Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nasdaq  >  Netflix       

Mes dernières consult.
Most popular
End-of-day quote. End-of-day quote  - 06/19
404.98 USD   +3.73%
06/24NETFLIX : A superhero with swagger
06/24PETER THIEL : big tech directors miss shareholder meetings
06/23NETFLIX PR CHIE : report
News SummaryMost relevantAll newsofficial PublicationsSector newsTweets
OFFRE ETE Zonebourse : Jusqu'à 6 mois offerts sur tous les portefeuilles

CBS, Time Warner Cable duke it out over deal as TV industry faces challenges

share with twitter share with LinkedIn share with facebook
share via e-mail
07/24/2013 | 02:16am CEST

(Reuters) - The CBS broadcast network and Time Warner Cable, which are battling over the fees the cable company pays to carry CBS, have taken their fight public in advertising that risks turning off the very consumers they need to grow their businesses.

If they do not reach a new deal by Thursday, CBS would go dark in markets like Los Angeles and New York, depriving viewers of summer shows such as "Under the Dome" and "Big Brother."

This would add to the challenges that cable companies and traditional broadcasters already face from competitors such as Netflix that are making inroads with viewers who can opt to watch shows online instead of paying for cable subscriptions.

Netflix said on Monday that it had added 630,000 U.S. streaming video customers in the second quarter of this year.

Cable companies have not yet released quarterly financial results but the top nine cable operators lost about 264,000 video subscribers in the first quarter, according to Bruce Leichtman, president of Leichtman Research Group, which tracks cable and broadband subscribers.

In TV commercials airing in some U.S. markets, Time Warner Cable accuses CBS of giving New York a "black eye" while CBS tells consumers in its own spot to "say no to Time Warner Cable."

"Anytime you have arguments that result in blackouts, that is negative for the industry," said Gabelli & Co analyst Brett Harriss. "It's negative for both CBS and Time Warner Cable."

CBS and Time Warner Cable will eventually settle, as cable operators and media companies always do out of necessity. Cable operators need someone to cover the hefty cost of making TV shows they air and media companies like CBS need the fees they get from cable companies.

Consumers being bombarded by the marketing campaign know how it will end: they will pay higher subscriber rates to the cable operator to carry CBS.

"It's not smart to be rubbing consumers' noses in how much we pay for something, especially if it's something that could go away," said Wedbush Securities analyst Michael Pachter.

The industry is mature and not growing. Today, there are 100 million customers paying for television subscriptions through cable, satellite and telecom companies, according to cable research firm SNL Kagan. That number has been about flat since 2011.

Craig Moffett, an analyst at Moffett Research, estimates that about 2 million households have cut the cord, or cancelled their video cable service, since 2010.

CBS is also facing challenges to its business model. It is suing Aereo, the Internet TV service backed by veteran media executive Barry Diller, for not paying for its broadcast signal. It is also in court against satellite operator Dish Network, whose Hopper digital video recorder automatically skips over commercials.

CBS Chief Executive Leslie Moonves, a former actor, is one of the media business' toughest negotiators and is playing hardball with Time Warner Cable.

"If on Thursday our content has been pulled off their service, you'll know that we are in the midst of a crucial struggle we intend to bring to a satisfactory conclusion," he told CBS staffers in a memo.

Time Warner had already encouraged viewers to subscribe to Aereo to access CBS and other channels for a fee of $8 a month, none of which goes to CBS.

"Is it really a good idea to intentionally drive customers to Aereo? What if they liked it too much?" Moffett said.

TV viewers are already all too familiar with blackouts. Last year alone, there were 91 blackouts, up from 51 in 2011 and 12 the year before, according to the American Television Alliance, which tracks these disputes.

While there is no evidence that blackouts encourage TV viewers to cancel cable subscriptions, there are hints of the damage that can be caused by a blackout of channels. Last summer, satellite operator DirecTV said its churn, or rate of cancellations, increased when Viacom's networks including Nickelodeon and MTV went dark for 10 days.

Christina Wong, a 31-year-old Los Angeles resident who works in public relations, said she dropped her cable subscription five years ago and blackouts are among the reasons she would not renew it.

"Hearing about all these fights is just bad publicity," said Wong. "If that was something I'd be paying for, I'd be very angry."

(Reporting by Liana B. Baker; Editing by Ron Grover, Toni Reinhold)

By Liana B. Baker

Stocks mentioned in the article
ChangeLast1st jan.
CBS CORPORATION 0.53% 56.7 Delayed Quote.-3.90%
DISH NETWORK CORPORATION 3.44% 34.91 Delayed Quote.-26.89%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on NETFLIX
02:19pNETFLIX : model can help maximise performance
06/24NETFLIX : A superhero with swagger
06/24PETER THIEL : big tech directors miss shareholder meetings
06/23Days after buying Time Warner, AT&T launches new TV service
06/22Netflix communication head quits over 'insensitive' comment
06/22NETFLIX : Marco pigossi comes to netflix
06/22NETFLIX : Carlos saldanha and netflix will unveil invisible cities, new brazilia..
06/22NETFLIX : 'Dear White People' renewed for third season
06/22NETFLIX : Jason Ritter to Star in Netflix's Superhero Family Drama Series Raisin..
More news
News from SeekingAlpha
06/19IQIYI : 2 Reasons The Run Can Continue 
06/19NETFLIX : A DCF Valuation 
06/19Netflix scratches $400 off its bucket list 
06/19Wall Street can't stop loving Netflix 
06/18Will AT&T/Time Warner Ruling Accelerate M&A? 
Financials ($)
Sales 2018 16 105 M
EBIT 2018 1 777 M
Net income 2018 1 292 M
Debt 2018 6 725 M
Yield 2018 -
P/E ratio 2018 143,98
P/E ratio 2019 88,85
EV / Sales 2018 11,5x
EV / Sales 2019 9,36x
Capitalization 179 B
Duration : Period :
Netflix Technical Analysis Chart | 4-Traders
Technical analysis trends NETFLIX
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 45
Average target price 342 $
Spread / Average Target -17%
EPS Revisions
Wilmot Reed Hastings Chairman, President, & Chief Executive Officer
David B. Wells CFO & Principal Accounting Officer
Jay C. Hoag Lead Independent Director
Richard N. Barton Independent Director
Timothy M. Haley Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
NETFLIX104.20%178 698
NETFLIX114.15%178 698
NASPERS LIMITED-5.67%106 898
IQIYI, INC0.00%31 280
WEIBO CORP (ADR)-5.11%21 907