TV industry sees digital threats rising  

AUG 8, 20159:56 AM

[SAN FRANCISCO] Is it time for big television to start worrying about digital?

For years, the threats to traditional television have been present, but the digital revolution now appears to be gathering momentum, raising the prospect of shifts in viewing habits which could devastate an industry that has been lucrative for years.

The decades-old model for the industry has been built around cable and satellite TV offering high-priced "bundles" to consumers, and sharing revenue with the operators of cable and broadcast channels.

But viewers today have increasing choices through the Internet. They can subscribe to Netflix, Hulu or Amazon video, pick and choose subscriptions to individual channels like HBO or Showtime, or get slimmed-down packages of channels through new service providers.

See who is talking about BANCO SANTANDER

Last 30 days:

• 340
• 23
• 185

HOT COMPANIES

United Utils Grp +224% messages

• Randgold +126%
• Glencore +94%
• RSA Insurance +92%
• Travis Perkins +82%
• Old Mutual +63%
• Mondi +49%
• Inmarsat +42%
• Intertek +39%
• Schroders +34%

• Randgold +126%
• Glencore +94%
• RSA Insurance +92%
• Travis Perkins +82%
• Old Mutual +63%
• Mondi +49%
• Inmarsat +42%
• Intertek +39%
• Schroders +34%

Some viewers also watch free programs streamed over YouTube or other websites.

The big threat to the industry is from "cord cutting," which has been modest until now. If it accelerates, that could unravel the model which has worked for the industry for years.

After the latest quarterly updates from major television groups, Wall Street investors appeared to be panicking over the future of the industry.

Disney - which owns the broadcast ABC network, and several cable channels such as sports TV group ESPN, saw its shares take an unprecedented nine percent dive after reporting earnings.

While Disney reported a "modest" number of subscriber losses, some investors saw red.

"Investors are reacting to a growing sense of the risk," said Brian Wieser, analyst at Pivotal Research Group.

"The negative perspective is suggesting that the whole bundle, the whole business model is falling apart." Mr Wieser said these fears are "overstated" but that did not stop a bloodbath in media stocks over the past week, with only a modest uptick at the end of the week.

Viacom and 21st Century Fox, which have prominent cable channels, each saw a 17 per cent plunge over two days. Time Warner, owner of cable channels like TBS and TNT, saw a 10 per cent drop.

Neil Macker at the research firm Morningstar said it is not time to panic.

"While we share the concerns around cord-cutting, we note that 96 per cent of sports viewing is done live, providing some defense to the linear channel," he said in a note to clients.

The big question for the industry is how fast the landscape changes.

A study by Deloitte found more than half of American viewers watched films or television programs on streaming video, but only three per cent had cancelled pay TV subscription over the past year and seven per cent were considering such a change.

While sports appears to be anchoring the pay TV model, other segments such as children's channels and programs appear vulnerable.

"The challenges facing linear ad-supported kids networks are greater than in other network genres," said Morgan Stanley analysts in a research note.

"Aggregating kids channels across Viacom, Disney, Time Warner and Discovery, we estimate relevant demo viewership is down 30 per cent from mid-2013 to today versus 12 per cent for broader TV (ex-kids)." Fears appear greatest for Viacom, which owns the Nickelodeon channel known for kid programming like "Dora the Explorer" and "Spongebob Squarepants." "Viacom has long been considered one of the most exposed to risks around the future of the cable bundle," said BMO Capital Markets analyst Daniel Salmon in a research note.

"Viacom's more youth-oriented audience and lack of major sports rights makes its networks more vulnerable to being excluded from a lower-tiered bundle."

The television companies are not sitting still amid the changes. Many are investing heavily in content to make their channels more attractive, or joining the move to streaming.

Disney chief executive Bob Iger said threats from firms like Netflix can be managed with the right programming.

"We look at Netflix actually right now as more a friend than foe because they become an aggressive customer of ours," Mr Iger said on the Disney earnings call.

