Did a federal court just give underemployed M&A guys a boost? Could be: The United States Court of Appeals in Washington, D.C., has overturned a longstanding cap on cable-system ownership.
If the decision holds up, it could well start another round of dealmaking similar to the one we saw at the beginning of this decade in which the industry consolidated to about half a dozen major players.
Comcast was mum about other cable networks it has persuaded to join its “OnDemand Online” program, which will offer TV shows over the Web to its customers. But word is getting out anyway. The people who bring you Food Network and AMC, for instance, have signed on.
At one point this month, there had been speculation that Disney CEO Bob Iger would use his speech at the cable industry’s annual convention to announce a deal with Hulu. Instead, Iger used the forum to try to placate his cable partners, who generate an enormous revenue stream for his company, while explaining that he was going to move full-steam ahead when it comes to putting his stuff online for free.
What if you could deliver ads, electronically, to people based on where they lived, what they liked and what they might be interested in buying? Novel idea–for Web advertisers in the pre-Google world of the mid-1990s. But in TV land, where things move much, much more slowly, this is still a radical notion.
Zilch. That’s the snap consensus from the Web pundits, who are baffled by Cablevision’s plan to start charging for access to the online version of Newsday, the Long Island daily it overpaid for last year. Will someone please explain what the cable guys are up to?
From the small victories department: Cablevision says that its purchase of Newsday last summer wasn’t quite the disaster it had feared. That is, instead of taking a $450 million write-down on the $650 million purchase, the cable company is only writing off $402 million on the Long Island newspaper. Even better: The paper didn’t do that poorly in the last three months of 2008.
Steve Rattner, once one of the most prominent bankers in the media business, is going to Washington after all. Except that the Quandrangle Group founder won’t be getting the “Car Czar” job he was originally supposed to take in the Obama administration, since that job never got created. He’ll be an adviser, instead. Meanwhile, President Barack Obama has formally appointed his New Media team.
This is the soft bigotry of low expectations: Viacom saw its earnings drop by 70 percent in the last quarter, pushed down by a write-off and weak advertising and DVD sales. But compared to its big media peers, that’s really not so bad–at least it didn’t drop a bundle on a newspaper in the last year.
What happens when you pay a whole lot of money for a newspaper as the newspaper industry is in freefall? You have to make an embarrassing admission to shareholders a year later. Last week, we saw News Corp. go through this exercise when it wrote off half the value of the $5.7 billion it spent on Dow Jones and The Wall Street Journal. Now it’s Cablevision’s turn: The Long Island-based cable company is writing off as much as 70 percent of the $650 million it spent on Newsday last year.
Peter Kafka has been covering media and technology since 1997, when he joined the staff of Forbes magazine. Most recently, he has been the managing editor of the tech and media Web site, Silicon Alley Insider. Read more »
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