I’m pleased to present the 367th 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. There's still time to schedule a meeting.
First up on this week’s podcast we discuss Netflix’s Q1 earnings which were released earlier this week. Netflix came up a bit short of its own forecasts for both domestic and international subscribers. Colin provides his analysis of what happened and what might be ahead for Netflix in 2017.
Then we shift gears to discuss how TV advertising is increasingly about data-enablement. I share further details on my post yesterday on Videology’s research, and also explain iSpot.tv’s new conversion solution. TV is in a race to provide improved targeting and better ROI to advertisers who are being avidly pursued by Google, Facebook and other digital competitors.
Listen in to learn more!
Click here to listen to the podcast (24 minutes, 26 seconds)
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).
Time Warner’s CEO Jeff Bewkes said on this morning’s earnings call that HBO Now has passed the 2 million subscriber mark. That would be an increase from the 800K HBO Now had at the end of 2015.
On the one hand, gaining 2 million subscribers since launching HBO Now in April, 2015 is a positive sign of market acceptance for the SVOD service, which entered the market relatively late. But on the other hand, the pace of HBO Now’s monthly subscriber additions seems static, suggesting the service has not been able to accelerate its momentum.
I’m pleased to present the 355th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we discuss four topics that caught our attention and we wrote about: research from GFK MRI that 30% of U.S. millennials are now “cordless” (here), Netflix’s move into reality TV programming (here); Google enabling YouTube ad targeting based on users’ searches (here) and the new chairman of the FCC, Ajit Pai (here). We dig into all of these topics and discuss their implications.
Listen in to learn more!
Click here to listen to the podcast (24 minutes, 49 seconds)
Talk about showing up late to the party: the WSJ is reporting that Apple is now planning to invest in original scripted TV shows and movies. Whether the move actually materializes though is unclear. But if it does, it would be happening years after countless false starts and rumors about the company’s plans to build out a content strategy. Importantly, it would also happen as the number of scripted TV shows rocketed to over 450 in 2016, marked by “Peak TV’s” escalating budgets and intense competition.
According the WSJ article, Apple is engaged with various producers and could be offering scripted TV shows by the end of 2017. Apple’s commitment still seems modest by the standards of Netflix, Amazon and numerous TV networks, with just a handful of productions planned.
Just prior to the holiday break FX released its latest update on “Peak TV” - the name company president John Landgraf coined a couple years ago to describe the exploding number of original scripted TV programs being produced. According to FX, which is tracking Peak TV, in 2016 there were 455 scripted originals, up from 421 in 2015 and 182 in 2002.
In that 14-year time period, the biggest volume contributor has been ad-supported cable TV networks, increasing from 30 shows in ’02 to 181 shows in ’16. But zeroing in on just the last 3 years, it’s the SVOD providers (Netflix, Amazon and Hulu) that have had the biggest impact. The group tripled their output from 24 shows in ’13 to 93 in ’16 while ad-supported cable TV rose from 161 to 181, broadcast TV bumped up from 131 to 145 and premium TV (HBO, Showtime, etc.) was basically flat, from 33 in ’13 to 36 in ’16. Put another way, in 2013, SVOD accounted for just 6.9% of all scripted TV and in 2016 they tripled their share to 20.4%.
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.
In a move that was long, long overdue, Netflix announced yesterday that it was enabling downloading of content to iOS and Android mobile devices. Not all shows and movies are available for download, but importantly, it looks like most, if not all, of Netflix’s original productions are included. I tried downloading last night and it worked perfectly.
I’ve been saying since 2012 that downloading is a bona fide killer app, after I first started using TiVo’s excellent downloading feature to watch recordings on my iPad when traveling. Amazon totally understood the value of downloading as well, enabling it back in September, 2015. In a press release that both touted the new feature and implicitly tweaked Netflix, Amazon proclaimed it as “The First and Only Subscription Streaming Service to Offer This Feature.”
