Greetings from Iowa and Missouri. Pictured is our neighbor’s elaborate balloon bow for his daughter’s prom (it’s even more impressive than the picture). It’s been a full week of news, adding to a Comcast announcement at last week’s MoffetNathanson Technology, Media and Telecommunications Conference. that would offer a content product bundled with Peacock, Apple, and Netflix.
After a thorough observation of the market, we will take a look at the content landscape from the attitude of telecom providers. Unsurprisingly, there are some similarities, but it would be an exaggeration to state that the telecommunications industry is moving at an immediate speed when it comes to content bundling. We will also offer some predictions for AT.
Before we go any further, it’s worth noting the legacy of two giants of the world of finance and telecommunications who recently passed away. We learned through an “Out of Office” reaction that Cam Lanier passed away on Saturday, May 4. He is a telecommunications titan in the South and a close friend of this publication. For those of you who don’t know Cam or his legacy, read this roundup from the Atlanta Business Journal (here) and also check out their TED Statement titled “How to Make a Million Dollars. “Dog Breeding on Paper” here.
The world of finance has also lost one of its smartest investors, Jim Simons, in the last fortnight. Last week we published a provisional memoir that links to a long interview he conducted at MIT in 2019 here. Jim amassed nearly all of his $3 dólares. mil 1 million fortune after the age of 40 (he was 86 when he died) and donated much of it during his lifetime (including $1. 2 billion to Stony Brook University). If you’re not familiar with their story, take some time on Memorial Day weekend and watch the connected video. Finance enthusiasts, capitalists, and philanthropy scholars will not be disappointed.
While the news at the end of the week was about the Dow 30 index (which closed above 40,000 for the first time), many other questions of knowledge influenced the verbal exchange in the market. Producer inflation was higher than expected for April (although it declined for March) and was subdued at the customer level, which was greeted with relief in the markets. Most experts expect a rate cut (in September), although others see any cut postponed until 2025.
Bond markets have doubts about interest rates. After an initial cut on Wednesday, the interest rate trend began to return upwards, and by the start of the weekend, the 10-year Treasury had returned just under two-thirds. of the post-announcement fall of the CPI (now at 4. 42%). Down from 4. 62% a month ago, but up from 3. 94% at the start of the year). set aside.
The Fab Five are less subject to interest rate fluctuations than other sectors of the economy due to their gigantic monetary balances ($494 billion in money and marketable securities as of 03/31/2024). They can be self-financing if required and do not provide any refinancing risk. As we discussed in the May 5 report, Apple has started buying back shares, which has allowed it to break even during the year. Since it pronounced its effects just over two weeks ago, the price of the Cupertino tech leader has risen through more than $310 billion. Despite their recent comeback, they are far from their Fab Five peers in terms of price creation in 2024.
Meanwhile, the top five telecommunications companies continue to slowly collect prices. Since April 26, the organization has halved its total equity loss in 2024, to -$15 billion, with cable stocks falling by $34 billion and wireless/telecom securities rising by $19 billion. a significant increase in price last week, but Verizon accounted for some of the market cap increase ($6 of $12 billion) over the past fortnight. T-Mobile remains the second most valuable telecom company in the world after China Mobile (see rating here), with four of the five most sensible telecom operators ranking second through fifth. The only catalyst, as we’ll see below, is the construction of a broadband festival, which is likely to have a net negative impact. an effect on overall valuations (ideal for consumers, not so much for investors).
Google held its annual I/O meeting last week, and artificial intelligence (AI) in the spotlight. In a blog post, the company summarized the hundred most practical display ads (some of which debuted on the blog). NotebookLM Audio Presentations Segment Query Demo (it’s 14 minutes into this YouTube video with Josh Woodward, VP of Google Labs). If you’re skeptical about the benefits of AI, look at the NotebookLM segment of connected video. Assume that it comes to fruition as has been demonstrated, and think about how it will replace the learning process. If this demonstration becomes a reality, learning, especially in the fields of math and science, will fundamentally replace it.
Speaking of AI, content aggregator and network forum Reddit announced a strategic partnership with Open AI, which will integrate Reddit feeds into OpenAI’s large language model (LLM). There are more main points here, but this non-exclusive deal is expected to boost Reddit’s money. balance (we assume OpenAI is paying a maximum value for this exclusive content), while OpenAI’s ChatGPT product. It has also made OpenAI CEO Sam Altman very rich (his 7. 6% stake in Reddit is now worth more than $750 million; main points here and here).
