WEBVTT - S&P's Amobi on Internet Video Spurring Shift in Pay TV (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh, Rio to Washington,

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<v Speaker 1>d C, Bloomberg to Boston, Bloomberg twelve to San Francisco,

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<v Speaker 1>dot com. This is taking stock, coming upon taking stock,

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<v Speaker 1>a look at the US pay television industry. We're gonna

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<v Speaker 1>talk about skinny bundles and the competitors. Will Amazon and

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<v Speaker 1>Dish be the winners? But right now let's go to

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<v Speaker 1>Charlie Pellett in the Bloomberg news room for Bloomberg Business Flag.

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<v Speaker 1>Thank you very much, pim Fox Fox are advancing, heading

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<v Speaker 1>toward records, the DAL, the SMP, NEZ, dang all gaining.

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<v Speaker 1>Verizon shares rising on Yahoo deal speculation. Right now we

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<v Speaker 1>have got shares a Verizon up by one percent. Yahoo

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<v Speaker 1>shares they are Horror by one point one percent. GE

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<v Speaker 1>report had second quarter profit to beat analysts estimates. Those

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<v Speaker 1>surging sales and energy units helped the industrial giant counter

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<v Speaker 1>the impact of a sluggish economy. But GE shares are

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<v Speaker 1>trading lower. They're down now by one point nine percent.

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<v Speaker 1>GE sold fewer locomotives and less oil field equipment. This

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<v Speaker 1>global economic uncertainty took a toll on demand for big

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<v Speaker 1>ticket industrial products. Karen Ubelhardt is a senior analyst at

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<v Speaker 1>Bloomberg Intelligence. Actually thought it was a good quarter. They

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<v Speaker 1>did beat expectations. Oil and gas was very weak, but

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<v Speaker 1>I actually was worried about it actually even being weaker.

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<v Speaker 1>Uh yeah, I mean the stocks had a decent run.

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<v Speaker 1>I think it's more about expectations than it is about

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<v Speaker 1>actual results. I think the results were pretty good. Honeywell

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<v Speaker 1>International cut its twenty six sales forecast amidst sluggish global

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<v Speaker 1>growth and lower demand for energy related products and services.

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<v Speaker 1>Honeywell International down two point six percent. Sketcher's USA and

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<v Speaker 1>VF Corps posting weaker second quarter results than analysts predicted,

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<v Speaker 1>assigned the shaky global economy prompted shoppers to put off

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<v Speaker 1>purchases of sneakers and jeans. Sketchers down twenty two point

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<v Speaker 1>four percent. Right now, shares A VF Corps are trading

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<v Speaker 1>LAWA by nine tenths of one percent. Equities higher S

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<v Speaker 1>and P five hun Did It Index up seven to

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<v Speaker 1>seventy two, a gain. There are four tenths of one

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<v Speaker 1>percent down, Industrial is up twenty eight, a gain of

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<v Speaker 1>two tenths of one percent. NAS stack of twenty five,

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<v Speaker 1>a gain of five tenths of one percent, Gold down

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<v Speaker 1>seven twenty benced, THET three A dropped. There are five

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<v Speaker 1>tenths of one percent, and crude oil thirty of barrel

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<v Speaker 1>now West Texas Intermediate Town one percent to thirty two

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<v Speaker 1>on Wall Street. Now a look at the other stories

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<v Speaker 1>making news. Thank you Charlie from the Bloomberg News room.

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<v Speaker 1>I'm Rami in essentio. Munich. Police say there are several

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<v Speaker 1>people dead and wounded in an attack on a mall.

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<v Speaker 1>Police also say the shooter or shooters are now on

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<v Speaker 1>the run. This man works at a nearby gas station.

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<v Speaker 1>Are parios everybody are running around. Train service has been

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<v Speaker 1>halted after reports at the gunmen or gun men tried

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<v Speaker 1>to flee by train. Donald Trump met with campaign volunteers

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<v Speaker 1>this morning, offering praise and thanks. Trump says he'll benefit

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<v Speaker 1>from the Democratic Party's poor treatment of Bernie Sanders and

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<v Speaker 1>Bernie was tough. Bernie was stuff. We're gonna get a

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<v Speaker 1>lout of the Bernie voters by the woman because they

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<v Speaker 1>didn't treat Bernie right. They didn't treat him right. Now

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<v Speaker 1>that the Republican National Convention has wrapped up, it's the

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<v Speaker 1>Democrats turn. Here's Amy Morris from the Bloomberg Washington newsroom.

