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Analysis for 'SVOD'

  • Research: Millennials’ Viewing Preferences Are Shifting to SVOD

    Almost 75% of 18-34-year-olds use SVOD services at least once per week to watch movies and TV shows, with 40% watching daily, according to new research released by consulting firm Altman Vilandrie & Company. In addition, 40% of 18-34-year-olds use SVOD services daily. 78% of them have at least one SVOD subscription, with 55% having more than one.

    These SVOD services are becoming the go-to source for younger viewers, with 77% of 18-24-year-olds using them first when they don’t know what they want to watch instead of broadcast or cable. Younger viewers rely most on peer recommendations for what to watch. Conversely, when viewers over 55 aren’t sure what to watch, 65% of them first turn to broadcast or cable.

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  • Research: 52% of Viewers Now Watch Their Favorite Show From An Online Source

    Yet another sign of how the times are changing: the new “Conquering Content” report from Hub Research finds that 52% of viewers now watch their favorite TV show from an online source rather than via a pay-TV set-top box (either live TV, VOD or DVR). Online sources include SVOD services, a TV network or pay-TV app/web site or services like iTunes.

    While 48% of viewers still cited their set-top box for how they watch their favorite show, that was down from 64% in 2014. Online sources as the primary way to view is up from 31% in 2014.

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  • VideoNuze Podcast #393: Hulu’s CEO Departs; Amazon Studios’ Brain Drain

    I’m pleased to present the 393rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    It’s been a big week for executive changes in the SVOD world. Hulu’s CEO Mike Hopkins is departing to become chairman of Sony Pictures Television. Randy Freer, president and COO of Fox Networks will take over as Hulu’s new CEO. Colin and I both think Hopkins accomplished a lot in his four years at Hulu and we review the company’s progress. Still, the SVOD space is more competitive than ever and Hulu has a range of challenges ahead of it.

    Speaking of executive changes, Amazon Studios is undergoing a brain drain, with its head Roy Price leaving due to sexual harassment charges followed by 3 other senior executives. Amazon Studios was already under pressure to create blockbuster programming and these management changes would seem to only increase the pressure. We dig into what’s happening at Amazon.

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  • Hulu’s CEO Hopkins Departs With Strong Record But Looming Challenges

    Hulu announced yesterday that CEO Mike Hopkins will depart after four years running the company. Hopkins is heading to Sony Pictures Television where he’ll become chairman. Taking over as Hulu CEO will be Randy Freer, currently the president and COO of Fox Networks Group and a Hulu board member. Fox is one of the main owners of Hulu.

    Hopkins leaves Hulu with a strong record of accomplishment, but with many challenges still looming. He joined Hulu in October, 2013 just a couple of months after the company’s owners reversed course, deciding to invest another $750 million rather than sell it outright.

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  • VideoNuze Podcast #392: There’s Netflix and There’s Everyone Else

    I’m pleased to present the 392nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    Netflix reported another strong quarter earlier this week, adding 5.3 million subscribers, and also forecasting an increase in its content spend in 2018 to $7-8 billion. On today’s podcast we discuss the results and what’s ahead.

    Despite Netflix’s successful quarter, Colin and I both observed some ambiguity on the part of its executives in explaining what actually drove the subscriber additions. Overall industry momentum, original content, or both? It’s not clear.

    What is clear however is that with Netflix now up to 109 million global subscribers, we’ve moved into a phase where there’s Netflix and there’s everyone else. No other company has close to Netflix’s global footprint or content budget. To put the content budget alone in context, in 2018 it will likely be 3-4x of what mighty HBO spends. Size clearly has its advantages.

    Colin and I explore what this all means for the industry going forward.

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  • Netflix Rumbles On, But It’s Still Hard to Discern Original Content’s Role

    Netflix reported a strong Q3 ’17, growing domestic subscribers by 850K and international subscribers by 4.45 million. Those compared to Q3 ’16 of 370K domestic and 3.2 million international. Adding 5.3 million subscribers in a single quarter, off a base of approximately 100 million is certainly nothing to sneeze at. But yesterday's earnings call with company executives once again raised the question of what’s actually driving the growth? Netflix itself has offered ambiguous answers.

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  • VideoNuze Podcast #390: CBS All Access Gains on Star Trek; YouTube TV Takes Risky Bet on World Series

    I’m pleased to present the 390th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    First up this week, we discuss the impact of the “Star Trek: Discovery” launch on CBS All Access. CBS has said that All Access daily subscriber growth is up 200% over last year since the show’s launch. As Colin notes though, it’s hard to draw conclusions yet about how sustainable the additions will be or whether churn will spike. More originals are clearly needed to broaden the service’s appeal.

    We then turn to the surprising news this week that YouTube TV will be the presenting sponsor of the 2017 World Series. Colin and I agree it’s really a sign of the times when a skinny bundle has stepped up this way. However, since Fox, the network broadcasting the games, isn’t even available yet on YouTube TV in half the top 50 U.S. markets, the sponsorship carries risks. Colin also notes that given YouTube TV’s programming costs, it is likely losing money for each new subscriber.

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  • VideoNuze Podcast #389: Exploring Disney’s OTT Pricing Decision with GfK’s David Tice

    I’m pleased to present the 389th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    On today’s podcast, David Tice, SVP, Consulting at GfK, a global market research company, joins us to discuss factors Disney should be considering about how to price its OTT service that will launch in 2019.

    David has researched for several years the maximum perceived value that subscribers of Netflix, Amazon and Hulu place on these services, finding that there’s a “natural limit” of around $11 per month per service. Value perceptions have increased a bit over the past 3 years but have stayed in a relatively tight range between approximately $8-$11 per month.

    The research highlights the tight spot that Disney is in, because given the extensive content CEO Bob Iger has indicated will be included and the need to protect existing pay-TV relationships, the company will be very tempted to price higher than $11 per month, just as HBO Now has done. However, such a decision could significantly limit demand as occurred with HBO Now.

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  • For Disney’s New OTT Service, Success is All About the Price

    Though it won’t launch until late 2019, anticipation for Disney’s entertainment-focused OTT service further increased last week when CEO Bob Iger said at the Bank of America investor conference that the Marvel and Star Wars films would be a part of the service. Whether they too would move over from Netflix was a key unanswered question when Disney initially announced the OTT plan last month.

    Iger also detailed everything that’s intended to be included in the service: the entire output of the Disney studio plus Pixar and Marvel, 4-5 original live-action movies exclusively for OTT, a library of 400-500 films, 4-5 original Disney-branded TV series and 3-4 TV movies per year, 7,000 episodes of Disney branded TV, including recent seasons of Disney Channel programming (though not in-season episodes) and thousands of shorts.

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  • VideoNuze Podcast #386: Roku’s IPO, T-Mobile-Netflix Promo, Hulu-Spotify Bundle, Newsy to Cable TV

    I’m pleased to present the 386th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    After taking a couple weeks off from the podcast, Colin and I are back, and today we discuss 4 different industry stories that have caught our attention. First up, just before Labor Day, Roku filed its S-1 IPO document, sharing financial details for the first time. Colin and I are both struck by the strength of Roku’s “platform revenues” and believe the company’s strategy of innovating with low-priced streaming devices to gain market share has opened up many revenue options (though Colin’s a bit worried about Roku losing its valuable neutrality position in the wake of launching the Roku Channel this week).

    We then move on to T-Mobile’s plan to give away Netflix to its unlimited family plan subscribers. It’s the latest “video as bait” play by a wireless carrier, and we both see this trend accelerating. Another interesting bundle play this week was the $5/mo promotion from Hulu and Spotify. We discuss its potential to extend beyond the initial college student target.

    Finally, Colin and I were both intrigued by a plan unveiled by Newsy, a popular millennial-focused news app, to create a linear TV channel by taking over Retirement Living TV’s pay-TV subscribers. It’s a relatively unusual move given most TV networks are launching OTT apps these days.

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  • VideoNuze Podcast #385: The Role of Advertising and Subscriptions for Premium Video

    I’m pleased to present the 385th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    On today’s podcast, Colin and I discuss the role of advertising and subscriptions for premium video. I wrote about this topic earlier this week, observing that video providers today are experimenting with all models to see what succeeds. The urgency to find the successor to the lucrative multichannel bundle approach is becoming more urgent as cord-cutting increases.

    Colin and I both believe the picture is currently quite murky. We contrast the success Netflix, for example has had with ad-free viewing while subscribers to both CBS All Access and Hulu still appear to prefer to pay less and get a full ad load.

    I think there’s real power in a brand’s original identity and it’s quite hard to transition from one model to another. Colin sees more upside from “freemium” approaches that introduce viewers to content with ads but then try to upsell them to subscriptions.

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  • Video Providers Pursue Advertising, Subscriptions or Both

    Advertising, subscriptions, or both? All video providers are currently grappling with the fundamental question of what business model to pursue. With the cost of producing high-quality video and the challenge of attracting and audience more daunting than ever, deciding which path to follow has taken on increasing urgency.

    But if the stakes are higher, so too is the murkiness, especially when it comes to what consumers will pay for. Just because Netflix has 50 million U.S. subscribers doesn’t mean getting to a million is straightforward for an SVOD wannabe.

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  • Expensive SVOD Talent Wars Are Unlikely to End Well

    Another day, another high-profile - and no doubt incredibly expensive - SVOD talent deal announced. Today’s is between Netflix and the ultra-successful producer Shonda Rhimes, poaching her from ABC, where she’d been for 15 years. For Netflix, it followed last week’s deals with the Coen brothers for a new series and the company’s first acquisition, of Millarworld, plus many others.

    While Netflix has been busily announcing new originals - no doubt timed to offset the fallout from Disney’s decision not to renew its pay-1 output deal upon expiration in 2019 - Amazon hasn’t been sitting still. Last week the company lured Robert Kirkman, creator of the blockbuster “The Walking Dead” series on AMC in an exclusive 2-year deal. That followed recent deals for many other originals, with a heavy emphasis on kids shows. And don’t forget Hulu, which is coming off its biggest original success to date with “The Handmaid’s Tale.”

