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Facebook to launch pre-roll ads; Disney, Fox execs eye streaming opportunities

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Facebook to launch pre-roll ads; Disney, Fox execs eye streaming opportunities

Top News

* Facebook Inc. will begin testing ads that run at the start of videos on its Watch hub and other video-centric areas of the social networking site starting next year. The testing will initially start with 6-second pre-roll ads, which will not run before videos on the site's News Feed, according to a company blog post.

* With the pending sale of its movie and TV studio business, its international assets and cable and regional sports networks to Walt Disney Co. in a stock deal valued at $52.4 billion, the new 21st Century Fox Inc. will emerge as a more focused, U.S.-centric entity. Speaking during a conference call discussing the deal, Fox executives said the remaining assets of the company, or "New Fox," is likely to offer its content and channels via direct-to-consumer distribution alongside traditional distribution methods.

* In a widely expected yet highly contentious move, the Federal Communications Commission approved a major overhaul to its net neutrality regulations that will lessen the agency's role in regulating internet service providers, undoing a major change enacted two years earlier under the prior Democratic administration. The commission voted 3-2 along party lines to adopt Republican Chairman Ajit Pai's order overturning the Open Internet Order of 2015.

Internet & OTT

* While extolling the virtues of the expanded international reach and enhanced sports holdings that the company's deal for a range of Fox assets will bring, Disney Chairman and CEO Bob Iger left little doubt that the key driver behind the transformative transaction is boosting the company's direct-to-consumer streaming offerings.

* Pandora Media Inc. introduced an ad-supported option for users to access on-demand music without having to upgrade to a paid premium subscription. Users who search for a specific song, album or playlist on the music streaming platform will now receive the option to view a 15-second video ad to unlock a Pandora Premium listening session.

* T-Mobile US Inc.'s purchase of internet TV company Layer3 TV Inc. could put the mobile carrier in the middle of a hotly contested fight over the future of digital TV. While few details are available about the TV offering from the companies that T-Mobile CEO John Legere promises would "bring together the best of home and mobile" video, experts generally expect a highly competitive strategy from the combined entity.

Technology

* While the information technology sector has been plagued by bad press over data breaches and other issues, the industry has attracted much more positive scrutiny from asset managers weighing companies' environmental, social and governance metrics. An S&P Global Market Intelligence analysis of select ESG exchange-traded funds focused on U.S. equity markets found that four out of six funds were heavily weighted to the information technology sector.

* Amazon.com Inc. will again start selling Apple Inc.'s Apple TV and Google Inc.'s Chromecast devices on its online store, CNET reports, citing an Amazon spokeswoman. The video-streaming devices, which compete with Amazon's own Fire TV, were removed from the company's website in late 2015 over claims that they did not work very well with the online retail giant's Prime Video service. The development comes just one week after Apple launched a Prime Video app on Apple TV, while Google pulled YouTube off Amazon devices.

* DISH Network Corp. soft-launched a new AirTV device that allows users to watch local over-the-air channels on TVs and mobile devices in and out of the home. The device, which costs $119.99, plus $8.99 for shipping, is also integrated with DISH's Sling TV OTT TV service. DISH is expected to make a formal announcement about the product during CES in January next year, Multichannel News reports, citing a DISH official.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng slipped 1.09% to 28,848.11, and the Nikkei 225 dropped 0.62% to 22,553.22.

In Europe, around midday, the FTSE 100 was up 0.03% to 7,450.49, and the Euronext 100 slid 0.41% to 1,034.23.

On the macro front

The 3-year note settlement report, the 10-year note settlement report, the 30-year bond settlement report, the Empire State Mfg Survey, the Industrial Production report, the Atlanta Fed Business Inflation Expectations report, the Baker-Hughes Rig Count and the Treasury International Capital report are due out today.

Featured news

The Daily Dose Europe: Deutsche Telekom, Ericsson ink 5G deal; Spotify, Deezer seek fair competition: Deutsche Telekom taps Ericsson for its 5G network infrastructure, while European platforms, such as Spotify and Deezer, are calling for fair competition within the EU.

