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Press Coverage
As Sky exits, RTL may be preparing an entrance
22-Jan-10
Source: The Independent
The failure of BSkyB's legal challenge against the ruling that it must sell down its stake in ITV is certainly a setback, but it has had plenty of time to limit the damage.
If BSkyB's initial aim was to block Virgin's takeover approach to ITV, then it was certainly successful. It must be said that ITV was not at the time a particularly willing suitor for the cable company and we may never know what threat a merged ITV/Virgin Media really would have posed.
Competition regulators were very clear that a scenario where BSkyB could potentially exert influence over ITV's decisions as a sizeable stakeholder was a no-go. One very pertinent discussion ITV management has been having recently is about whether to convert some or all of its digital channels to pay – which would never work without a favourable distribution deal with BSkyB.
At least ITV shares have rallied as the appeals process has taken its course, after the broadcaster's strong end to 2009. BSkyB has also had time to limit the damage by writing off part of the value of its ITV investment.
The question now will be: who will buy BSkyB's shares? The likeliest industry candidate remains RTL, which sees the UK as a key stepping-stone to the global English-language market. The Luxembourg-based giant has made no secret of its view that the UK free-to-air market needs to consolidate. Channel 4 was not interested in merging with RTL's Five (we will see whether the new management team has a rethink), leaving ITV as the only real possibility for RTL.
Tim Westcott is a senior TV analyst at Screen Digest
Game on: the battle for your living room
20-Jan-10
Source: The Independent
Remember the days when football fans had to ring up BSkyB, sign up for a satellite-TV subscription and then wait for a man in a van to come round to install a dish, before they could settle down to watch a Premiership match? Oh, the pace of life was so slow back then, a whole year ago.
These days, if you've already got a Microsoft Xbox under the television, you can get Sky's sports channels through the games console. If you've got a Sony PlayStation3, you can use it to get programmes via the BBC's iPlayer, rather than having to watch them on your laptop. Nintendo Wii users were told last week that they are going to be able to start streaming full-length movies over their console, thanks to a deal with Netflix.
"Deals like these have been proliferating, with social networking and catch-up television also being added to these consoles" said Ed Barton, gaming sector analyst at Screen Digest. "It has always been a strategic imperative of the manufacturers to persuade people that this is not just a games console to be put in teenagers' bedrooms but a box that can go front and centre by the TV in the living room. Executives spend a lot of time thinking of incentives to get users to plug their consoles into a broadband connection – interactive gaming was just a Trojan horse for something much bigger."
Screen Digest's Mr Barton says games consoles have a good shot at being the entertainment hub of the home, even in the face of this competition. They are already displacing one bit of hardware from the living room, and are gunning for another.
"The PS3 is one of the best Blu-Ray players on the market," he said. "This generation of console hardware is removing the DVD player that people characteristically had under the television. But the really big one would be the set-top box that you typically get from your pay-TV provider. There is little in a set-top box that a games console technically couldn't do. For now the two are sitting side by side, but to believe that pay-TV remains essential you have to assume it retains a monopoly of content for its set-top box. It is a monopoly that is now being eroded."
That is why the Wii-Netflix deal last week and the rumoured Xbox-ESPN deal speak to something very big indeed: not just the battle for content between these consoles, but the much wider War For Content between television, consoles and PC-based services.
New Square cash 'hard to not see as buyout money
19-Jan-10
Source: develop
Revelations that Square-Enix this week raised nearly $400 million has left analysts confident that the Tokyo-headquartered group is ready to buy out another rival.
Screen Digest games analyst Ed Barton has told Develop that the money – issued in zero-coupon convertible bonds – is not likely going to be used solely to pay off debt.
"It's hard to see them not using this money for acquisitions," he said, "when they've raised that much cash, already with about $880 million kicking around, it's difficult to see this as rainy-day money."
Barton adds that the timing of Square's move is telling.
"Square is raising debt at an opportune moment; corporate debt is currently relatively cheap," he said. "If it has any requirements for additional capital in the next five years now looks a good time to raise it."
In announcing the move to its investors (pdf here), Square-Enix said that the money will be used to pay off existing debt, as the firm owes around $555 million up to 2015.
Yet Barton adds that, with the company already holding as much as $880 million in its war-chest, Square may be at the beginning stages of another studio acquisition.
"Either Square has a target in mind or it wants serious ammunition for any opportunistic situations which might arise," he said.
Last year Square purchased Eidos for £84.3 million, boosting the firm's variety and appeal of owned IP.
Barton ponders whether Square-Enix will follow in EA's footsteps, with an escalating number of publishers embracing social game studios.
"For an Asian publishing powerhouse, Square has relatively little involvement with browser-based games and games playable over social networks. Yoichi Wada confirmed in December that he has a studio looking into these types of games however an acquisition could accelerate this process dramatically."
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