Others are embracing the shift to digital with their own streaming offerings.

HBO, part of Time Warner, has begun offering the premium channel as a standalone service online, even though this has been losing money so far and may continue to see red ink this year.

CBS, which has its own streaming service as well as one for its Showtime premium channel, says this can generate income for the company.

At Showtime, "every million subscribers equals US$100 million of profit, so it's not a whole lot of subscribers for us to break even," said CBS chief operating officer Joe Ianniello.

AFP

      

Several foreigners held, at least seven killed in Mali hotel siege

      

A file picture dated on Jan 23, 2013 shows Malian forces patrolling through the northern town of Sevare, Mali. 

PHOTO: EPA

AUG 8, 20158:01 AM

[BAMAKO] Several hostages, including a number of foreigners, were caught in a standoff in central Mali on Friday after gunmen stormed a hotel during a shootout with soldiers in which at least five troops and two attackers were killed, the government said.

A Ukrainian hostage managed to escape from the "four or five terrorists" who were still barricaded inside the hotel in Sevare, telling soldiers that he had been with three South Africans and a Russian when the shooting began.

"At around 7am (0700 GMT), a terrorist attack was carried out at the Byblos hotel in Sevare, where a part of the (UN mission) MINUSMA staff is staying," the government said in a statement sent to AFP Friday evening, in the first official comment on the attack.

The statement gave a provisional toll of "five dead, two injured" on the Malian army side and "two killed" on the insurgent side. Seven suspects had been detained, it added.

A military source had earlier said at least eight people had been killed with "three bodies lying in front of the hotel next to a burned-out minibus." One of the attackers was wearing an explosives belt, the source added.

MINUSMA said "a member of MINUSMA"s associate international staff" was killed in the "terrorist attack", without giving the victim's nationality.

The UN mission said the initial target of the attack was a Malian military site.

"The attackers, who were repulsed by the Malian forces, then holed up in a hotel.

"The clashes between the attackers and Malian security forces continued throughout the morning and sporadic fire continues at the hotel and in the neighbourhood," MINUSMA added.

The UN mission said it had sent a Malian rapid response team from the capital Bamako - 620 kilometres to the south - and also "reinforced the security of Sevare-Mopti airport".

It is unclear who the foreigners being held are, though the governments of Russia and Ukraine confirmed earlier they each had a national among the hostages.

A spokesman for the Russian embassy in Mali told RIA Novosti state news agency that the Russian hostage was an employee of UTAir, an aviation company which works with the UN mission MINUSMA.

The diplomat said it was unclear whether the hostages were being held at gunpoint or if the attackers were merely "sheltering there".

French President Francois Hollande said French citizens could also "possibly" be caught up in the attack, while South Africa said it was "aware of the situation".

The hotel is popular with both foreign visitors and troops.

No one has claimed responsibility for the attack, which comes as Mali battles a resurgence in jihadist violence, two years after a French-led offensive routed three Islamist factions from most parts of the country.

Situated only a few kilometres from the regional capital Mopti, Sevare is a key staging post on the road to Mali's desert north which fell to extremists in 2012.

"This hostage-taking is part of the terrorist strategy that Mali and the international community are mobilised against," Malian Communications Minister Choguel Kokalla Maiga told France 24 television.

"The army has completely sealed off the area and the town is in lockdown. They have asked people to stay at home," a local official told AFP, speaking on condition of anonymity.

Sporadic shooting was still heard around the hotel at around 1500 GMT.

Speaking as he welcomed home a Frenchwoman held hostage for nearly six months in Yemen, Hollande said that "in Mali an operation is underway which could possibly involve French nationals" and called on French citizens in danger zones to take "the greatest precautions".

France has over 1,000 soldiers in northern Mali as part of an regional anti-terrorist operation.

MINUSMA said it was liaising with the French forces about the response to the Sevare attack.

