Preliminary overnight numbers for the Oscars show an 18.9 rating in prime time, down 16% vs. 2017’s 22.4 rating. The overnight rating is a new record low for the Oscars, and importantly continues the dismal showing for 2018’s marquee TV events: Golden Globes (-5% vs. 2017), Super Bowl (-7% vs. 2017, worst in 9 years), Olympics (-7% vs. 2014, worst ever) and Grammys (-24% vs. 2017, worst in 9 years). Clearly TV’s biggest events are losing their luster.
There are always challenges particular to each event (e.g. Olympics time zone issues, Patriots fatigue, etc.). In the case of the Oscars, an ongoing problem is the disconnect between best picture winners and box office performance. A fascinating WSJ article on Friday detailed how only 4 best picture winners in the past 12 years have been among their year’s 25 highest-grossing movies, with none cracking the top 15. In the current era of superheroes, animation and franchise movies, thoughtful best picture nominees simply don’t draw the biggest audiences, in turn diminishing the Oscars’ relevance (2018 could be a quasi-exception with “Black Panther”).
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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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).
Downloading video for offline playback continues to gain momentum with Showtime announcing late last week that it has enabled downloading of its entire roster of programs from its standalone subscription and TV Everywhere apps at no additional cost. Downloading is available on iOS and Android phones and tablets plus Amazon Fire tablets.
Loyal VideoNuze readers know that I’ve been an enthusiastic downloading proponent for 4 1/2 years, back to when I first experienced TiVo’s implementation of it via TiVo Stream. I immediately saw downloading as a killer app because it allowed high quality out-of-home viewing independent of shaky or non-existent WiFi hotspots and/or eating up expensive mobile data plans (if they could even support video streaming).
Recode reported a couple days ago that Apple is potentially looking to sell online subscriptions to HBO, Showtime and Starz in a single bundle to subscribers. Since Apple has made so little progress in video compared to its peers, a bundling move like this could give it a boost. But if I were handicapping which company is much more likely to sell HBO, Showtime and Starz in a discounted bundle - and succeed with it - I’d put my money on Amazon far sooner than Apple.
When HBO Now launched in April, 2015, its $14.99/month price was well above competing SVOD services such as Netflix ($11.99/month), Hulu (ad-free $11.99/month) and Amazon ($8.99/month or included with Prime for $99/year). On the one hand, an argument could be made that an HBO subscription is more valuable due to HBO’s rich library and therefore should be priced higher than newer competitors. But HBO’s market-skimming high price strategy means its more aggressively priced competitors are growing far faster than HBO, enabling them to have greater scale, which will be the key to future success.
When Sesame Workshop announced its deal with HBO last week, everyone seemed to have an opinion about whether another “poor door” had been created, this time for Elmo and his iconic friends.
It’s an interesting societal debate, but what was more intriguing to me was that Sesame’s deal with HBO signaled that its own SVOD efforts had not delivered material results (and with the new HBO deal, I’d guess will likely be phased out at some point). That in turn reinforced my belief that the niche SVOD model is extremely difficult given the rise of “super” SVOD services like Netflix, Amazon and Hulu.
I'm pleased to present the 279th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Change is everywhere in the video and TV industries and this week 6 different news items hit our radar, which Colin and I think illustrate how quickly things are moving. In today's podcast we discuss each of them and why we think they're significant.
The items include continued falling linear TV ratings as measured by Nielsen, Hulu distributing Showtime, new research showing that Netflix's audience is size larger than those of broadcast TV networks, Tennis Channel's converged TV Everywhere-OTT model, HBO premiering 2 new shows on Facebook and Ooyala's new data showing that 42% of video views are now on mobile.
(note: Colin wanted to clarify one point - when citing Netflix viewership, he said it was 10 million hours streamed per quarter when it's actually 10 billion hours)
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In last Friday's podcast, Colin and I covered a lot of ground in assessing HBO Now's opportunities and risks. One of the points I raised, which I believe deserves much more attention in understanding HBO Now's disruptive potential, is how it threatens pay-TV's multi-billion dollar "sports tax" on non-fans.
I've been writing about the sports tax - how non-fans effectively subsidize the cost of super-expensive sports networks such as ESPN and regional sports networks (RSNs) that they don't watch - for almost 5 years now. In a back-of-the-envelope analysis I did following a panel I sat on with Mark Cuban back in 2011, I estimated the annual tax on non sports fans amounted to at least $2 billion per year (4 years later, it's now much higher).
I'm pleased to present the 264th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. In today's podcast we dig into HBO Now's big opportunities and big risks.
Colin and I agree that HBO has made a pretty aggressive bet with HBO Now. It is reasonably priced at $15/month and includes HBO's full library of original and licensed content. HBO partnered exclusively with Apple at launch, gaining the company's halo, and quite possibly very significant promotional support TBD (not to mention diverting from its traditional pay-TV operator partners).
Importantly, HBO Now gives viewers their first-ever opportunity to access HBO's iconic content without first having to subscribe to an expensive pay-TV service. This "buy-through" has effectively capped HBO's growth, while Netflix zipped past it. We explain why we believe this flexibility has potentially significant consequences for non-sports fans, in turn impacting both cord-cutting and cord-nevering.
There are so many fascinating angles to the HBO Now move. We cram in as much as we can, and will certainly be revisiting it as HBO Now launches in April.
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HBO's upcoming launch of its "HBO Now" OTT service is unquestionably one of the biggest variables for the future of the pay-TV ecosystem. Because of its marquee original content and ubiquitous brand, HBO is unique among all entertainment-oriented cable networks in having the power to attract millions of OTT subscribers.
