Wible's Weekly - Game Changers, 4K Updates, and Online Price Parity - Janney/MediaEntertainment

Videogame Updates amp8211 Activity around gaming is increasing as the new console cycle nears MSFT recently confirmed the launch date for the Xbox One Nov22 and also mentioned preorder activity exceeded prior consoles DIS39 Infinity has done well in its launch and retailers have commented positively on demand Infinity could be a swing factor not only for DIS39 Interactive segment but also for overall earnings GME expanded its reach by going live with Kongregate Mobile which is key to participating in one of gaming39s fastest growing segments Meanwhile CMCSA is testing a cloud gaming offering XFinity Games in collaboration with EA which ties into our thesis of leveraging their broadband platform to deliver incremental services The service will use iPads as controllers which implies a more casual orientation to gamesUltraHD amp8211 Momentum is building around UltraHD with new services and tests Sony is betting on 4K through the first download service with 70 film titles which will expand to over 100 by the end of the year This will be a key way to get content in the near term as MVPDs may need to invest in the new technology required first and means SVOD and OTT may will drive availability of content However it may also strain the broadband network if there is fast adoption Separately BSkyB in the UK conducted its first 4K test broadcast of a Premier League soccer match We believe sports content will be one of the main drivers for 4K as it was for HDIPTV Updates amp8211 TGT is joining retailers such as Tesco in the UK in providing an IPTV offering likely for its loyalty card customers The streaming offering called Target Ticket promises instant access to 15000 titles including films TV series and next day TV shows The service increases competition in the digital rental and sellthrough market although we suspect it will not be comparable to SVOD offerings such as NFLX Streaming has become more popular than even DVR and VOD viewing during Primetime according to an Ipsos MediaCT survey of TV viewers with 47 of viewers saying that they streamed content vs 36 using the DVR and 28 using VODTV Ad Pricing amp8211 TV and online pricing of advertising are heading toward parity within 5 years according at CBS CEO Les Moonves As online viewing of TV content increases at the expense of traditional TV viewing this becomes a necessity to protect networks39 economics TV pricing has increased over time despite falling ratings and we believe advertising at certain networks could be at risk from second screen activity Online pricing has traditionally trailed TV pricing despite interactivity and more detailed targeting capabilities However only about 1020 of digital video ads have interactive components although this is expected to double in 2014 according to video ad management company VindicoRetrans amp8211 Broadcasters39 position on retrans was strengthened when the US District Court for DC ruled that Aereolike provider FilmOn X formerly known as Aereokiller has to shut down its service nationwide because of likely copyright violations The decision creates uncertainty for Aereo which has been expanding into new markets recently and which has seen a different ruling by New York courts to date The decision also reduces alternatives for MVPDs in retrans negotiations such as TWC who had publicly referred to Aereo as an alternative during the CBS blackout which was recently resolvedTony Wible joined Janney Montgomery Scott in 2008 and is a Managing Director covering the Media and Entertainment sector after spending the previous 10 years at Citigroup Investment Researchamp8212most recently covering the Broadcasting and Entertainment Services industries Tony can be reached at twiblejanneycom Janney Montgomery Scott LLC is a US brokerdealer registered with the US Securities and Exchange Commission and a member of the New York Stock Exchange the Financial Industry Regulatory Authority and the Securities Investor Protection Corp Disclosures may be reviewed at Wible39s WeeklyRead all Tony39s MediaBizBloggers commentaries at Wible39s Weekly JanneyMediaEntertainment Check us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Wible's Weekly - Game Changers, 4K Updates, and Online Price Parity - Janney/MediaEntertainment

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