The rate of pay-TV subscriber declines stabilized Q1, but more important is the conversion rate at which virtual MVPD subscriptions offset linear TV declines, MoffettNathanson analyst Craig Moffett wrote investors Thursday. High conversion rates benefit media companies since they get higher per-subscriber affiliate fees from virtual MVPDs and the future looks brighter when more cord cutters are still paying for a streaming video bundle -- even a skinny one -- than being lost to the pay-TV universe altogether, MoffettNathanson said. Since Q1 2016, the conversion has averaged 83 percent, it estimated, saying the figure has varied notably from quarter to quarter. It estimated the Q1 conversion rate was 69 percent, while the Q4 2017 conversion rate was 125 percent. The rate could decline since many counted as virtual MVPD subscribers are still in their free promotional periods. It said password sharing points to likely declines in conversion rates. For the quarter, traditional pay-TV subscriptions declined at 3.4 percent year over year for the second straight quarter. Including virtual MVPDs, that subscriber drop was 0.5 percent. The cumulative number of cord-cutter and cord-never households hit 14.14 million in Q4.

Disney is “still deep in the regulatory process” of acquiring much of 21st Century Fox (see 1712140038), said CEO Bob Iger on a Tuesday earnings call. “I can't share any more information or engage in further speculation about the deal, except to say that we strongly believe in the value” of the Fox “assets as part of our ongoing strategy to create growth in a very dynamic global marketplace,” said Iger. There was no mention on the call of Comcast’s reported all-cash offer for Fox (see 1805080004). Disney soft-launched the ESPN+ over-the-top service about a month ago with a marketing strategy that’s “relatively modest in nature,” said Iger. He wouldn't disclose statistics on the ESPN+ launch, “except to say that so far, so good,” he said. “A number of people have signed up, obviously, for the trial and our conversion rates have been good so far. Most importantly, the technology is working, the user interface is considered good, the fan reaction has been quite strong.” Disney is pricing the service at $4.99 monthly, starting with a seven-day free trial.

One in every four smart TVs sold in the U.S. in Q1 had a Roku operating system, said the company Wednesday in a quarterly letter to shareholders. “The secular shift from legacy TV distribution to streaming continues unabated,” said Roku. “Our purpose-built TV operating system and advertising platform continue to lead the market. Moreover, our advertising and content partners are benefiting from our increasing scale. Nearly half of our roughly 21 million active users have cut the cord or have never had a traditional pay TV subscription, which means that they simply cannot be reached through linear TV. This makes our strategic position in the living room extremely valuable.”

Charter Communications and CBS inked a multiyear carriage agreement that gives the cable operator rights to live authenticated streaming on CBS.com and the CBS app, allowing Charter customers to stream CBS content across multiple devices, Charter said Monday. The deal includes retransmission consent of CBS-owned TV stations, including CBS-owned CW affiliates, in multiple markets, and distribution of Showtime, Smithsonian Channel and CBS Sports Network.

Music labels are trying to revive dismissed copyright infringement claims against ISP Grande Communications and its former management company, Patriot Media Consulting. A docket 17-cv-00365-LY motion (in Pacer) Friday asked U.S. District Judge Lee Yeakel of Austin for leave to file an amended complaint. The labels said the proposed amended complaint includes previously unavailable facts supporting their arguments for vicarious copyright infringement by Grande -- claims previously dismissed but with good cause to allow them to plead again. They said recent discovery turned up evidence that Grande and Patriot Media Consulting had the ability to control infringing subscribers but knowingly refused to. The plaintiff labels -- including Atlantic, Capitol, Elektra, LaFace, Roc-A-Fella, Rhino, Sony and Warner Bros. -- said discovery disproves Patriot assertions on which the magistrate judge based recommendations of dismissal of infringement claims. Grande/Patriot outside counsel didn't comment Monday.

If regulators force dismantling of the video bundle, it will benefit consumers who want single channels to the detriment of consumers who want multiple channels and the cost savings that come with bundling, American Enterprise Institute adjunct scholar Bronwyn Howell blogged Monday. Also suffering will be the distributors whose lost revenue will mean they won't be able to afford to buy the same bundle items as before, she said: Success of a bundling strategy relies on knowing distribution of consumer preferences, not just aggregates.

