Connectivity Chronicles #20240913

Telecom Market Analysis: Fiber Expansion Race

The telecom industry is witnessing a major shift towards convergence and fiber expansion. Verizon's $20 billion acquisition of Frontier Communications has intensified the "race to fiber," significantly expanding its fiber footprint. AT&T is aggressively pursuing fiber growth by expanding its Gigapower joint venture and forming partnerships with Boldyn Networks, Digital Infrastructure Group, PRIME FiBER, and Ubiquity. Meanwhile, Windstream's Kinetic brand and AT&T are collaborating to offer combined 5G and broadband services across 18 states. These moves are driven by increasing demand for converged connectivity and the need to close the digital divide. Government initiatives like the BEAD program are further fueling this trend. Industry analysts predict continued consolidation as major players seek to acquire fiber assets, with speculation about potential targets.

Media Insights: NFL Drives Peacock Success

Peacock achieved significant viewership milestones over the recent football weekend. The exclusive presentation of the Philadelphia Eagles’ 34-29 victory over the Green Bay Packers in Brazil averaged 14 million viewers, making it the second-most watched live event on Peacock and nearly doubling the Bills-Chargers Peacock exclusive game last December. Additionally, Peacock’s streaming of the NFL Kickoff Weekend games contributed to record-breaking numbers, with the Thursday and Sunday games being the most streamed NFL regular-season games ever on the platform with Average Minute Audiences (AMA) of 4.6 million viewers and 2.8 million viewers, respectively.

Telecom Spotlight: Brightspeed's Fiber Transition

Brightspeed is revolutionizing copper network management by shifting from large-scale retirement petitions to a targeted, customer-focused approach. Instead of waiting for FCC approval to retire copper, Brightspeed proactively upgrades customers with persistent issues to better technology. If fiber is available, customers are switched quickly; if not, they receive a unique wireless service leveraging wholesaled 4G and 5G networks. Brightspeed is aggressively deploying fiber, targeting 90,000 new premises each month and aiming to overbuild 1.8 million of its 6.5 million passings by year-end. CEO Tom Maguire emphasizes that this strategy enhances customer experience and operational efficiency, allowing Brightspeed to reallocate resources from maintaining outdated infrastructure to expanding its fiber network for future growth.

Media Shifts: Sony Eyes Niche Streaming

Sony Pictures Entertainment is considering expanding into genre-specific streaming services, inspired by the success of its anime-based Crunchyroll platform. Speaking at the BofA Securities 2024 Media, Communications, and Entertainment Conference, Vinciquerra noted that the streaming market is consolidating, with only a few general entertainment platforms likely to succeed. He emphasized the potential for niche streaming services to attract passionate audiences, drawing parallels to the evolution of the cable industry. He also predicts significant turmoil in Hollywood over the next 18 to 24 months, with mergers, bankruptcies, and sales expected. He highlights the challenges faced by companies with cable networks, describing them as an “albatross” around their necks. Vinciquerra notes that Sony, which has minimal cable-channel ownership, is better positioned compared to Warner Bros. Discovery and Paramount Global, both of which are struggling with devalued cable businesses and significant debt.

Telecom Innovation: Verizon Embraces D2D

Verizon has dramatically shifted its stance on direct-to-device (D2D) satellite connectivity in just six months. Initially skeptical, the telecom giant now boasts two major satellite partnerships. A $100 million investment in AST SpaceMobile will utilize Verizon's 850 MHz spectrum for D2D services, expected to launch next year. More immediately, Verizon plans to offer emergency SOS service this fall through Skylo, followed by satellite texting in early 2024 for select Android devices.

This pivot puts Verizon in direct competition with T-Mobile's SpaceX partnership and AT&T's satellite ventures. Verizon claims it will be the first to launch a commercial D2D service, marking a significant turnaround from its previous position. The company's newfound enthusiasm for satellite technology extends beyond smartphones to IoT applications like agricultural monitoring. As the D2D landscape evolves rapidly, questions arise about potential future partnerships, especially given SpaceX's limited exclusivity with T-Mobile.

Media Spotlight: WBD's Global Experience Strategy

Warner Bros. Discovery (WBD) has announced a new global structure for its location-based experiences, combining its licensed entertainment and owned and operated teams into a single division called Warner Bros. Discovery Global Experiences. This new division will focus on expanding fan experiences worldwide, leveraging WBD’s intellectual properties like Harry Potter, DC, and Game of Thrones. The goal is to offer more authentic and engaging in-person experiences through theme parks, studio tours, retail destinations, and exhibitions. Simon Robinson, Chief Operating Officer of WBD Studios, will lead this new division and has also appointed two veteran leaders to help execute global strategies and enhance the quality of WBD’s location-based entertainment. This unified approach aims to drive growth and establish WBD as a leader in the creation and operation of fan experiences globally.

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