Large US broadcasters to profit from DTV bill: S&P Equity Research

MUMBAI: With the growing likelihood that the US House and Senate will pass the Digital Transition and Public Safety Act of 2005 early next year, Standard & Poor's (S&P) Equity Research forecasts that large media operators may be in the best position to exploit the many opportunities the new legislation creates.

The announcement was made on Standard & Poor's MarketScope, the firm's electronic platform for financial advisors and asset managers featuring intra-day market commentary and independent investment research and analysis.

In effect, the current bill wending its way through both houses of Congress sets a Digital Television (DTV) "hard date" of 17/2/2009. By that time local TV broadcasters would surrender analogue broadcast spectrum to the US government. This process could fetch over $10 billion in a public auction.

Standard & Poor's equity analyst for the Broadcasting, Cable & Satellite industries Tuna Amobi says that the final Bill may also include a pro-consumer provision on the potentially thorny issue of government subsidies for digital-to-analogue down converter boxes for qualifying US households.

In terms of impacts on specific companies' fortunes, Amobi suggests that these developments will continue to favor larger media operators. "Local TV broadcasters that are part of media conglomerates such as Disney Viacom and News Corp's Fox TV, mostly with leading O&O stations in major US markets, are well-positioned to negotiate adequate "in-kind" compensation, including further launches of branded cable networks, or increasingly, forced carriage of multiple digital streams.

Amobi states, "Conspicuously missing from the proposed DTV Bill is the intertwined issue of digital 'multi-cast must-carry' -- which would address the pre- and post-DTV mandate

for cable carriage of dual analogue/digital broadcast signals, as well as multiple digital streams from local TV stations."

Still, with a total of $1.5 billion designated to subsidise what S&P estimates to be over 20 million US homes relying exclusively on free over-the-air broadcasting, combined with 35 million or so analog cable homes (in many cases several homes with multiple TV sets), the proposal could fall short of insuring an orderly transition.

While the US cable industry scored a key win with a favorable FCC vote on digital multicasting earlier in 2005, the issue is likely to resurface on the Congressional agenda in 2006, perhaps through a separate Bill or an Appropriations amendment. Over the course of the DTV transition, however, Amobi expects local TV broadcasters to increasingly attempt to extract additional revenues from cable operators,

through increased "cash-for-carriage" demands for retransmission consent.

S&P believes that not all operators will do as well by the legislation. Amobi predicts a possible squeeze for smaller cable operators such as Mediacom, RCN, Insight or Cable One, and similarly for independent local broadcasters such as LIN TV, Young Broadcasting and Hearst Argyle - many of who now already face declines in network compensation, amid tepid growth in traditional ad revenues.

"Furthermore, bigger cable operators such as Comcast, vertically integrated Time Warner or well-clustered Cablevision, with relatively manageable spectrum constraints, are likely to face relatively minimal DTV or retransmission consent exposure," adds Amobi.

Latest Reads
CNNMoney new section will be about the fastest growing economy; MoneyStream app launched

MUMBAI: Attracting 1.8 million average monthly page views, witnessing a 37 per cent growth in video consumption and 16 per cent in unique browsers month-on-month from India in less than a year’s time is not smooth. In its ambitious plan of global expansion, CNN Digital is leaving no stone unturned...

Television TV Channels News Broadcasting
Content a 'Game of Thrones'; AT&T's control over HBO, Cartoon Network, Warner Bros faces regulatory lens

The global media landscape is resulting in a new juggernaut as an internet and cable behemoth yesterday purchased an entertainment conglomerate making the former unmatched in its size and reach to consumers through home broadband, smartphones, satellite television and a battery of movies and cable...

Television TV Channels English Entertainment
US$ 4.5 bn expected from IPL rights; SC recommends accounts scrutiny

The Supreme Court on Friday froze all financial transactions between the BCCI and state cricket associations by directing the apex body not to disburse any funds till it resolves to abide by the Justice RM Lodha panel recommendations on reforms by 3 December . The top court ordered that none of...

Television TV Channels Sports
TVS Tyres is co-presenter for Asian Champions Trophy 2016

Continuing its strong connect with sports, TVS Tyres has associated with Asian Champions Trophy 2016 by becoming the co-presenter. The Asian Champions Trophy is one of the premier hockey tournaments, a much sought after annual international competition promising some great hockey action. This...

Television TV Channels Sports
Q2-17: Zee Learn declares maiden interim dividend

The board of directors of the Essel group’s education company Zee Learn Limited (ZLL) have declared a first time ever dividend of 5 percent per equity share of Re 1 each for the quarter ended 30 September 2016 (Q2-17, current quarter).

Television TV Channels Factual & Documentary
Whether BARC action can stop unethical practices?

MUMBAI: Can businesses and industries practise their art of selling fairly although they have 'Fair Practices' training during academic courses, workshops and several ISO and other certifications? There seems to be the fear of the lawman, and not the law in India. If the traffic cop is watching,...

Television TV Channels Viewership
TV Superhighway: beIN, Yaddo, AfricaXP have joined us, says Magine CEO Ambuj Goyal

CANNES; Magine has secured partnerships with four of the industry’s most exciting sports, documentary and entertainment content providers. Partnerships with beIN, the international media group and owner of MIRAMAX; Yaddo, the new documentary streaming service headed up by former head of The BBC’s...

Television TV Channels Factual & Documentary
Colors emerges strong on strength of Naagin I & II

MUMBAI: One of the top rated shows Naagin Season 2 helped Colors reach a top-ranking position.

Television TV Channels GECs
Pakistan Broadcasters Association to oppose PEMRA Indian content ban

MUMBAI: The Pakistan Electronic Media Regulatory Authority (PEMRA) shocked both Pakistan and Indian broadcasters when it issued an order blanking out  all Indian content from Pakistan’s television channels on 19 October.

Television TV Channels GECs

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories