Yesterday’s announcement by Roku, that it would begin offering SVOD and ad-free premium cable TV networks (what Roku calls “Premium Subscriptions”) within The Roku Channel, is the latest sign that subscription video services are turning to bigger third party platforms to add and retain paying subscribers. Despite all the industry excitement over direct-to-consumer (“DTC”) business models, third party distribution remains critical.
Roku’s move evokes what Amazon has been doing with its Amazon Channels program for just over 3 years, which I've been bullish on from the beginning. Prime subscribers are able to choose from dozens of different small and large SVOD services and premium cable TV networks and have the fees billed directly to their credit card on file with Amazon. Free trials are commonplace and the content is viewed seamlessly within the Prime Video app on multiple devices.
I’m pleased to present the 442nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
This week we first discuss AT&T’s recently unveiled plans to launch a new streaming service sometime later in 2019, anchored by HBO and including assets from other WarnerMedia properties. Details are still slim, but both Colin and I highlight many different challenges for this service would get executed and priced, especially with respect to HBO’s role.
We then transition to talking about YouTube TV’s winning sponsorship of this year’s World Series. As I wrote yesterday, the execution is superb and includes many creative elements. For millions of viewers, it is impossible to not be exposed to the brand, and the campaign is surely leading to many new trial subscriptions.
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Click here to listen to the podcast (23 minutes, 4 seconds)
Last Friday, NBCUniversal officially launched WatchBack, an iOS-only video app that’s meant to gather data on viewing behaviors while offering users a broad range of content and the opportunity to win weekly sweepstakes. It’s an intriguing new spin on how content providers can mine value from direct-to-consumer apps in order to optimize their programming.
I spent a little time with WatchBack and found it to be easy to use with a variety of content providers and programs to choose from. Upon opening the app for the first time, I was asked to register, primarily so I could begin participating in the weekly sweepstakes. However I was able to proceed without registering, though I was required to select my 3 favorite genres, so WatchBack could start recommending content.
Yesterday Hulu and Discovery announced that 5 additional Discovery-owned TV networks will now be included in Hulu with Live TV, the virtual multichannel video programming distributor (“vMVPD” or “skinny bundle”), bringing the total to 8. In addition, approximately 4,000 episodes of Discovery programming will be added to Hulu’s SVOD library.
The deal further increases the value of Hulu with Live TV to its subscribers. But it also raises the question, yet again, of ballooning vMVPD programming expenses and how these impact profitability. Traditional multichannel pay-TV providers have steadily raised their rates over the years to offset higher programming costs (leading to the lower price opportunity that vMVPDs are trying to capitalize on).
I’m pleased to present the 427th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
AT&T wants HBO to up its game - producing more content, gaining more subscribers and increasing engagement, in a bid to stay competitive in the streaming era. On today’s podcast, Colin and I explore why the new approach makes sense directionally, but also carries big risks. Can HBO scale up its production spending and broaden its distribution while retaining its brand positioning? It won’t be an easy feat.
While AT&T isn’t highlighting Netflix as its key competitor, it’s clearly implied. And this week’s Emmy nominations, which saw HBO eclipsed for the first time in 17 years as the most honored network (by Netflix), is a clear sign of the times. Astoundingly, Netflix has gone from just 14 nominations 6 years ago to an industry-leading 112 this year.
Beyond the HBO-Netflix content battle, Netflix continues raising the stakes on SVOD user experience. As we also dig into, this week Netflix announced “Smart Downloads,” a clever way of enhancing offline viewing, which will no doubt delight millions of its subscribers.
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Click here to listen to the podcast (24 minutes, 38 seconds)
Just weeks after closing its acquisition of Time Warner, AT&T has begun the process of revamping HBO’s traditional success formula, with Netflix envy apparently the main catalyst. According to a new NY Times article detailing a town hall meeting that Warner Media CEO John Stankey had with HBO employees, the new strategy boils down to wanting HBO to produce vastly more content with a goal of driving up engagement time and growth.
That sounds a lot like the formula that Netflix has employed for years, spending billions of dollars per year on scores of original programs in a global land grab for subscribers, while de-emphasizing profit maximization. Of course Wall Street has fallen in love with Netflix’s approach. Conversely, HBO has pursued a more limited “boutique” content strategy, with a few key marquee programs, while maximizing profitability.
Yesterday, NBCUniversal announced plans to reduce the number of ads in commercial pods by 20% and reduce ad time by 10% across all its networks in prime time. The move will almost certainly meet its goals of creating a better viewer and advertiser experience. But an overarching question is whether it will ultimately benefit NBCUniversal and the broader TV industry? The answer to these questions lie in whether NBCUniversal can make the math work on fewer ads and less ad time.
Obviously it’s a risky move for any business to reduce the quantity of what it sells, betting that customers will be willing to pay more for a scarcer resource. But basic laws of supply and demand are in NBCUniversal’s favor: when supply is reduced, then even at constant demand, prices should rise.
I’m pleased to present the 408th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Roku reported a strong Q4 ’17 holiday quarter this week as it continues to transition to an ad-based business model driven off its 19 million+ active users. Roku is in the middle of all of the industry key trends and Colin and I discuss the company’s results and how we see the business going forward.
We then turn to how HBO and Showtime have been revitalized by OTT delivery. 2017 results show how both traditional networks are using direct-to-consumer and new online distribution models to make their programming more easily accessible to viewers and achieve record subscribership. Their success is a textbook example of how OTT is shaking up longstanding industry norms.
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Click here to listen to the podcast (24 minutes, 2 seconds)
Count Fox News as the latest TV network planning to launch a streaming service catering to its most loyal viewers, or super-fans as they’ve come to be known. According to a NY Times report this morning, later this year Fox News will launch Fox Nation, a standalone streaming service including hours of new daily programming with new anchors and commentators. The direct to consumer service would exist outside the traditional pay-TV world. No monthly price was revealed for the new Fox News service.
Topics: Fox News
I’m pleased to present the 406th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
First up this week, Colin and I share our experiences live-streaming the Super Bowl. Both of us were on the road and were extremely impressed. Except for latency of up to a minute or so, neither of us experienced any buffering or pixelation. In short, it was nearly a TV-like experience and really demonstrates how far live-streaming at scale has come.
We then shift gears to discuss strong growth at HBO Now, which just reported hitting the 5 million subscriber mark at end of 2017. HBO Now is benefiting from not being a “buy-through” on top of expensive pay-TV services. By going direct-to-subscriber, HBO Now has made its product much more accessible. We suspect that Amazon Channels and AT&T (which strongly promoted HBO Now in 2017), were pivotal to growth.
(Apologies, our audio quality isn’t that good this week).
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Our afternoon keynote interview at the recent SHIFT // Programmatic Video & TV Ad Summit was with Mike Rosen, EVP, Portfolio Sales and Strategy, NBCUniversal. Mike was interviewed by Matt Prohaska, CEO and Principal, Prohaska Consulting and shared a fantastic insider’s look at how the TV industry is evolving.
Mike discussed a range of topics including how NBCUniversal has organized itself around audiences instead of verticals with content a key focus, how he defines the term “programmatic,” why data comes up in every single meeting and how it feeds NBCU’s optimization platform, what the “new” currency is and the challenge of giving up legacy approaches, which industries are adopting custom segmentation approaches first, how to overcome attribution challenges and much more.
Watch the session video now!
NBCU is enabling clients to buy national TV ads using a self-serve programmatic TV approach. The new private market arrangement is powered by technology provider 4C. NBCU already works with AOL, TubeMogul and Videology to enabling programmatic buying of its ad inventory. The first client using the self-service approach is Target, which will be able to meld its first-party customer data with NBCU’s own audience data to target certain viewers with ads.
Target’s agency of record is GroupM’s Essence, which is where Adam Gerber, formerly SVP of Client Development and Communications at ABC, was recently appointed SVP of Investment for North America.
This morning, FX and Comcast announced FX+, an ad-free subscription video on demand service available to Xfinity TV subscribers for $5.99 per month. FX+ is quite comprehensive, including full current seasons of 17 different FX shows (e.g. “The Americans,” “Atlanta,” “Taboo,” etc.) along with library seasons of 16 current and prior shows (e.g. “The Shield,” “The League,” “Nip/Tuck,” etc.). In all, there will be over 1,100 episodes of FX programming available to subscribers.
FX+ follows the recent announcement of AMC Premiere by AMC and Comcast, which is another ad-free SVOD service, available for $4.99 per month. However, AMC Premiere doesn’t include AMC’s deep library of popular programs, highlighted by “The Walking Dead,” “Breaking Bad” and “Mad Men,” while also including some original digital content. AMC Premiere’s shallow content selection suggests its success will be modest.
When Discovery announced that it was acquiring Scripps Networks Interactive earlier this week for $14.6 billion, a lot of the coverage naturally focused on how the combined companies will have more leverage in their pay-TV carriage negotiations and also how significant cost-savings and synergies will result.
