www.cablespots.net Published Daily For Subscriptions, call 1-888-884-2630 [email protected] $300 Per Year Copyright 2021 Tuesday, May 18, 2021 AT&T DEAL RAMPS UP PRESSURE ON VIACOMCBS, NBCU AS PLAYERS RACE FOR SCALE, SIZE MATTERS ADVERTISER NEWS Now that AT&T has decided to separate WarnerMedia and Ford Motor will temporarily reduce output of the nation’s merge with Discovery, the rest of the media world — par- bestselling vehicle — the F-150 pickup — at its Dearborn ticularly the smaller players — face new pressure to make Truck Plant just days after President Biden is expected to their countermoves. (See story, Page 2) visit a new electric vehicle center nearby as the semiconduc- Even before this deal, CNBC reports, it was clear that Li- tor shortage continues to impact production. The Dearborn, onsgate, MGM, Sony Pictures and AMC Networks were Mich., plant will fall to one shift from three next week as a probably too small to compete in a streaming world where result of the worsening chip shortage. Ford’s other F-150 success depends on a massive store of content and global plant, Kansas City Assembly, will be completely idled that reach. week... Toyota, responding to rivals’ moves, is accelerating But ViacomCBS and Comcast’s NBCUniversal are much its electrification push to target combined global sales of 2 bigger, and probably assumed they had some time — at million battery-electric and fuel cell vehicles a year by 2030. least a year — to see how many subscribers signed up for By then, Toyota Motor Corp. plans to sell 8 million electri- their streaming offerings, Paramount+ and Peacock. fied vehicles globally, including hybrids and plug-in hybrids. “Within the next two years, it’s going to be put up or shut up The goals represent a near quadrupling of the carmaker’s for all of us,” David Zaslav, Discovery’s CEO, who will take worldwide tally in the latest fiscal year, when it sold 2.2 mil- the top job at the combined company, said in December. lion electrified vehicles… At Home’s largest shareholder, “Can you show you’re scaling? Are you going to be a player CAS Investment Partners, has sent a letter to the retailer’s in the U.S.? Are you going to be a player board opposing the sale to private equity around the world?” firm Hellman & Friedman. The retailer That timeline is shorter now. Suddenly, said at the time the deal was announced it both ViacomCBS and NBCUniversal seem expects it to close in Q3 of this year. CAS, subscale as they attempt to put together which owns about 17% of At Home’s com- global streaming services. They aren’t try- mon stock, said the deal “grossly underval- ing to be niche players, such as Starz or ues the Company and deprives stockhold- AMC+. ers of anything resembling a fair premium,” That means both will need more content according to the letter… Chipotle Mexican to compete against Netflix, Amazon Prime Video, Disney Grill, Starbucks, CVS and Target won’t require fully vacci- and the new WarnerMediaDiscovery offering. nated customers to wear masks inside stores, except when The obvious move would be for ViacomCBS and NBCUni- required by law. The policy changes come after the CDC versal to merge. But a combined ViacomCBS/NBCUniversal updated its guidance on mask wearing. Walmart, Costco would have two U.S. broadcast networks — CBS and NBC and Trader Joe’s are also allowing customers to shop with- — housed under the same corporate roof. That won’t fly with out mask if they’re fully vaccinated. Apple, meanwhile, has U.S. regulators. That leaves Comcast and ViacomCBS with announced that its mask policy will remain in place for all four likely options: customers and employees in its U.S. stores. The company Buy. If both companies feel their streaming services can says the evaluation of its policies will be ongoing... Sam’s compete around the world, they can go on global and do- Club is selling men’s and women’s shorts and tops from Gap mestic acquisition sprees. It may take several deals to get to online, according to a recent mailer to club members. Sam’s a scaled position, as they piece together smaller U.S.-based sells apparel from several national brands including Levi’s, assets and larger global media companies. Oshkosh and Champion... Meijer has opened three new Sell. Potential buyers could include Amazon or the newly supercenters in Indiana and Ohio that offer everything from merged WarnerMedia-Discovery. Apple and Netflix continue organic food to general merchandise, including beauty care, to hover along the periphery, but neither company has ever pet products and women’s clothing. The 155,000-square- shown much interest in making big media acquisitions. foot sites are designed to offer one-stop shopping and also Reduce their ambitions. The third option is to throw in the feature delivery, pickup and a Shop & Scan option… Buyers towel on being a global streaming service. Instead, NBCUni- for retailers including Saks Fifth Avenue, Bloomingdale’s, versal and ViacomCBS could license their content to other, Nordstrom, Net-a-Porter and Intermix say women have larger streamers and wind down Paramount+ and Peacock been shopping for summer dresses, tops and other party if they fail to gain global traction. clothes this spring in anticipation of being able to gather with Bundle. ViacomCBS and NBCU could begin bundling their friends again. Women’s Wear Daily says those same buy- streaming services together or finding new streaming part- ers expect shopping for office wear to follow soon... Star- ners to increase global distribution through discounted offer- bucks has filed a patent application for the term “puppuc- ings. The main problem with this strategy is it limits the up- cino,” which refers to small sample cups of whipped cream side for both companies, who won’t be able to compete with that customers order for their dogs. The application indicates larger players for top content and breadth of programming. the coffee giant could put puppuccinos on the menu. AUTO INVENTORY RECEDES FURTHER TO 2.24M WARNERMEDIA, DISCOVERY IN $43B MERGER Like an