Morning Media Newsfeed: Apple to Buy Beats | Time Inc. Spin-off Set | House Questions Comcast Merger

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Apple in Talks for $3.2 Billion Beats Deal (Financial Times)
Apple is closing in on its largest ever acquisition with the planned $3.2 billion purchase of Beats Electronics, the headphone maker and music streaming operator founded by music producer Jimmy Iovine and the hip-hop star Dr. Dre. The deal could be announced as early as next week, people familiar with the negotiations said, but they cautioned that some details had yet to be agreed upon and talks could still fall apart. GigaOM While Beats Electronics is best known for its premium headphones, it launched a streaming music service, Beats Music, in January. According to the report, the streaming service would be included in the deal. Apple runs its own streaming music service, iTunes Radio. NYT / DealBook For Apple, whose revenue growth has slowed sharply in the last few years, the deal could point to a headlong move into the frontier of streaming music. iTunes Radio has been slow to enter the streaming world. At over $3 billion, the Beats acquisition would be a major departure for Apple, which under Steve Jobs favored smaller deals. CNET Beats Music debuted with a powerful billing and marketing partnership with AT&T and it has reportedly been growing quickly. Although the company has yet to disclose hard and fast subscriber numbers, industry estimates peg the total at about 200,000. The talks come as trends in music purchasing are shifting to subscription services. Data from the Recording Industry Association of America found that paid subscription services grew the fastest of all digital formats last year, rising to 57 percent, while revenues from permanent digital downloads that are iTunes’ specialty declined 1 percent. Mashable Apple has ramped up its pace of acquisitions in recent months. CEO Tim Cook has said in the past that he’s open to the idea of making 10-figure acquisitions. Apple stock was down by a little less than 0.5 percent in after-hours trading following the report.

Time Warner Spinning Off Time Inc. Starting May 23 (Capital New York)
Time Warner will officially start to spin off its Time Inc. publishing unit as its own publicly traded company on May 23, according to an S.E.C. filing submitted by the company. Following the spin-off, Time Warner will continue to be listed on the New York Stock Exchange as “TWX,” while Time Inc. will be listed as “TIME.” MarketWatch On June 6, investors who own Time Warner shares as of 5 p.m. on May 23 will receive one share of Time Inc. stock for every eight shares of Time Warner common stock they own. Time Warner disclosed the impending spin-off in March 2013, following the end of discussions to sell much of the magazine group to Meredith Corp. NYT After unsuccessfully trying to sell its struggling magazine business, Time Warner — which owns such brands as People, Sports Illustrated and Fortune — followed the path of other media giants like News Corporation and decided to split off its less lucrative print assets into a separate company. CNNMoney Time Warner has also spun off online advertising company AOL and Time Warner Cable. After Time Inc. is on its own, Time Warner will have three main divisions, all focused on TV and film content: Turner Broadcasting, HBO and Warner Bros.

House Grills Comcast Over Plans to Merge With Time Warner Cable (Variety)
Speaking of Time Warner, House Republican and Democratic lawmakers raised concerns Thursday about Comcast’s proposed alliance with Time Warner Cable, including the possibility that the company would gain too much market power of the lineup of channels and programming over its systems. Re/code Several lawmakers in the House Judiciary Committee hearing wondered how consumers would benefit from the deal. Comcast executives have previously said that consumers shouldn’t expect to see price cuts if the deal is approved by federal regulators. “What can be done to help lower prices?” asked Democratic Rep. Suzan DelBene, who said she has heard from constituents concerned about steadily more expensive monthly cable bills. Meanwhile, Comcast executive VP David Cohen said the deal “has the potential to slow the increase in prices.” Reuters While none of the lawmakers asked regulators to block the transaction, both Republicans and Democrats cautioned there were potential negatives in the $45 billion deal. Rep. Blake Farenthold, a Texas Republican, worried that small programmers may not be able to sell video to cable operators. Rep. John Conyers, a Democratic critic of big mergers in general, said a combined Comcast/Time Warner Cable would have 30 percent of the cable market, at least 40 percent of the broadband market, 19 of the 20 biggest cable markets and a major Spanish-language channel, as well as movies and television shows and sports programming. WSJ The Justice Department and the FCC will have final say on the deal, but lawmakers typically weigh in with concerns that are taken into account during the review process. Thursday’s hearing reflected increased concern about the merger in recent weeks from consumer groups and lawmakers about the power the combined company would hold in a host of markets, including pay television, broadband, video programming and cable advertising. Comcast has emphasized that the two companies don’t currently compete for cable or broadband subscribers, so consumer choice shouldn’t be affected by the deal.