While all of that is true, the inescapable reality is that because pay-TV subscriptions as a whole are shrinking, Discovery’s best case scenario is that it can get a larger piece of a smaller pie. A far more interesting angle, to me at least, is how the company can accelerate its online and social video initiatives. A prime place to start would be by looking at the success that Scripps’ Food Network is having in 2017, as it as slightly surpassed BuzzFeed’s well-publicized Tasty, in the hotly competitive social video food space.
I’m pleased to present the 378th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
First up this week, Colin shares reactions to a presentation he attended by Jennifer Dorian, GM of Turner Classic Movies and FilmStruck about how TCM is focusing on its core fans to build community and strengthen its brand. Colin was very impressed with the range of initiatives TCM is taking as examples of how a traditional cable TV network can deepen its relationships with viewers.
We then transition to discuss AMC Premiere, the new $4.99 per month service recently launched by AMC and Comcast allowing ad-free viewing of current season programs. I really like the fact that the companies are experimenting with a new business model, but as I wrote, based on other similar services, I’m not super-confident that there is huge pent-up demand to pay extra to avoid ads, especially since the programming available is limited.
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Click here to listen to the podcast (19 minutes, 20 seconds)
AMC Premiere, an ad-free version of the popular cable network AMC, will be available for $4.99 per month to Comcast’s Xfinity TV subscribers, the latest initiative by pay-TV incumbents to offer more flexible access to viewers. AMC Premiere provides ad-free access to the network’s current season programs along with a variety of exclusive and first-look content and movies.
However, AMC Premiere does not include past seasons of “The Walking Dead” for example, or any of the iconic programming like “Mad Men” or “Breaking Bad,” which put AMC on the map for high-quality originals. All of those have long been licensed to Netflix. The most recent season of “The Walking Dead,” as well as prior ones, are available on demand from Comcast for $2.99 per episode. Many other shows from other networks are available at no charge on demand from Comcast.
I’m pleased to present the 372nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we discuss 4 stories that caught our attention in recent days. First, Viacom’s plan to anchor an entertainment-only skinny bundle without sports or news networks. Colin and I are intrigued, but for a variety of reasons are skeptical Viacom is the right company to lead this.
Next we turn to Facebook, which has made no secret of its interest in pursuing longer-form video. This week brought news of its initial partnerships and potential business models.
We then discuss Amazon Channels expansion into the UK and Germany this week, building on the US model for Prime users to easily subscribe to various SVOD services. Both of us have been very bullish on Channels for a while and see lots of potential for it in other geographies.
Finally we dig into Snapchat Shows, the fast-growing social network’s plan to enlist multiple media companies to make vertical videos. Variety did a really good roundup of all the activity earlier this week, which suggests substantial progress.
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Click here to listen to the podcast (21 minutes, 48 seconds)
On yesterday’s Time Warner Q1 ’17 earnings call, HBO’s CEO Richard Plepler said that the company’s content licensing deal with Amazon would not be renewed and therefore would expire at the end of 2018. The deal was originally announced in April, 2014 and allowed Amazon to include iconic series like “The Sopranos,” “The Wire,” “Deadwood” and others in its Prime Video service.
Although Plepler cited “an acceleration in our digital business” as the reason for the decision, I believe that the more important driver at work is a repositioning of how the immensely valuable HBO will be used when AT&T’s acquisition of HBO parent Time Warner occurs later this year (assuming regulatory approval is granted, which I think is very likely).
I’m pleased to present the 366th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Once again, we’d like to thank our podcast sponsor Akamai Technologies, which will show its Media Acceleration capabilities and range of cloud-based solutions at the NABShow in Las Vegas, in booth SL3324. Click here to schedule a meeting.
This week rumors of two more online TV services surfaced on Bloomberg - one is an alliance of AMC, Discovery and Viacom and the other, from NBCU, would include programs from the company’s broadcast and cable TV networks. Both services appear to be in the mold of CBS All Access, with the AMC/Discovery/Viacom service being positioned as a sports-free and offered by pay-TV providers. Bloomberg said it was too early to tell whether sports or a linear feed of NBC would be included in the second.
At first blush, Colin and I are intrigued by both as they appear to target “entertainment-only” viewers who don’t care about sports. Netflix and Amazon, among others have been super-successful targeting this entertainment-onlys and we both believe there’s still growth available for additional services. We discuss the opportunity as well as potential stumbling blocks in this week’s podcast.
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Click here to listen to the podcast (21 minutes, 35 seconds)