industrywide game of limbo, dealers and Telecom giant AT&T yesterday announced a deal to combine automakers are bending over backward and otherwise its WarnerMedia content unit with Discovery, paving the contorting themselves to keep up with red-hot consumer way for one of Hollywood’s biggest studios to compete with demand for new vehicles as inventories continue to media giants Netflix and Disney. shrivel up because of production stoppages and supplier Under the agreement, AT&T will unwind its $85 billion shortages, Automotive News reports. acquisition of Time Warner, which closed just under three Inventory levels dropped to just 2.24 million vehicles in years ago and form a new media company with Discovery. April, a 44-day supply at the current selling rate, according The deal would create a new business, separate from AT&T, to data compiled by Cox Automotive subsidiary vAuto. that could be valued at as much as $150 billion, including New-vehicle inventory fell 37% from a year earlier and debt, according to The Financial Times. stood 42% lower than at the same point in 2019. The AT&T said it would receive an aggregate amount of $43 days’ supply estimate was off 75% billion in a combination of cash, debt and from the same point a year earlier, WarnerMedia’s retention of certain debt. when the selling rate was curtailed by If approved by regulators, the deal closed dealerships and supplies were Inventory levels dropped to effectively reverses AT&T’s years-long constrained by halted production amid just 2.24 million vehicles in plan to combine content and distribution the COVID-19 pandemic. April, a 44-day supply at the in a vertically integrated company. The Dealer inventories nationwide have current selling rate. New- companies said the deal is expected to constricted by 420,000 vehicles since vehicle inventory fell 37% close in the middle of 2022. from a year earlier. March, Cox estimates. Inventory of new AT&T said Discovery President and CEO non-luxury vehicles was 1.9 million, a 43- David Zaslav will lead the new company, which will have a new name announced day supply, down from a 58-day supply vAuto the previous month. The luxury-model in coming days. supply fell to 49 days from 60. AT&T owns CNN, HBO and Warner Among automakers that report sales Bros. after it acquired Time Warner, since and inventory levels to the Automotive News Research renamed to WarnerMedia. Discovery’s channels include & Data Center, supplies were tightest at Subaru (16 days) Animal Planet, TLC and the Discovery Channel. and Toyota (23). No automaker was higher than Volvo’s (45). OUTLOOK: PAY-TV REVENUES TO KEEP FALLING Pay-TV revenues are dropping globally, and the U.S. is AMAZON REPORTEDLY IN TALKS TO BUY MGM leading the trend, Digital TV Research forecasts. On the heels of AT&T’s announcement that it is unloading Pay-TV revenues across 138 countries peaked in 2016 at WarnerMedia comes word that Amazon may be looking to $201 billion. They fell to $173 billion in 2020, and with 77 buy the MGM movie studio. countries seeing declines, will decrease to $143 billion by The Information yesterday reported that Amazon is 2026 — despite an increase of 15 million in the number of in talks to acquire the celebrated studio, citing a source pay-TV subscribers during the 2020 to 2026 period. familiar with the situation. U.S. pay-TV revenues peaked at $104 billion in 2015. Such a deal, The Information reported, would be the The U.S. will see the most dramatic decline among all e-commerce giant’s “biggest move yet to expand in countries analyzed — dropping by $23 billion, from $80 entertainment.” billion to $57 billion, between 2020 and 2026. By 2026, the MGM owns a huge film library and several top movie U.S.’s share of global pay-TV revenues will be 40%, down franchises, including James Bond and Rocky. MGM from 52% in 2015. holdings also include the Epix cable channel and Global satellite TV revenues will decline by $16 billion, with a production studio behind such TV shows as The digital cable down $12 billion. Analog cable will lose another Handmaid’s Tale, Fargo, Shark Tank and Survivor. $2 billion, but IPTV losses will be comparatively minor.

FURNITURE SALES CONTINUE YOY RISE IN APRIL STUDY: AT-HOME MEALS TO STAY POST-PANDEMIC Sales from furniture and home furnishings stores came in The eat-at-home trend boosted by the COVID-19 crisis at $45.1 billion during the first four months of 2021, a 45.3% won’t recede anytime soon post-pandemic, according to new research from CPG sales and marketing firm . increase over last year, according to the Department of Acosta After the pandemic ends, 92% of families plan to continue Commerce’s monthly report on retail sales. Furniture sales in April continued to climb with the advanced eating together at home at least as often as — or more often than — they do now, Acosta’s estimate for the seasonally adjusted number coming in at COVID Dining Journey: report found. $11.9 billion in April 2021 compared with $3.97 billion in Eating at Home and Away From Home Online surveys of Acosta’s proprietary shopper community, April 2020, taking into consideration that many retail stores conducted between March and April, showed that eating were closed during this time last year due to the pandemic. together as a family will stay the same for 72% of all Year-over-year growth in the furniture and home furnishings households, while 20% expect to eat together more frequently. store category may reflect ongoing consumer demand in the Almost two-thirds reported that since the coronavirus category and interest in home-related projects, with people outbreak they cook at home more and eat “far more” meals at spending more time at home, Furniture Today says. home, Acosta said. That trend spanned all eating occasions during the day. After the start of the pandemic, 47% of adults PAGE 2 ate breakfast at home daily (vs. 37% pre-COVID), 40% of adults ate lunch at home daily (26% pre-COVID) and 31% www.CableSpots.net Tuesday, May 18, 2021 of families ate dinner at home every day (18% pre-COVID).