Online should surpass TV as the largest U.S. ad spending category this year, S&P Global Ratings announced Thursday. S&P said overall U.S advertising spending will be up 1.7 percent this year, less than half the 3.9 percent gain of last year due to absence of political and Olympics ad spending. Excluding those events, core ad spending would be up 3 percent, and 2018 spending is expected to be up 3.1 percent due to the Winter Olympics and political spending in the non-presidential year. The firm said its ratings on the U.S. media and entertainment sector are trending negative due to ongoing shifts in media consumption and ad spending. S&P said online, outdoor and core TV sectors likely will have ad revenue growth, while newspapers, magazines and radio will have continued ad revenue declines.

Eight independent programmers expressed concern with the FCC draft NPRM on ATSC 3.0, said a letter to the FCC posted in docket 16-142. The agency should address concerns that the American Cable Association recently raised about carrier capacity to carry the new standard (see 1702140065), said the programmers, which include Aspire Channel, Cinémoi, Herring Networks, MAVTV Motorsports Network, Ride Television Network and KSE Media Ventures on behalf of the Outdoor Channel and other such programmers. “As programmers unaffiliated with the largest conglomerates, our offerings will be at particular risk should the transition to ATSC 3.0 compel [multichannel video programming distributors] to eliminate cable channels” because of a carriage squeeze, the programmers said. Independent programmers “would likely be the first to go in systems where capacity is limited,” the letter said. “Such an outcome should concern anyone interested in preserving the diversity of media voices.” ACA met with aides to Commissioners Mignon Clyburn and Mike O’Rielly on similar issues Thursday, said an ex parte filing.

More than 220,000 people were directly or indirectly employed in the U.S. videogame industry, which had nearly 2,500 companies operating in 50 states in 2015, the Entertainment Software Association said in a report Tuesday. Of the 220,000 workers, roughly 65,000 people such as game designers and programmers were directly employed by the industry, while 155,000 workers, who supported the Android or iOS platforms, R&D and manufacturing assembly jobs related to gaming, were indirectly employed, emailed an ESA spokesman. Employees earned an average of $97,000 in 2015. ESA said total videogame software sales exceeded $24.5 billion last year. “The data we share today details a roadmap for economic growth, and the power of cultivating high-paying, technical careers in interactive entertainment," said CEO Michael Gallagher in a news release.

If 2016 can be regarded as the first full year of consumer virtual-reality device deployments, “the first year was absolutely a great success,” Nvidia CEO Jen-Hsun Huang said on a Thursday earnings call. The industry sold “many hundreds of thousands of units” of VR devices, Huang said. The first VR devices were “really targeted at early adopters,” and I think that we've delivered on the promise of a great experience,” he said. The industry’s challenge now is to make VR headsets “easier to use, with fewer cables,” he said. Headsets also will need to be “lighter” and “cheaper,” he said. “Those are all things that the industry is working on.” The early “experience” makes it “very, very clear that VR is exciting,” he said.

Pandora has no objection to and takes no position on foreign-owned Corvex Master Fund's petition for declaratory ruling to be allowed to own up to 14.99 percent of the music streaming company, they said in a joint filing posted Thursday. Corvex is based in the Cayman Islands but is controlled by U.S. citizens, Corvex's petition said (see 1608120061). A declaratory ruling that allowed Pandora to buy a Box Elder, South Dakota, radio station included a condition that the FCC must grant approval for foreign entities that want to acquire more than 5 percent of the company. Corvex wants to buy 9.99 percent but wants the FCC to pre-approve up to 14.99 percent. Another Cayman based company, Matrix Master Fund, is also seeking a stake in Pandora (see 1612210063).

