Makan The Call On The Ergen vs T-Mobile Drama

It’s now up to the DOJ to decide on the lease terms for T-Mobile’s use of Dish’s 600 MHz spectrum. The DOJ might also need to play a role in resolving whatever outstanding issues have delayed the closing of Dish’s $1.4 billion purchase of Boost. We make recommendations on both and question whether the DOJ and FCC need to go even further with Dish’s larger spectrum portfolio. DOJ to decide spectrum lease Dish and T-Mobile have been unable to agree … Continue reading Makan The Call On The Ergen vs T-Mobile Drama

LightShed’s Favorite Quotes and Key Takeaways from Q1 2020 TMT Earnings

So much has changed since our last quotes review published on March 7th (link), before shelter-in-place orders took effect. Q1 2020 earnings calls were filled with commentary around managing through the pandemic, liquidity and the uncertainty that lies ahead. Below are the most impactful takeaways from Q1 2020 earnings in streaming video, gaming, television, movies, live events and mobile/social platforms grouped by topic, with our own thoughts/snark following each memorable management quote. The obvious is how gaming, streaming and social/mobile … Continue reading LightShed’s Favorite Quotes and Key Takeaways from Q1 2020 TMT Earnings

HBO Max Makes Critical Decision – Does it Spell Doom for Channel Stores?

In 2019, as legacy media companies finally came to the realization (albeit, more forced than realized) that they had to pivot away from the dying multichannel video bundle, we highlighted the risk that Amazon, Apple and Roku could be the real winners, as legacy media did not appear to have the “guts” to really go all-in on direct-to-consumer streaming. HBO was the prime example of taking the easy road while sacrificing long-term value creation, as we highlighted in July 2019: … Continue reading HBO Max Makes Critical Decision – Does it Spell Doom for Channel Stores?

Netflix’s US Biz Growing Revenues Faster than Hulu: 3 Key Implications

There has been a surprising focus/obsession among investors and the industry press over the relative subscriber base size/growth of SVOD platforms and not enough focus on relative SVOD revenues and revenue growth. We highlighted this issue in our Six Issues Disney Did Not Address Last Night That Need to be Answered (link), which centered on what Disney+’s ARPU is outside the US, particularly in India (where it is embedded in Hotstar at a fraction of the US ARPU). Trying to … Continue reading Netflix’s US Biz Growing Revenues Faster than Hulu: 3 Key Implications

Downgrade Cogent to Neutral On Growth Slowdown And Questions On Dividend

We are downgrading Cogent to Neutral from Buy on disappointing revenue growth in Q1 and new questions about the company’s ability to sustain dividend growth. The massive slowdown in the normally predictable Corporate customer base was particularly troubling. Dating back to 2018, we expected Q2 2019 to be the trough quarter for Cogent’s revenue growth with acceleration thereafter. That thesis is broken. Cogent sequential revenue growth slowed dramatically in Q1 to 0.4% from 2.4% last quarter. This resulted in a … Continue reading Downgrade Cogent to Neutral On Growth Slowdown And Questions On Dividend

The Six Issues Disney Did Not Address Last Night That Need to be Answered

We walked away from Disney’s fiscal Q2 (March) earnings conference call even more convinced that investor expectations for fiscal 2021 and 2022 are far too high (see yesterday’s downgrade to SELL, link). But what really upset us was that there were several important issues that were never addressed by the company or even asked about by analysts during the Q2 earnings call. These are our top six: 1) Parks Being Allowed to Re-Open is Different Than Should Parks Re-Open In … Continue reading The Six Issues Disney Did Not Address Last Night That Need to be Answered

Downgrading Disney to SELL $85 Target; Leverage Could Hit 5x as Earnings Plummet

Our April 15th report on Disney titled Disney’s Unique Vulnerability to COVID-19 Should Keep Investors Away centered on how we thought about fiscal (September) 2021 earnings relative to fiscal 2019, acknowledging that 2020 would likely be ignored by investors. Yet, the more we have learned in the past few weeks and thought about how we modeled 2021, we believe our estimates were still far too aggressive (and we were below everyone else). In turn, we are significantly cutting our 2021-2022 … Continue reading Downgrading Disney to SELL $85 Target; Leverage Could Hit 5x as Earnings Plummet

Eight Reopening Post COVID-19 Questions Legacy Media Executives Must Answer

As parts of the world begin to emerge from quarantine, we have eight critical questions for legacy media executives to answer as they begin to report Q1 2020 earnings this week: 1) Is Talent Comfortable With Restarting Production? Both Warner Bros. (link) and Netflix (link) have talked about the challenges and complexities of restarting production. Daily (if not even more regular) testing, quarantining (before production and the inability to leave the location during shoot), and adjusting scenes (tied to where … Continue reading Eight Reopening Post COVID-19 Questions Legacy Media Executives Must Answer

Eight Key Video Game Takeaways from the Quarantine

The global video games industry has benefited from technology driven secular tailwinds for several years.  More players touch games every year, players are playing for longer, and publishers are able to directly monetize time spent, with all of this at a higher margin.  The trend has been well established.  At the same time, the games industry has exerted broader cultural influence, as games like Fortnite became part of the zeitgeist, or technologies developed for games have become more commonplace. Consumer … Continue reading Eight Key Video Game Takeaways from the Quarantine