobile, The iPhone 12 Launched Today!

The 5G iPhone is here and AT&T slapped a record breaking subsidy on it. That’s good news for Apple, which would benefit if the 6-year lengthening of the replacement cycle inverted. It was also a good day for Verizon’s Hans Vestberg, who got to flip the switch on his 5G network on Apple’s stage with Tim Cook and introduce mmWave spectrum across the complete line of new iPhones. It was less fun for Mike Sievert. The fat subsidy is back … Continue reading Paging T-Mobile, The iPhone 12 Launched Today!

Disney’s Restructuring Is Less Transformative Than We Thought

At Netflix, Amazon Prime Video and Apple TV+, there is only one place for content to go: streaming. At legacy media companies that are trying to pivot to streaming, there are a wide array of choices including theaters, broadcast TV, cable TV, streaming, and sometimes even multiple streaming services. In turn, we were really excited when we saw the Disney restructuring news last night (link). Our initial interpretation, bolstered by what we thought we heard Disney CEO Bob Chapek say … Continue reading Disney’s Restructuring Is Less Transformative Than We Thought

It’s Time For Stankey to Call Ergen

Despite all the noise, we still believe a combination of the satellite Pay TV business of AT&T and Dish is inevitable. If anything, the noise by the press is an indication that it might be drawing near. While AT&T may elect to take a multi-step approach that involves private equity, we believe the end game for DirecTV is Dish. This would provide a material deleveraging event for both companies and present a new challenge for broadcast/cable network programmers. What price … Continue reading It’s Time For Stankey to Call Ergen

Are Streaming Wars a Fallacy? 64% of Streaming Spent in 3 Apps, 83% in 5 Apps

Netflix has consistently stated in their long-term view that “streaming entertainment is replacing linear TV,” which is consistent with Roku’s view (link) that the “massive TV ecosystem is moving to modern platforms with streaming at the center of a more dynamic and innovative approach to content distribution.” Legacy media finally agrees and while Disney is by far the most aggressive to-date (link), all the major media and entertainment companies now appear to believe streaming is their future (WarnerMedia, NBCUniversal, ViacomCBS, … Continue reading Are Streaming Wars a Fallacy? 64% of Streaming Spent in 3 Apps, 83% in 5 Apps

Raising Netflix Price Target to $630 as Movie Competition Disappears

Netflix stock has surged far beyond the price target we set in October 2019 (link). At that time, fears around the coming onslaught of competition from Disney+ and AppleTV+ were peaking, and investors were looking ahead to HBO Max and Peacock entering the “streaming wars” in 2020. Netflix not only shrugged off competition, the COVID-19 pandemic has pulled forward industry change, breaking the theatrical business just as Netflix’s theatrical investments are starting to bear fruit. In turn, we are increasing … Continue reading Raising Netflix Price Target to $630 as Movie Competition Disappears

What The Shutdown of Sprint’s Network Means For TowerCo’s

“Lower price for longer duration” is the messaging coming out of the new Master Lease Agreement (MLA) signed between T-Mobile and American Tower. But what does that mean and why would a tower company need more duration given the historically low churn? We crunched the numbers in an attempt to answer those questions and come up with a view on 2021 estimates ahead of the February guide. We also discuss what AMT’s new MLA might mean for SBA and why … Continue reading What The Shutdown of Sprint’s Network Means For TowerCo’s

Verizon’s Move To #1 In Prepaid. Why Now, Lost Revenue And Taking The Fight To T-Mobile.

The sale of TracFone to a national wireless operator in the United States is long overdue. The synergies to any of them were obvious and we believe America Movil has been open to the discussion for some time. Verizon ended up pulling the trigger today, so we ran through the implications for each of the US operators and America Movil. The obvious deal that no one pursued The deal logic of a TracFone purchase is simple. The facilities-based buyer can … Continue reading Verizon’s Move To #1 In Prepaid. Why Now, Lost Revenue And Taking The Fight To T-Mobile.