T-Mobile promised to disrupt the pay-TV industry, but "there simply isn't any room for disruption left" for the wireless company under programming license constraints it will face, nScreenMedia analyst Colin Dixon blogged Wednesday. Dixon said the video service the carrier plans to launch later this year based on Layer3 TV will put it in direct competition with other virtual MVPDs, and that competition will be a constraint. He said Layer3 TV in Los Angeles starts at $75 a month, far more expensive than other virtuals, and its 275-channel bundle likely means restrictions on how Layer3 can put together its programming bundles. Dixon said other virtual MVPDs are likely losing money on every subscription, so T-Mobile is facing even bigger losses. He said that makes it likely the company will follow AT&T's virtual MVPD lead with a service omitting sports and major broadcast channels. T-Mobile didn't comment Thursday. It announced plans to buy Sprint (see 1804300055).

Funai will market Sanyo-branded Full HD Roku TVs and home video products in Canada, it said Tuesday. The 32-, 40-, 43- and 50-inch TVs will be available at Walmart Canada in-store and online starting early this month, it said. Funai is working on developing and launching a U.S. version of the Sanyo Roku TV line, with timing and details to be announced at a later date, a company spokesman told us.

Charter Communications stock closed down 12 percent Friday at $263.32 after the company reported accelerating video losses. CEO Tom Rutledge in a Q1 earnings calls said integration of Charter with Time Warner Cable and Bright House Networks "is going quite well and pretty much as planned." But, he added, "It has lumpy aspects." He said a move to an app-based video delivery system should help cut capital costs. He said there's still potential for video growth, but little profit margin in the video business, so such growth is "relatively immaterial" to the company's future. Charter said it ended the quarter with: 16.4 million residential video customers, down 122,000; 22.87 million residential internet customers, up 331,000; and 10.37 million residential voice customers, down 52,000. Q1 a year ago, it had residential video losses of 100,000. It said Q1 revenue was $10.7 billion, up 4.9 percent. Rutledge said 20 percent of legacy TWC and 60 percent of legacy BHN footprints remain analog, though the company's all-digital effort should be done by year's end. He said 45 percent of Charter's footprint has access to 1 Gbps, and such service should be virtually universal by year's end. He said the company is raising minimum speeds to 200 Mbps at no additional cost faster than planned. Mobile service should launch in the middle of this year, with the company doing a field trial, and modifying several hundred of its retail stores, he said. He said Charter is testing in bands including 3.5 GHz and 28 GHz, and it's working toward a combination of small cells with its existing terrestrial network and DOCSIS products to offer high-capacity low-latency fixed wireless and mobile services. Chief Financial Officer Chris Winfrey said churn is up due to a focus on disconnects of non-paying subscribers, but sales are up and by the end of Q2 or early Q3, those disconnect numbers should taper off.

Many of the same content companies pursuing video piracy claims against streaming media player company TickBox (see 1712290026) and streaming media device company Dragon Box (see 1801110031) jointly sued the parties behind the Setvnow app and set-top box, claiming it's also an overt means to mass copyright infringement. In a docket 2:18-cv-03325-SVW-E complaint (in Pacer) Friday in U.S. District Court in Los Angeles, Amazon, Columbia, Disney, Netflix, Sony, Twentieth Century Fox, Universal and Warner Bros. said Florida-based Set Broadcast -- doing business as Setvnow -- has many hallmarks of an authorized streaming service such as a user-friendly interface, but the intent is subscribers "use Setvnow overwhelmingly to stream infringing performances" of the plaintiffs' copyrighted TV and movie content. Setvnow didn't comment Tuesday. Also named as defendants are Florida residents Jason Labbosiere, owner of Set Broadcast, and Nelson Johnson, an employee. Dragon Media -- doing business as Dragon Box -- in a docket 2:18-cv-00230-MWF-AS answer (in Pacer) filed last week in response to the complaint denied urging its subscribers to infringe copyright.