While that's an opportunity for HBO, it's also a massive threat to the larger pay-TV industry. The ability to subscribe to HBO standalone will almost certainly make cord-cutting and cord-nevering a more appealing option for some viewers. HBO Now, coupled with other OTT options, like Netflix, Hulu, Amazon, or even Sling TV (for ESPN fans in particular) would be very enticing.
I'm pleased to present the 253rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Colin gets us started this week, discussing the new CBS-Dish Network deal, highlighting that OTT rights were excluded. This is noteworthy because of Dish's plans to launch a $30/month OTT service soon (dubbed "NuTV"), so it's not clear if or how CBS will fit in (CBS has recently launched its own "All Access" OTT service).
There have been previous reports Dish isn't planning to include broadcast networks in NuTV, instead requiring a surcharge. All of this continues to make me skeptical about NuTV's prospects. Note that even CEO Charlie Ergen has tamped down expectations for NuTV.
We then turn our attention to HBO's decision to outsource its OTT backend to MLBAM, as disclosed by Fortune this week. On Wednesday, I wrote that while MLBAM's solution is first rate, and it's a short-term win for HBO to get to market quickly, I still see the decision as a long-term competitive disadvantage for HBO. In my view, HBO needs to develop its own tech DNA to fully compete with Netflix and other OTT players, particularly in leveraging data, which I believe is the new king. Colin disagrees and thinks HBO made the right call.
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Fortune broke the news yesterday that HBO has chosen to outsource the backend technology for its upcoming standalone OTT service to MLBAM, abandoning its own efforts to build the necessary technology. Just after the story broke, HBO's CTO Otto Berkes announced that he was leaving the company.
No question, MLBAM has a very strong technology solution, which it uses for its own streaming video offering, and it is used by other media companies as well. Still, it's hard not to see HBO's sudden shift as an early sign of the numerous challenges HBO has ahead of it in launching its OTT service (which is reportedly targeted for April, simultaneous with season 5 of "Game of Thrones").
Following HBO's announcement of HBO OTT last week, a lot of the media coverage has focused on how disruptive it will be to the pay-TV ecosystem. But on today's Comcast Q3 '14 earnings conference call, company executives threw cold water on these prospects, highlighting the challenges and risks that HBO faces in going direct to consumer.
Responding to analysts' questions, NBCU CEO Steve Burke said:
I'm pleased to present the 246th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
HBO's big OTT announcement generated massive coverage this week. Following my initial 8 reactions I shared on Wednesday, in today's podcast, Colin and I hash out whether HBO OTT will be a seismic event (as many people want to believe) or whether it will be a complete dud.
Given the scarcity of details HBO shared, it's still a lot of guesswork. But Colin and I do our best to frame things, including the all-important questions of what content will be included in HBO OTT and what the price point will be.
These decisions put HBO executives in an extraordinarily sensitive position. It's no exaggeration to say HBO OTT has the potential to reshape HBO's future as well as its parent company Time Warner and more broadly, the contours of the entire TV, Hollywood, OTT and sports industries. Note however, that "potential" is the epically operative word here.
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Between HBO's OTT announcement yesterday and CBS's this morning, there're intensifying buzz that the demise of pay-TV, with its expensive multichannel bundles, may finally be upon us. But here's a contrarian thought: what if all of the SVOD activity we're already seeing - plus more that's sure to come - is actually very good news for pay-TV? Before you scoff at me as a head-in-the-sand pay-TV defender, stop and consider the following.
HBO has dropped a bombshell, announcing plans to launch a standalone over-the-top service in the U.S. in 2015. The announcement was extremely short on details, except to say it was targeted to the 80 million U.S. homes that do not currently subscribe to HBO. Here are my 8 quick reactions to the news. Many more thoughts to follow as more details are released.
Categories: Cable Networks
A new wave of viewers has emerged: they're connected, they know what they want to watch, when they want to watch it, and most importantly, how they want to watch it. They are chomping at the bit for premium content that is both accessible and affordable. At the same time, the advent of OTT and connected TV devices has made way for a whole new viewing experience where "television" simply refers to the largest screen in the house.
We all know the TV ecosystem of tomorrow will look vastly different than today's current landscape, but what changes can we expect? Here are four predictions for what trends will emerge over the next few months and years:
I'm pleased to present the 234th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we touch on a few different topics that caught our attention, including Yahoo's deal to pick up another season of "Community," after NBC dropped it (plus we discuss Yahoo's other video moves). Then we turn to CBS's research head's reveal that the network generates up to 20% more revenue per viewer online than on TV.
We also review whether HBO premiering the first episode of its new series "The Leftovers" on Yahoo (plus similar efforts by other premium networks) will succeed. Finally, we're both impressed with Jerry Seinfeld's new Acura ads and how they blur the lines between content and advertising. Seinfeld is a huge online video enthusiast as I noted earlier this year.
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I'm pleased to present the 224th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This was an unusually busy week with many industry announcements, so today's format is a roundup discussion of four items that seemed most significant to us.
First up is HBO's exclusive new licensing deal with Amazon, which is the latest evidence of the surging value of high-quality content libraries. Second is Apple's reveal that it has sold 20 million Apple TVs to date, making it more than just a "hobby." Next, we turn to Netflix, which reported stellar Q1 results earlier this week. Finally, we look at Comcast's Q1 and Time Warner Cable's Q1 results. Both companies reported healthier video subscriber numbers (though Verizon reported a much smaller quarter for FiOS video subscribers). The question still looms how meaningful cord-cutting is in reality.
(Note, we had major technical issues with Skype this week, so in the last one-third of the podcast I sound like I'm in a fish tank. Apologies in advance.)