The FCC's draft ATSC 3.0 NPRM could use more specificity on how the new standard will affect pay-TV operators that carry 3.0 broadcast signals, said representatives of the American Television Alliance in a meeting with an aide to Commissioner Mignon Clyburn Monday, according to an ex parte filing in docket 16-142. The NPRM should include questions about “the format and geographic scope of 'simulcast' ATSC 1.0 transmissions” and the carriage of simulcast signals under existing retransmission consent agreements, said representatives of ATVA members AT&T, Charter Communications, Dish Network, Verizon and the American Cable Association. ACA also submitted separate comments in a letter to the FCC praising Chairman Ajit Pai's decision to make circulating documents public. “This new process, we believe, will help lead to a better NPRM than otherwise would have been possible,” ACA said. The FCC should gather additional information on the additional capacity that multichannel video programming distributors will need to carry ATSC 3.0 signals, ACA said. “This proposed transition will result in broadcasters consuming dramatically more capacity on already-constrained cable networks, requiring them to either eliminate other programming or reduce the quality of their broadband Internet service,” ACA said. “A small cable operator would have to eliminate at least six HD cable channels or sharply degrade broadband performance in order to carry the four major network affiliates in a higher-resolution format.” NAB backs "a voluntary, market-driven deployment of Next Gen TV," and the regulator shouldn't "impose overly prescriptive requirements for the transition," the association's representatives reported telling FCC Chief of Staff Matthew Berry.

A third of U.S. broadband households subscribe to a paid streaming music service, up from 26 percent in 2015, said a Wednesday Parks Associates report. Most paid streaming music services had growth in 2016, and Amazon Prime Music led the market with 15 percent penetration in U.S. broadband households. Amazon Prime Music experienced a 50 percent subscription bounce for the period, and it late last year bowed Amazon Music Unlimited, its on-demand music streaming service with multiple subscription options. Spotify nearly doubled its subscriber base from 4 percent to 7 percent of households for 2016, and SiriusXM Streaming, Apple Music and YouTube all had modest adoption growth during the year, said Parks. Pandora and Google Play Music “did not change substantially” vs. 2015, it said. Free, ad-supported music services offer convenience and value, but consumers have been swayed to pay for services that offer commercial-free listening, on-demand content and expanded libraries, said Parks analyst Glenn Hower. Other findings: 58 percent of U.S. broadband households stream music or audio outside the home, and they stream 3.6 hours of music or audio weekly on computers, 2.7 hours on smartphones, said Parks.

Vizio's settlement with the FTC over allegations the smart TV maker collected viewing data on 11 million consumers without their consent or knowledge (see 1702060042 and 1702070024) "highlights the importance of providing thorough consumer disclosures," wrote Wiley Rein attorneys Megan Brown and Madi Lottenbach in a Tuesday blog post. They said it "remains unclear" to what extent consumers "reasonably expect" their demographics, location and viewing habits will be recorded and used by TV and streaming device makers, software developers and the advertising industry. The lawyers wrote that some consumers have IoT privacy and security concerns that could result in increased regulatory oversight. They cited acting FTC Chairman Maureen Ohlhausen's concurring statement in the settlement that it's the first time the commission has said viewing activity is "sensitive information" and the experts said further clarity may be needed about what causes "substantial injury."

Disney CEO Bob Iger won’t commit to a specific date or pricing model for the launch of the ESPN-branded, direct-to-consumer subscription streaming service that it plans with partner BAMTech for live sports (see 1608100024), he said on an earnings call. "The goal is to launch the platform sometime in 2017.” Disney is “very excited about what the potential of this is long term, both for the company and for third parties who can use the product, because the technological side of it is so strong in ways that are value-enhancing for them as well,” Iger said Tuesday. After a visit with BAMTech, he saw "the potential is for them to use data to increase or to generate great revenue from advertising,” Iger said. That’s “something that we don't have today, in part because a lot of our distribution comes through third parties, so we don't get access to that information,” he said. As for the content that will be available on the ESPN-branded service when it launches, BAMTech already licenses “a number of digital rights to sporting events, and we have licensed at ESPN a number of them” as well, Iger said. “We bring to the table a fair amount of rights that can be added to the rights that they have.” Disney spent $1 billion last summer to buy 33 percent of BAMTech, Iger noted: “Our strong sense as partners and as part owners is that we're going to continue to go out on behalf of the entity and license more content to that entity.” The inaugural content slate of the ESPN-branded service will “start off with, I think, a wide array of pretty attractive sports that come from both what they've licensed and what we've licensed,” Iger said.

LeEco can't predict when its Vizio acquisition will be completed, LeEco spokesman Greg Belloni emailed us Tuesday. LeEco's position remains the same as it was at CES, Belloni said: "The deal review is still in progress, but we don't have a date to share yet.” When LeEco announced July 26 it would pay $2 billion cash to own Vizio as part of its master plan to bring its “ecosystem” of smart TVs, content and cloud services to North America, it said it expected to close the deal in about six months (see 1607260066).