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S&P's Amobi on Internet Video Spurring Shift in Pay TV (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleventh, Rio to Washington,
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  Speaker 1: a look at the US pay television industry. We're gonna
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  Speaker 1: talk about skinny bundles and the competitors. Will Amazon and
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  Speaker 1: Dish be the winners? But right now let's go to
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  Speaker 1: Charlie Pellett in the Bloomberg news room for Bloomberg Business Flag.
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  Speaker 1: Thank you very much, pim Fox Fox are advancing, heading
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  Speaker 1: shares they are Horror by one point one percent. GE
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  Speaker 1: the impact of a sluggish economy. But GE shares are
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  Speaker 1: trading lower. They're down now by one point nine percent.
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  Speaker 1: GE sold fewer locomotives and less oil field equipment. This
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  Speaker 1: ticket industrial products. Karen Ubelhardt is a senior analyst at
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  Speaker 1: Bloomberg Intelligence. Actually thought it was a good quarter. They
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  Speaker 1: did beat expectations. Oil and gas was very weak, but
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  Speaker 1: I actually was worried about it actually even being weaker.
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  Speaker 1: Uh yeah, I mean the stocks had a decent run.
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  Speaker 1: I think it's more about expectations than it is about
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  Speaker 1: actual results. I think the results were pretty good. Honeywell
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  Speaker 1: International cut its twenty six sales forecast amidst sluggish global
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  Speaker 1: Honeywell International down two point six percent. Sketcher's USA and
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  Speaker 1: VF Corps posting weaker second quarter results than analysts predicted,
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  Speaker 1: assigned the shaky global economy prompted shoppers to put off
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  Speaker 1: purchases of sneakers and jeans. Sketchers down twenty two point
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  Speaker 1: four percent. Right now, shares A VF Corps are trading
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  Speaker 1: LAWA by nine tenths of one percent. Equities higher S
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  Speaker 1: and P five hun Did It Index up seven to
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  Speaker 1: seventy two, a gain. There are four tenths of one
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  Speaker 1: percent down, Industrial is up twenty eight, a gain of
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  Speaker 1: two tenths of one percent. NAS stack of twenty five,
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  Speaker 1: a gain of five tenths of one percent, Gold down
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  Speaker 1: seven twenty benced, THET three A dropped. There are five
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  Speaker 1: tenths of one percent, and crude oil thirty of barrel
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  Speaker 1: now West Texas Intermediate Town one percent to thirty two
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  Speaker 1: on Wall Street. Now a look at the other stories
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  Speaker 1: making news. Thank you Charlie from the Bloomberg News room.
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  Speaker 1: I'm Rami in essentio. Munich. Police say there are several
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  Speaker 1: Democrats turn. Here's Amy Morris from the Bloomberg Washington newsroom.
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  Speaker 1: Bloomberg Congressional reporter Eric Wawson says he is watching for
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  Speaker 1: Equal pay will also be emphasized. But if you looked
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  Speaker 1: and we thank you and again recapping S and P
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  Speaker 1: five Hunted Index up seven to two, a gain narrow
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  Speaker 1: four tenths of one percent. I'm Charlie Pellet and that's
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  Speaker 1: a Bloomberg business flash. You're listening to Stock with Kathleen
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  Speaker 1: on Bloomberg Radio. Netflix is putting pressure on traditional pay
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  Speaker 1: television providers such as Comcast. At the same time, these
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  Speaker 1: cable companies are fighting with satellite providers and other competitor
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  Speaker 1: It is in order to attract a shrinking customer base.
