TWX, DISH & Web Eye Physical Fix

With AT&T now ready to impose overage charges for both DSL and U-verse customers, the web is awash with advice for consumers seeking to avoid overage fees.  One frequent theme:  Try watching DVDs.

Ah!  Shades of Charlie Ergen's gauntlet thrown to studios on Monday's investor call:  "It's up to the studios whether they want a physical presence or whether they want to go all electronically .... Blockbuster can indirectly provide competition out there by presenting a better financial model."

Another ode to the physical came recently from Time Warner's Jeff Bewkes who told an audience at the Tribeca Film Festival, “DVDs will get better and better because they will have high-def … and all the extra stuff, if you want.”
 
So ... back to the future with Charlie's Blockbuster?  We've seen a whole lot stranger.•

Markets: TiVo Opt Outs – TV Sets Down – TV Everywhere Up

Lots of market news from yesterday, including Comcast beating the consensus, CBS crowed and named a new anchor, an outlook for TiVo, spinoff ideas for HBO and  an onslaught for TV Everywhere:

• Comcast beat projections for 1Q11 reporting 36¢/eps, up y/y from 31¢ (not counting costs of acquisition of 51% of NBCUniversal - release is here).  Pro forma revenue was $13.3B.  Comcast dropped another 39K video subs but added 418K web and 216 Voice for a combined gain of 639K or 49,039K combined ... a little ahead of Netflix.  Cable nets led the NBCU results.

• CBS 1Q11 crowed as free cash flow jumped 29% y/y to $853M.  Operating income more than doubled to $439M on revenues of $3.51B, despite no Super Bowl this year, down only 1%. Cable nets revenue grew from $368M to y/y $393M.  "Local Broadcasting revenues for the first quarter of 2011 increased 2% to $621 million from $606 million for the same prior-year period, primarily driven by higher advertising sales and higher retransmission revenues."  So CBS doubled its quarterly dividend.

• Commenting on the DISH/TiVo settlement, Kaufman Bros.' Todd Mitchell notes that there is value in TiVo's IP portfolio, "but investors should put to rest the thesis that TiVo is going to get a license for every DVR."  There are many approaches to the core functionality, he says.  Plus "TiVo already has agreements with Comcast and DirecTV which are opt-in in nature and they are not opting-in."  He keeps his $10 target and 'Hold' on TiVo.

• Another day another suit against DISH ... this time Starz and Disney are suing over DISH's free year of Starz (along with rate increase).  Disney is also threatening to sue Starz.  Good wrap of the mess - which he predicted - by BTIG's Rich Greenfield here (registration required).

• BTIG's Richard Greenfield wants Time Warner to consider a HBO spinoff.  Go here and don't forget to register.

• Nielsen says U.S. HH with TV sets has dropped by 1.2% y/y to 96.7%.  Brace yourselves for another round of yes-it-is, no-it-isn't on cord cutting.

• Meanwhile, Parks Associates says TV Everywhere services will be available to 81% of U.S. and Canadian pay-TV subs by mid 2011.  Maybe we'll call this "cord wrapping" as the technique du jour to keep those paying subs. 

And, in case you missed these from The Evening BRIDGE:

• Auto sales are helping SiriusXM report 1Q11 373K net sub additions bringing its sub total to 20.6M.  Revenues jumped 9% y/y to $724M.  Citadel’s Vijay Jayant wasn’t too impressed, though, calling it a “mixed quarter” bolstered by auto sales.  Mel Karmazin wants to raise prices, too ... but needs government approval.

• Citadel’s Shing Yin is downgrading Verizon to ‘reduce’ ($33/share target) citing smartphone trends that don’t live up to the hype.

• Radio One announced it closed on the 12.4% of equity that was previously held by DIRECTV giving Radio One about 50.9%; the company also reported updated preliminary results for the quarter ending in March of $65M in revenue, up just over 10% y/y.

• Is this a sign of an improving economy?  Bernstein Research’s Craig Moffett, covering MetroPCS (‘marketperform’), reports, “Last week, Sprint blew away expectations by adding 846K direct pre-paid subscribers, with strength in all their pre-paid brands (Boost, Virgin, and government-assisted Assurance), a result that was up 143% YoY. Today, MetroPCS made it clear that Sprint's gain was not a matter of stealing market share, but rather a reflection of a pre-paid segment that has gotten its mojo back. The results bode well for growth for pre-paid peer Leap Wireless, as well.”

• Bloomberg reports DISH sold $2B of 10-year notes “in its first bond offering since 2009 after doubling the size of the transaction.”

• Reuters reports 1st round for Insight is mid-May.

• Charter reported 1Q11 revenues up a real 2% powered by commercial and internet growth while posting a loss of $110M.  Video ARPU grew 8.2% to $131.01.  Basic “residential customer relationships” (?) grew by about 22K while non-video customer relationships grew by almost 50K, up 23.5% y/y. •

Etc: On the Bin Laden Bandwagon – Microsoft Eyes White Spaces – New Media Guy at Nielsen

Programming:  On the Bin Laden bandwagon:  Discovery will air a one-hour documentary on the death of Osama Bin Laden on May 15; National Geographic Channel has a week's worth of programming (which started yesterday) mostly focused on 9/11. --- HBO and NBC each took home seven awards from the Sports Emmy Awards on Monday. --- According to Nielsen, Bravo is the best at product placement with "Real Housewives" measuring high for its use of Toyotas and Nikes. --- Boosting their 3D prowess, DIRECTV and Panasonic will host a 3D Film Invitational featuring a $25K grand prize.

Comment: How did you hear about the raid in Pakistan?  Click here for a look at how the world (or at least the tongue in cheek respondents to MediaPost did) heard it.  For our part, we turned off the TV Sunday, ignored the laptop and read a book ... we learned about it from the Denver Post at 6 am Monday.  Asked a group at a NAMIC luncheon yesterday ... learning by text won; email 2nd; TV 3rd and no one heard it on the radio. --- PSM

Inside the Beltway:  Microsoft has thrown its hat into white space management ring; the FCC says the Seattle Goliath is in the running.

Deals:  EchoStar is still eyeing a takeover of bankrupt TerreStar but, the company says, the TerreStar auction rules are "uncertain."  The company, which is TerreStar's largest creditor, filed its complaints with U.S. Bankruptcy Court in Manhattan. 

People:  Nielsen media client chief Dave Thomas will relinquish his role next month to be replaced by president of Nielsen Greater China Mitch Barns. -- Motorola Solutions' CEO Greg Brown has been appointed chairman of the board of directors.  He replaces Dave Dorman, who is now lead independent director. --- Both top CTHRA awards went to Discovery this year; one for its flexible work plan and the 2nd to Sr EVP- Global HR, Adria Alpert Romm ... she'll get her award May 11th at a Philadelphia luncheon sponsored by Multichannel News.

SkyREPORT:  SES Astra says its German HD+ service now reaches 769HH with about two-thirds of customers opting for fee-based service after the free 12-month trial period expires.  Paid subs are now ~114K.

Get tomorrow's headlines today with The Evening BRIDGE ... every weekday, after the Bell.•