The Daily Dose Asia-Pacific: Disney's Fox purchase includes Star India; Youku inks deals with NBCU, Sony: Walt Disney's deal to acquire 21st Century Fox will include Star India, while Alibaba Group's Chinese video streaming service Youku unveiled major licensing agreements with NBCUniversal and Sony Pictures Television.

Hires and Fires: Fox Networks Group names new COO; Ive returns to lead Apple's design team: 21st Century Fox unit Fox Networks Group promoted Brian Sullivan to company president and COO, while Jonathan Ive has returned to tech giant Apple as its chief design officer.

Hires and Fires Europe: RTL Group co-CEO steps down; Nokia COO quits: S&P Global Market Intelligence presents a biweekly rundown of executive and board changes in the European media and communications industries.

Q&A: Video advertising executive: Momentum growing in addressable TV ad market: The convergence of linear TV and digital video is at full steam. S&P Global Market Intelligence spoke with the U.K. managing director at video advertising company Teads to discuss the challenges and opportunities for the advertising industry.

SoftBank invests in US real estate startup; South Korea to spend US$2B on tech: S&P Global Market Intelligence provides a roundup of recent investment deals and updates in the Asia-Pacific technology, media and communications sector.

Featured research

Economics of Networks: Walt Disney announces 4th-largest cable network deal in history: Walt Disney announced the fourth-largest cable network deal in history, acquiring select assets from 21st Century Fox, and the multiple is eye-popping given recent cord cutting and cord shaving.

Broadcast Investor: Retrans per sub rates up 27% in Q3 and YTD '17: Based on analysis of 13 publicly traded U.S. TV station groups, third-quarter retrans per sub averaged 26.5% year-over-year growth to an estimated $1.39 per subscriber on a station/network basis and $1.77 per subscriber on a market-level basis.

Economics of TV & Film: Disney/Fox Deal: Is there a place for 20th Century in Disney's studio strategy?: With Walt Disney's deal to acquire a host of assets from 21st Century Fox, there is a chance we could be witnessing the end of a studio with roots going all the way back to 1935.

Economics of TV & Film: Kagan Box Office Report – Week 50: It appears that the 2017 domestic box office year will end on a positive note, with week 50 results continuing a growth streak now four weeks long. Total week 50 U.S. box office was up 4.0% from $113.3 million in 2016 to $117.8 million in 2017.

Economics of TV & Film: Breaking down premium networks' content spend: Premium networks may have launched with a focus on theatrical movies, but today original content has become an integral part of their business.

Broadcast Investor: Satellite radio projections: Sirius XM's tech investments fuel future growth: Over the last few years, Sirius XM has benefited from a healthy auto market while investments outside of its core vehicle-centric service are maturing. Its total revenue is set to reach $5.81 billion in 2018 and $8.24 billion by 2027.

Global Multichannel: Insiders discuss importance of data control for addressable advertising on TV: Panelists at the Future TV Advertising Forum held Dec. 6-7 in London said it was important for stakeholders to leverage and preserve their own proprietary data to compete with digital players.

Economics of Networks: Murdochs cut deal to sell assets to Disney at a hefty 11.9x cash flow multiple: Once again, Rupert Murdoch has proved he is a king of value creation, cutting a deal Dec. 14 where Walt Disney Co. will buy some of the crown jewels of the media industry from 21st Century Fox for $66.1 billion.

Economics of Internet: Redbox On Demand enters crowded transactional space: Redbox launched a rental and electronic sell-through service to the wider public Dec. 13 after more than a year of testing.

Consumer Insights: OTT video drives cord cutting in China; less so in South Korea: Over-the-top video is becoming a viable replacement for pay TV services in China, whereas free-to-air broadcast TV programming remains the main pay TV alternative in South Korea.

Multichannel Trends: Broadband competition key to risk/reward of net neutrality's demise: The dismantling of net neutrality may open new revenue possibilities for wireline providers, but while federal regulators are clearing the path for paid prioritization, competitive dynamics potentially complicate a blank check for ISPs.

The Daily Dose is updated as of 7 a.m. ET. Some external links may require a subscription.