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<v Speaker 1>Bloomberg Congressional reporter Eric Wawson says he is watching for

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<v Speaker 1>the theme of the convention, any specific policies that might

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<v Speaker 1>unite Democrats. We know that minimum wage is a major one.

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<v Speaker 1>Equal pay will also be emphasized. But if you looked

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<v Speaker 1>at the way the platform came to go, there was

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<v Speaker 1>a major fight on trade, for example. The platform remains

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<v Speaker 1>neutral on that, Wawson says. While Democratic senators do plan

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<v Speaker 1>to be in Philly on the House side, their election

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<v Speaker 1>contests are just too close. Many House members planning to

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<v Speaker 1>stay away. Amy Moore is Bloomberg Radio Washington, and the

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<v Speaker 1>New Jersey town made famous by the Jersey Shore reality

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<v Speaker 1>TV series, is ready for some quiet time on its beaches.

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<v Speaker 1>Seaside Heights is banning speakers, boom boxes, and any other

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<v Speaker 1>loud music from its beaches beginning today. It's part of

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<v Speaker 1>a sixty day experiment Global News twenty four hours a day,

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<v Speaker 1>powered by more than journalists and analysts in more than

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<v Speaker 1>one under twenty countries. I'm Ramie in essentio. This is Bloomberg, Charlie,

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<v Speaker 1>and we thank you and again recapping S and P

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<v Speaker 1>five Hunted Index up seven to two, a gain narrow

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<v Speaker 1>four tenths of one percent. I'm Charlie Pellet and that's

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<v Speaker 1>a Bloomberg business flash. You're listening to Stock with Kathleen

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<v Speaker 1>on Bloomberg Radio. Netflix is putting pressure on traditional pay

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<v Speaker 1>television providers such as Comcast. At the same time, these

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<v Speaker 1>cable companies are fighting with satellite providers and other competitor

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<v Speaker 1>It is in order to attract a shrinking customer base.

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<v Speaker 1>Here to tell us more about trends in the US

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<v Speaker 1>pay television industry. Tuna Amobi, equity analyst for SMP Capital

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<v Speaker 1>I Q Tuna, thanks very much for being with me

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<v Speaker 1>tell us about these trends and the competition that is

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<v Speaker 1>coming from non traditional television broadcasters. Hi Pox, Hi team,

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<v Speaker 1>good afternoon, Thanks for having me on the show. Um So,

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<v Speaker 1>I guess you know. We're seeing a trend now of

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<v Speaker 1>consumers increasingly sobstitute in their traditional pay TV packages for

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<v Speaker 1>online video. Um. Some of this reflects the maturation of

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<v Speaker 1>the USA TV landscape. Um also the fact that cable

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<v Speaker 1>bills have been rising much faster than inflation, so consumers

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<v Speaker 1>have been increasingly looking for cheaper alternatives like Netflix, and

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<v Speaker 1>now we're seeing a whole new generation of skinny cable

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<v Speaker 1>bundle packages with Internet. So I think, um, the traditional

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<v Speaker 1>pay TV companies are getting a run of their money

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<v Speaker 1>because their customer bases declining or at least very mature,

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<v Speaker 1>and we're seeing um, you know, these up starts, you know,

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<v Speaker 1>kind of chipping away. What's what if you could define

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<v Speaker 1>what is the term skinny bundle or skinny package, what

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<v Speaker 1>does that mean? Well, it's just the term to refer

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<v Speaker 1>to slim down programming packages. So if you think about

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<v Speaker 1>the average um, you know, viewer gets you know, literally

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<v Speaker 1>hundreds of channels, but studies have shown that consumers will

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<v Speaker 1>only watched just a handful of those. So the thinking is,

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<v Speaker 1>why should consumers continue to pay for um, literally hundreds

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<v Speaker 1>or dollars of channels at the minimum that they're not

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<v Speaker 1>even watching. So that's why we're seeing more customized offerings,

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<v Speaker 1>so called skinny bundles that you know, you can basically, um,

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<v Speaker 1>you know, get customized packages in some respects, including some

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<v Speaker 1>of the most watched you know programming channels for much