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  Speaker 1: Here to tell us more about trends in the US
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  Speaker 1: pay television industry. Tuna Amobi, equity analyst for SMP Capital
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  Speaker 1: I Q Tuna, thanks very much for being with me
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  Speaker 1: tell us about these trends and the competition that is
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  Speaker 1: coming from non traditional television broadcasters. Hi Pox, Hi team,
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  Speaker 1: good afternoon, Thanks for having me on the show. Um So,
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  Speaker 1: I guess you know. We're seeing a trend now of
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  Speaker 1: consumers increasingly sobstitute in their traditional pay TV packages for
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  Speaker 1: online video. Um. Some of this reflects the maturation of
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  Speaker 1: the USA TV landscape. Um also the fact that cable
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  Speaker 1: bills have been rising much faster than inflation, so consumers
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  Speaker 1: have been increasingly looking for cheaper alternatives like Netflix, and
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  Speaker 1: now we're seeing a whole new generation of skinny cable
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  Speaker 1: bundle packages with Internet. So I think, um, the traditional
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  Speaker 1: pay TV companies are getting a run of their money
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  Speaker 1: because their customer bases declining or at least very mature,
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  Speaker 1: and we're seeing um, you know, these up starts, you know,
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  Speaker 1: kind of chipping away. What's what if you could define
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  Speaker 1: what is the term skinny bundle or skinny package, what
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  Speaker 1: does that mean? Well, it's just the term to refer
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  Speaker 1: to slim down programming packages. So if you think about
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  Speaker 1: the average um, you know, viewer gets you know, literally
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  Speaker 1: hundreds of channels, but studies have shown that consumers will
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  Speaker 1: only watched just a handful of those. So the thinking is,
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  Speaker 1: why should consumers continue to pay for um, literally hundreds
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  Speaker 1: or dollars of channels at the minimum that they're not
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  Speaker 1: even watching. So that's why we're seeing more customized offerings,
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  Speaker 1: so called skinny bundles that you know, you can basically, um,
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  Speaker 1: you know, get customized packages in some respects, including some
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  Speaker 1: of the most watched you know programming channels for much
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  Speaker 1: cheaper monthly subprison fees. To tell us about Amazon and
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  Speaker 1: what you foresee their programming will be like in the
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  Speaker 1: next couple of years. UM, Well, seen, we've seen Amazon
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  Speaker 1: really you know, elevate their their game in terms of
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  Speaker 1: their video offering. UH. So, not only have they rotcheted
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  Speaker 1: up their original programming investments in the last several years, UM,
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  Speaker 1: we're also seeing them trying to customize some of their
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  Speaker 1: offerings because recently they just launched you know, a stand
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  Speaker 1: alone streaming offering, so you no longer need to be
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  Speaker 1: a prime subscriber to to be able to get the
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  Speaker 1: Amazon you know video. This is an aim that had
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  Speaker 1: to have competition with Netflix. So while they're still lagging Netflix,
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  Speaker 1: Amazon in terms of the uh the the array of content. UM.
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  Speaker 1: I think they really have made a significant amount of
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  Speaker 1: you know effort in the last several years to at
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  Speaker 1: least close from ground and we're seeing their membership um
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  Speaker 1: grow significantly thanks in large parts to what they're now
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  Speaker 1: offering on the video side. Tuna is Amazon worth seven
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  Speaker 1: forty eight dollars a share. It's currently up a little
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  Speaker 1: bit more than a half a percent today. Well, you know,
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  Speaker 1: I think that's a very good question that we struggle with.
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  Speaker 1: We certainly still have um, you know, by recommendation on
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  Speaker 1: on Amazon. Um. You know, I think that frankly, I
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  Speaker 1: think that we we see quite some offsite, albeit relatively moderate,
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  Speaker 1: from current levels. UM. There's any number of ways you
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  Speaker 1: can justify that valuation. Right, So there's this um Amazon
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  Speaker 1: web services that you know is growing and leafs and
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  Speaker 1: bounds which could be spun off down the road, we think.
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  Speaker 1: And then they're also getting share um you know from
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  Speaker 1: traditional retailers like wal Mart and Target, and just recently
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  Speaker 1: we saw this huge success from Prime Day, which really
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  Speaker 1: really said inbar in terms of what you can expect
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  Speaker 1: and how you can expect Amazon to you know, customized
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  Speaker 1: marketing offering. So it's all about you know, convenience and
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  Speaker 1: selection and price. When you talk about Amazon, I think
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  Speaker 1: they're doing a great job in that respect. To know,
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  Speaker 1: why do you consider Sony Corporation s n E is
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  Speaker 1: the symbol of the American Depository received Why do you
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  Speaker 1: think that Sony is worth buying? Well, I have to
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  Speaker 1: tell you Sony, they conglomerate. UM, I think they really
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  Speaker 1: have turned around or kind of reinvented their um you know,
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  Speaker 1: struggling core electronics business. So now they're you know, shifting
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  Speaker 1: towards more kind of more kind of mobile and customized devices,
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  Speaker 1: and they've done a pretty decent job in that. But
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  Speaker 1: I think more importantly, I think Sonny is really made
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  Speaker 1: some strides on the entertainment side. PlayStation View, for example,
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  Speaker 1: is one of those skinny packages that have emerged over
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  Speaker 1: the past year and surprisingly getting some traction they against
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  Speaker 1: some of these other competitors. So I think they really
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  Speaker 1: try to reinvent their their offerings. And keep in mind
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  Speaker 1: when you say PlayStation View, it's not really about PlayStation
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  Speaker 1: on itself. It's literally content that's made available across you know, dozens,
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  Speaker 1: if not hundreds of devices, and they've been able to
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  Speaker 1: really get subtraction with the content providers. Thank you very much. Tuna,
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  Speaker 1: a mobi equity analyst for S and P, joining us
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  Speaker 1: like giving us the details of trends in the pay
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  Speaker 1: television industry in the United States. The shares of Sony
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  Speaker 1: the a d r s UP todays thirty dollars one cents.
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  Speaker 1: The stock of Sony up more than twenty two so
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  Speaker 1: far this year, This is taking Stock, I'm pim Fox,
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