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  • VideoNuze Podcast #383: Disney’s Blundered 2012 Netflix Deal Comes Home to Roost

    I’m pleased to present the 383rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    On today’s podcast, Colin and I discuss how Disney’s blundered 2012 content deal with Netflix has now come home to roost. Even though Disney’s content was only activated on Netflix last year, this week Disney announced it won’t renew the Netflix deal and will instead launch its own entertainment-focused SVOD service - but not until it’s able to in 2019.

    Colin and I agree that 2019 is a lifetime away given how fast the video world is moving. Importantly, the competitive environment for kids programming is already very crowded and will only intensify over the next 2 years as others’ investments accelerate. While Disney’s content is the gold standard, for many reasons we discuss, the company success in SVOD is far from assured.

    Disney painting itself into a corner is a textbook example of the consequences of prioritizing short-term gains over long-term strategic flexibility. Though the original Netflix deal was done in 2012, its ramifications will reverberate for years to come.

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  • Disney Blew A Big Strategic Opportunity By Licensing to Netflix in 2012

    By now we’re all familiar with the 3 big announcements Disney made yesterday: 1) a plan to launch its own entertainment-focused SVOD service, in turn sunsetting in 2019 its Netflix licensing deal for Disney/Pixar content, 2) a plan to launch an ESPN OTT service and 3) spending $1.58 billion to buy another 42% of BAMTech and take control of that business.

    Focusing on Disney’s entertainment SVOD service it looks pretty clear now that by signing the original December, 2012 licensing deal with Netflix, Disney blew a big strategic opportunity to get in front of the trend toward direct-to-consumer online distribution.

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  • FX Launches FX+ With Comcast; Is An SVOD A La Carte World Coming Into View?

    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.

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  • VideoNuze Podcast #382: Digging Into CBS All Access and Star Trek Premiere

    I’m pleased to present the 382nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    It’s been a little while since Colin and I last discussed CBS All Access, which now has approximately 1.5 million subscribers. But with the launch of “Star Trek: Discovery” coming on September 24th (first episode on-air, then exclusively on All Access), the timing is good to dig into its place in the market and the role of originals.

    Interestingly, Colin and I have differing views on almost everything related to CBS All Access; he sees their progress to date as modest (whereas I’m more impressed), but he thinks Star Trek alone could boost subscribers all the way to the 4 million point, which is the 2020 goal (whereas I’m much more cautious), and he sees All Access as threatening to CBS’s local affiliates (whereas I think they’ve largely been brought under the tent).

    Most of all, Colin believes Star Trek is a relatively risky move by the company, while I see it as taking a page from a playbook well-established by Netflix and others who have used originals to methodically build their businesses.

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  • Perspective What's this? Preparing SVOD Services For Next Wave Of Growth

    More people are paying for more streaming video. Netflix’s Reed Hastings and Amazon’s Jeff Bezos have insisted that people owning multiple subscriptions will be the norm. On Netflix’s recent Q2 earnings call, Hastings emphasized that Amazon’s success in certain markets has not taken away from Netflix’s.
     
    A recently published report from IBB Consulting shows the underlying trends behind these claims, revealing that half of paid streaming users subscribe to at least two services. Streaming users are also prepared to spend on additional services or even pay more for the subscriptions they already have. In fact, based on average SVOD pricing, a majority (61%) of SVOD subscribers are willing to pay at least 20% more for their favorite service. 29% of paid OTT video subscribers plan to add an additional paid service within the next six months.

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  • U.S. SVOD Adoption Up to 64% of Homes, With 29% Streaming Daily

    U.S. adoption of Netflix, Amazon Prime and/or Hulu is up to 64% of homes, an increase from 47% in 2014, according to Leichtman Research Group. Of those who have one of these SVOD services, 51% now have more than one of them, up from 35% in 2014.

    On our podcast last week, Colin and I talked about how the number of people taking multiple SVOD services has become a central trend in the industry and is helping spur growth for all providers. Both Amazon’s Jeff Bezos and Netflix’s Reed Hastings have insisted over the years that people will take multiple services, and that appears to now becoming reality.

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  • VideoNuze Podcast #380: What's Really Behind Netflix's Q2 Subscriber Spike?

    I’m pleased to present the 380th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    Earlier this week Netflix reported its Q2 ’17 results, with domestic and international subscriber additions exceeding even the most optimistic Wall St. forecasts. But as Colin and I discuss, it is extremely murky what actually drove the strong performance. In fact, Netflix’s Q2 ’17 varied dramatically from prior years, creating a roller-coaster feel that makes it almost impossible to predict where Netflix is heading next.

    Highlighting the confusion is that Netflix management again emphasized the role of its original content in driving the Q2 numbers. Yet independent research just a couple months ago indicated that in Q1 ’17, 85% of Netflix’s U.S. streams were actually licensed content, despite the many billions the company has invested in originals. To top it off, Colin reports that he repeatedly hears industry friends say “there’s nothing on Netflix to watch.”

    There’s no question Q2 reinvigorated the Netflix growth story. But what’s behind that story feels harder to understand than ever.

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