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<v Speaker 1>cheaper monthly subprison fees. To tell us about Amazon and

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<v Speaker 1>what you foresee their programming will be like in the

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<v Speaker 1>next couple of years. UM, Well, seen, we've seen Amazon

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<v Speaker 1>really you know, elevate their their game in terms of

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<v Speaker 1>their video offering. UH. So, not only have they rotcheted

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<v Speaker 1>up their original programming investments in the last several years, UM,

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<v Speaker 1>we're also seeing them trying to customize some of their

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<v Speaker 1>offerings because recently they just launched you know, a stand

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<v Speaker 1>alone streaming offering, so you no longer need to be

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<v Speaker 1>a prime subscriber to to be able to get the

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<v Speaker 1>Amazon you know video. This is an aim that had

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<v Speaker 1>to have competition with Netflix. So while they're still lagging Netflix,

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<v Speaker 1>Amazon in terms of the uh the the array of content. UM.

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<v Speaker 1>I think they really have made a significant amount of

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<v Speaker 1>you know effort in the last several years to at

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<v Speaker 1>least close from ground and we're seeing their membership um

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<v Speaker 1>grow significantly thanks in large parts to what they're now

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<v Speaker 1>offering on the video side. Tuna is Amazon worth seven

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<v Speaker 1>forty eight dollars a share. It's currently up a little

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<v Speaker 1>bit more than a half a percent today. Well, you know,

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<v Speaker 1>I think that's a very good question that we struggle with.

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<v Speaker 1>We certainly still have um, you know, by recommendation on

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<v Speaker 1>on Amazon. Um. You know, I think that frankly, I

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<v Speaker 1>think that we we see quite some offsite, albeit relatively moderate,

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<v Speaker 1>from current levels. UM. There's any number of ways you

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<v Speaker 1>can justify that valuation. Right, So there's this um Amazon

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<v Speaker 1>web services that you know is growing and leafs and

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<v Speaker 1>bounds which could be spun off down the road, we think.

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<v Speaker 1>And then they're also getting share um you know from

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<v Speaker 1>traditional retailers like wal Mart and Target, and just recently

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<v Speaker 1>we saw this huge success from Prime Day, which really

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<v Speaker 1>really said inbar in terms of what you can expect

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<v Speaker 1>and how you can expect Amazon to you know, customized

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<v Speaker 1>marketing offering. So it's all about you know, convenience and

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<v Speaker 1>selection and price. When you talk about Amazon, I think

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<v Speaker 1>they're doing a great job in that respect. To know,

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<v Speaker 1>why do you consider Sony Corporation s n E is

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<v Speaker 1>the symbol of the American Depository received Why do you

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<v Speaker 1>think that Sony is worth buying? Well, I have to

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<v Speaker 1>tell you Sony, they conglomerate. UM, I think they really

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<v Speaker 1>have turned around or kind of reinvented their um you know,

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<v Speaker 1>struggling core electronics business. So now they're you know, shifting

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<v Speaker 1>towards more kind of more kind of mobile and customized devices,

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<v Speaker 1>and they've done a pretty decent job in that. But

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<v Speaker 1>I think more importantly, I think Sonny is really made

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<v Speaker 1>some strides on the entertainment side. PlayStation View, for example,

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<v Speaker 1>is one of those skinny packages that have emerged over

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<v Speaker 1>the past year and surprisingly getting some traction they against

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<v Speaker 1>some of these other competitors. So I think they really

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<v Speaker 1>try to reinvent their their offerings. And keep in mind

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<v Speaker 1>when you say PlayStation View, it's not really about PlayStation

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<v Speaker 1>on itself. It's literally content that's made available across you know, dozens,

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<v Speaker 1>if not hundreds of devices, and they've been able to

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<v Speaker 1>really get subtraction with the content providers. Thank you very much. Tuna,

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<v Speaker 1>a mobi equity analyst for S and P, joining us

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<v Speaker 1>like giving us the details of trends in the pay

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<v Speaker 1>television industry in the United States. The shares of Sony

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<v Speaker 1>the a d r s UP todays thirty dollars one cents.

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<v Speaker 1>The stock of Sony up more than twenty two so

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<v Speaker 1>far this year, This is taking Stock, I'm pim Fox,

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<v Speaker 1>my co host Kathleen Hayes on vacation, and this is Bloomberg.

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