It was the third assault in just a week in Mali, which is still struggling to restore stability despite a landmark peace deal agreed in June to end years of unrest and ethnic divisions.

A number of foreigners have been kidnapped by Islamist militants in Mali in recent years, at least two of whom are still being held hostage by Al-Qaeda's front group in the region AQIM.

AQIM and two allied Islamist groups seized control of Mali's north in 2012 before being ousted by French and Malian forces in January 2013.

The insurgents have continued to mount sporadic attacks from their bases in the desert, mainly in the north.

But the attacks have spread since the beginning of the year to the centre of the country and in June to the south near the borders with Ivory Coast and Burkina Faso.

AFP

      

Consumer borrowing in US Increased more than forecast in June   

American consumer borrowing rose more than forecast in June on bigger credit-card balances and a pickup in lending for automobiles. 

PHOTO: BLOOMBERG

AUG 8, 20157:36 AM

[WASHINGTON] American consumer borrowing rose more than forecast in June on bigger credit-card balances and a pickup in lending for automobiles.

The US$20.7 billion increase in total credit followed a revised US$16.5 billion gain in the prior month, Federal Reserve figures showed Friday. The advance pushed borrowing up at a seven per cent rate in the second quarter, the fastest in a year.

Job gains and an improvement in household balance sheets since the last recession are making Americans more comfortable about using credit cards and taking out loans for big-ticket goods such as new cars. The pickup in June borrowing points to sustained consumer spending that will help bolster the economy in the second half of 2015.

The median forecast of 30 economists surveyed by Bloomberg called for a US$17 billion rise in credit after a previously reported US$16.1 billion advance in May.

See who is talking about CARD FACTORY

Last 30 days:

• 58
• 6

HOT COMPANIES

United Utils Grp +213% messages

• Randgold +118%
• RSA Insurance +88%
• Glencore +86%
• Travis Perkins +80%
• Old Mutual +62%
• Mondi +49%
• Inmarsat +47%
• Intertek +39%
• Schroders +37%

• Randgold +118%
• RSA Insurance +88%
• Glencore +86%
• Travis Perkins +80%
• Old Mutual +62%
• Mondi +49%
• Inmarsat +47%
• Intertek +39%
• Schroders +37%

The Fed's consumer credit report doesn't track debt secured by real estate, such as home equity lines of credit and home mortgages.

Revolving debt, which includes credit cards, rose by US$5.5 billion in June, the second-biggest advance since April 2014, after climbing US$1.6 billion the prior month.

Non-revolving debt, such as that for college tuition and the purchase of vehicles and mobile homes, rose US$15.2 billion, the most in three months, after increasing US$14.9 billion.

Loans to buy cars climbed by US$22.1 billion in the second quarter, before adjusting for seasonal variations, while lending to consumers by the federal government for education rose US$1 billion.

Another report Friday showed employers in the US added 215,000 jobs in July as the unemployment rate held at a seven- year low of 5.3 per cent.

BLOOMBERG

      

Wearable technology creeps into the workplace

Physically it was like getting a vaccination; a pain in the hand that was over very quickly," explains Hannes Sjoblad, describing the moment a piercing specialist implanted a microchip under his skin. 

PHOTO: AFP

AUG 7, 201512:32 PM

[NEW YORK] "Physically it was like getting a vaccination; a pain in the hand that was over very quickly," explains Hannes Sjoblad, describing the moment a piercing specialist implanted a microchip under his skin.

The NFC (near-field communication) chip allows the Swede to swipe into his office, set the alarm system, register loyalty points at nearby retailers and access his gym.

Around 15 per cent to 20 per cent of the 250 people working at the Epicenter co-working space in Stockholm where Sjoblad is "Chief Disruption Officer" have opted into the program, which eliminates the need for key-fobs or electronic entry cards. Since announcing it earlier this year, Mr Sjoblad has been flooded with inquiries from companies looking to adopt a similar system. "Security companies, office operators, real estate companies and even military organisations want to see how this technology works," Mr Sjoblad says.