On the broadband front, AT
We have here a full summary of this information, our conclusion is a question: does the analyst network provide AT?
The other thing that emerges from this report is that the West is not developing as fast as it used to. This hurts Lumen and, to a lesser extent, Cox. Look for more information and highlights in next week’s interim report.
The effects of the first quarter of telecommunications are over and the digestion procedure has begun. The first post-results primary convention was held last week at MoffettNathanson. Many companies were present, accounting for four of the top five telecommunications companies.
Brian Roberts, CEO of Comcast, opened the convention by passionately defending its broadband strategy (transcript here), which included the following comment: How do you adapt to this new competitive reality?Bid your time and start developing again. And that’s the kind of market we’re in now.
After the discussion about volume and rate expansion ended (Comcast’s assumption that broadband ARPU expansion will adjust for inflation is optimistic), Brian discussed two corresponding products: wireless and a new product called Stream Saver:
“We’re very focused on adding costs to broadband, and wireless is one of the tactics we use to achieve that. Another way, and anything that I’m going to mention today that Dave [Watson, chairman and CEO of Comcast Cable] is going to communicate in more detail in the next few days, next week, is what other tactics can we help a customer if they take our broadband products. And this month we’re introducing something called Stream Saver and Stream Saver will be available to all customers, not just one segment or another. So if you’re an Xfinity broadband customer, Xfinity TV customer, Stream Saver works for you. If you are a NOW [prepaid product] customer, there will be a NOW Stream Saver. And Stream Saver is Peacock, Netflix, and Apple TV. And all three products will be sold at a particularly discounted price compared to anything else on the market today and will be available to all of our customers. And this is a value, not an introductory value. And we’ll reveal all of this and it’s going to be available this month.
That’s a lot of news. Comcast has been silent on the issue of partnerships (outside of Xumo) and bundles so far. Here’s what they face (dotted shapes imply which apps are covered by bundles):
Note: For those who missed last week’s news, the “super sports channel” announced through ESPN, Fox and Warner Brothers/Discovery will be called Venu Sports (announcement ESPN. com here).
The included content box is getting fuller and fuller. Verizon lately offers a Netflix and Max plan for $10 a month (both with ads). They also offer Apple TV as a component of the Apple-centric plan and still come with the Disney package in some postpaid packages.
T-Mobile is the “OG” of the telecommunications group. The Un-carrier moves of “MLB. TV” and “Netflix on Us” from 2016 and 2017 were groundbreaking, followed by Apple TV in 2021 and Hulu (with ads) this year. However, inclusion in the main offerings has put pressure on margins and the company reduced its offerings earlier this year. T-Mobile is looking to position the company as a leader in premium networks, and given its good luck to date, it wants the bundle less than it did in 2017.
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Not to be outdone through Verizon, Disney is only aggressively selling its bundle (Disney, Hulu, and ESPN), but will now integrate Max into a new bundle (announcement here: the product will be unveiled this summer).
Priced at $30 to $40 per month, it will integrate 14 sports networks into a single app. If it’s well-organized and fairly profitable (and if it’s introduced at the start of school soccer). and NFL seasons), will take a significant share of the streaming market. This “network” obviously decreases the cost of sports on Peacock, Paramount (CBS), and Amazon Prime.
Can Comcast win? They can do this with a little help from their friends. Comcast’s new package will be announced through Xumo’s partners, Charter and Mediacom, as well as Xfinity partners Altice and Cox Communications (the “big discount” Brian discussed in his quote extends to those partners as much as possible). Timing is everything, and with Olympics politics starting July 26, Peacock is well-positioned with expanded policy. But efforts will have to be coordinated.
More main points about Stream Saver will be welcome. Until then, yes, we’ll be including more Netflix (and Max) in our packages.
That’s it for this week. Thanks again for all your referrals. In two weeks, we’ll be looking at capital budgets and will probably have a special update on Jim’s new CEO position. Until then, if you have friends who would like to participate. In email distribution, ask them to send an email to [email protected] and we will list them (or they can register directly through the website).
In the meantime, move on to Sporting KC, Kansas City Royals, and Davidson Baseball!