Cord Cutting: A Big Bite This Year?

The specter of cord cutting is back in the news as the CEA and Credit Suisse suggest that pay TV providers could see their subscribers, and their revenues, reduced significantly ( even more significantly if Apple comes out with its much-rumored HDTV) in the next 12 months.  

To be sure, the CEA is famed for research supporting its own agendas but the opinion of Credit Suisse adds gravitas.  Noted analyst Spencer Wang, "Our prior work suggests that a 10% reduction in traditional pay TV subscribers could result in a 10 percent decline in cable networks revenue, all else being equal.  However, the impact on cable networks EBITDA (cash flow) would be even greater—20% to 25% —given the high fixed cost leverage in the business.”

Meanwhile one key cord-cutting force, Netflix, is taking a pummeling from customers unhappy with its rate hikes.  The streaming portion of the service needs better content, many say.  That opinion is likely to worsen Netflix's new deal with NBCU conspicuously cuts back on current season viewing.  (It will be previous season only thus leaving fans of shows such as "Saturday Night Live" hanging.)  

From the investment community's viewpoint, at least one analyst (Janney Capital Markets' Tony Wible) suggests that the price change is aimed at pushing "subs to streaming and/or using discs to fund the rising cost of digital content."  And, for their part, investors appeared unconcerned as NFLX rose 2.56% in trading yesterday to $298.73.•

Comcastical Service ... & a Cut Customer

Comcast says its 'personal help-desk' Xfinity Signature Support is now available to all its customers.  The service, which is available via subscription or per-service charges, will help customers with all kinds of home electronics connected to Comcast network services.  --- In other Comcastical news, The Consumerist notes that at least one Comcast customer has lost his internet for a year for breaking the monthly bandwidth cap.  Turns out he was uploading a huge number of music files into Amazon's Storage Cloud, and those uploads, combined with downloads, went over the top.•

Etc: News Corp. Cont'd – Encore Originals – Fighting That Kansas Triopoly

Scandal du Jour:  Sen. Jay Rockefeller (D-WV) says the UK phone hacking/snooping scandal raises "serious questions" about whether News Corp. has broken any U.S. laws.  "The consequences will be severe," he said, if News Corp. is found to have hacked the phones of "9/11 victims or other Americans."  Meanwhile, in a sign of just how severe the scandal has become, News Corp. dropped its $12B bid to take full ownership of BSkyB.  BSkyB's board promptly pushed out a notice proclaiming that it still offers an "excellent" investment case.

Programming:  Encore has thrown its hat into the original series ring with two mini-series adaptations, "Moby Dick" and "The Take." Watch for one high profile project per quarter, starting in 2012. --- Sony has renewed its contract with ESPN 3D which plans to double its college football carriage this fall. --- In case you missed it, DIRECTV and ESPN are offering interactive, multi-channel coverage of the Open Championship now ongoing at Royal St. George’s Golf Club, in Sandwich, Kent.  It's the third year in a row for the extra coverage. 

Gov't:  Five local Kansas cable ops have sent a letter to Kansas Gov. Sam Brownback asking him to lobby the FCC to only allow the formation of a pending triopoly of stations in Topeka with meaningful safeguards ... citing also the already rampant coordination of retrans negotiations in other markets by the two broadcast parties to the Topeka deal.

Advertising:  You probably guessed this from the upfronts, but ZenithOptimedia has made the official forecast: cable network ad spending will likely top broadcast this year. --- According to AdAge (here) Intel will sponsor Discovery Channel's new "Curiosity" series to the tune of at least $10M.

Analyze This:  According to the latest from Accenture, more than 90% of global media execs say they're not taking full advantage of digital opportunities to reach their customers and manage customer relationships. 

Deals – Real & Rumored:  NBC News and NewsOne have formed a "Black news" partnership joining their web-oriented editorial and ad sales. ---  BlueHighways TV  and Rural Rhythm Records have a new partnership to bring the label's artists to BHTV viewers through HD television specials, guest appearances and music video segments. --- Kudos to Time Warner and Facebook on their "Stop Bullying:  Speak Up" campaign.

Folks:  Oprah Winfrey will take the titles of CEO and chief creative officer at her OWN channel. --- David Kansas has joined American Public Media Group as COO. --- Jodi Kahn is new president of NBCU's iVillage.

In the Courts:  Viacom lost its bid for the dismissal of a lawsuit under which Family Suites Resort accuses the programming giant of violating a contract by licensing the Nickelodeon brand to Marriott.

SkyREPORT:  Globalstar's six satellites made it into space yesterday via Arianespace and a Russian Soyuz rocket.  --- Commercial space venture SpaceX says it will renovate an old launch pad at California's Vandenberg Air Force Base for its Falcon Heavy craft.

Wireless:  T-Mobile has doubled the theoretical peak download speed of its 4G network in 55 additional markets, including Charlotte and Raleigh, NC, Boston MA, and Washington D.C.

Catch up with the markets this afternoon in The Evening BRIDGE.•