It's all part of a trend toward using technology - usually wearable devices like smartglasses, wristbands, smartwatches and badges rather than implantable ones - to monitor employee movements and improve productivity. The promise of data-driven efficiency can be alluring to the board room, but it comes at a cost: the employee's right to privacy.

"It started with big data discussions around gathering business insights and not having the human accounted for in that data puzzle. Wearable technology can help make the workforce visible in that," says Chris Bauer, Director of Innovation at Goldsmiths, University of London.

Devices must be paired with a powerful back-end system, however.

"Wearables are not useful on their own," adds Guillaume Roques, head of developer relations EMEA at Salesforce. "They have to be part of the move toward a system of intelligence, which combines big data, the cloud and analytics. Connecting them all together is a big challenge."Health and Wellness A key trend is companies using wearable devices to track employee health - giving staff fitness monitors to keep tabs on their activity levels as part of "wellness" programs. This data can be tied into health insurance policy premiums or other incentive programs to reduce healthcare costs.

Oil giant BP, for example, has distributed more than 24,500 Fitbit fitness trackers to staff of its North American business in 2015 alone using such an incentive program.  "These programs are often strongly linked to companies negotiating lower rates on collective insurance policies. Underwriters are more trusting of these devices than the self- reporting of employees," explains Bauer.

According to Gartner around 2,000 companies worldwide offered their staff fitness trackers in 2013, rising to 10,000 in 2014. The firm predicts that by 2016 most companies with more than 500 employees - will offer fitness trackers. Safety Applications In industries with high-risk roles - such as mining and oil and gas - wearables can play a critical role in safety.  Truck drivers at Rio Tinto's coal mines in Hunter Valley, Australia, for example have been using a device called "SmartCap"which looks like a regular baseball cap but has sensors to detect the alertness. It provides an early warning for when a driver is approaching a "microsleep," designed to reduce fatigue-related accidents.

Meanwhile XOEye has developed a set of industrial smartglasses that can capture HD video of complex problems encountered in construction, manufacturing or field services. Two-way communication means that a remote viewer - be it a manager or a technical specialist - can guide or train the wearer from afar. APX Labs is working with Salesforce on a similar system, called Skylight.Operational Efficiencies One of the best established applications for body-worn devices in the workplace is to help streamline logistics. For example, UK supermarket chain Tesco gives armbands to staff in a distribution center in Ireland. These can track the goods being transported across 9.6 miles of shelving, eliminating the need to mark clipboards and giving mangers estimated completion times.

Similarly the "pickers" who work in Amazon warehouses wear GPS tags and have a handheld scanner that tells them the most efficient route to take to collect an item for delivery. Drawbacks While wearable technology can bring huge benefits, they also bring challenges, particularly as devices start to gather more and more personal and biometric data. Consumer-grade gadgets don't always have rigorous encryption and other protections to safeguard personal data, which could leave companies exposed to data leaks or theft.

"We hear about data breaches every week - and it's naive to think that the same won't happen with these miniaturised devices," says technology lawyer Paul Lanois.

There's also the risk of inadvertently creating an oppressive working environment that damages staff morale.  "It can be seen as an intrusive surveillance tool rather than something that improves productivity or performance," explains Bauer.

UK-based data science consultancy Profusion found this out the hard way. It ran a study to see what data employers could glean from wearable devices 24 hours per day, seeking to improve the wellbeing of the workforce. The research involved tracking 171 different metrics including heart rate, activity levels, location and other data taken from smartphone applications.

"One participant found the idea of continuously checking his heart rate made him nervous," says Profusion Chief Executive Officer Mike Weston. Another feared that her line manager would be keeping track of her self-reported stress levels. "She felt uncomfortable being under the microscope." Mr Weston says this shows how careful companies need to be when implementing wearable technology programme. "If there's a creepiness factor around what you're doing, you probably shouldn't be doing it."

BLOOMBER
G