I'm pleased to present the 347th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
On this week’s podcast we discuss Facebook’s video ambitions. Colin was in London at the OTT TV World Summit where he saw a fascinating presentation by Matthew Corbin, who’s in global product marketing for Facebook. Colin shares highlights of what he learned, including how Facebook thinks of itself as the “world’s discovery agent.” Matthew said Facebook thinks of itself “not as a broadcast network, but as a network of broadcasters,” which feels like an apt description. Combined with Facebook’s targeting capabilities, this translates to lots of potential.
On Facebook’s Q3 ’16 earnings call, CEO Mark Zuckerberg also highlighted how he wants video to be at the center of all of Facebook’s apps and services. It’s becoming clearer that the primary way Facebook is going to be able to continue its torrid revenue growth is by shifting over more TV ad spending, hence the push toward video.
After discussing Facebook, we shift gears and spend 5 minutes reviewing the excellent Comcast-Netflix integration which I wrote about earlier this week.
Listen in to learn more!
Click here to listen to the podcast (23 minutes, 26 seconds)
Comcast announced on Friday that the integration of Netflix into its X1 set-top box would launch this week. But when I checked my X1 on Friday evening it was already available, so I spent some time over the weekend giving it a test drive. Below is a 12-minute demo video I created that highlights the key benefits of the integration and how expertly it was done.
As VideoNuze readers know, I’ve had the X1 since its debut, back in July, 2012. I was immediately enthusiastic about its clean and highly responsive web-like UI as well as its ability to quickly retrieve on-demand content. More recently, the voice-powered remote control has delivered even more value. But the biggest potential benefit I’ve always envisioned for X1 was its ability to handle IP apps, giving Comcast a breakthrough way to provide a seamless experience between its own video services and those delivered over-the-top via broadband (e.g. Netflix, Amazon, YouTube, etc.).
It seems the only thing predictable about Netflix’s subscriber growth these days is its unpredictability. After badly missing its target subscriber additions both domestically and internationally in Q2 ’16, yesterday’s Q3 ’16 earnings report showed Netflix beating its Q3 forecast, including by a huge amount in international. Domestically, Netflix added 370K subscribers vs. its forecast of 300K, while internationally it added 3.2 million, well ahead of the 2 million it forecast.
Yesterday YouTube announced YouTube Go, a new mobile app that provides sophisticated new features for offline video use. While YouTube Go will initially only be available in India, it will no doubt be introduced in other geographies once proven in.
YouTube Go builds on YouTube’s embrace of downloading for offline viewing in India and other Asian territories begun nearly two years ago with the introduction of YouTube Offline, which allowed downloading of certain videos for viewing within 48 hours. Earlier this year YouTube added the “Smart Offline” feature that allows users to schedule their downloads to take advantage of off-peak data use.
Yesterday, Canadian streaming service shomi (pronounced “Show Me”) announced that it was closing down as of November 30th. The news came just two years after its launch by two of Canada’s largest pay-TV operators, Shaw Communications and Rogers Communications. shomi’s future was in jeopardy ever since Shaw essentially exited the content business by selling all of its TV networks to Corus Entertainment for C$2.65 billion in April in order to focus on its pay-TV and broadband businesses. Shaw subsequently took a C$51 million write down for shomi. Rogers will now take a C$100-C$140 million hit.
7Park Data has released an analysis of OTT viewership, finding among other things, that “Orange is the New Black” was Netflix’s most popular show in June in 15 of the 16 countries analyzed (in Ecuador OITNB was fourth, with “Full House” in the top spot). OITNB had its season 4 premier on June 16th, driving a 544% viewership increase from May to June.
Although Netflix released 12 of its originals’ season premieres in June, OITNB was the only one among the top 20 most-viewed. Following OITNB globally was “How I Met Your Mother,” “Pretty Little Liars,” “Supernatural” and “Family Guy.” In the U.S., specifically, OITNB was followed by “Family Guy,” “The Office,” “American Dad!” and “Friends.”
Yesterday Amazon unveiled new search and recommendation features for its Fire TV and Fire TV Stick devices, aimed squarely at improving users’ experience with third-party SVOD services. The device updates are automatically downloaded and will enable universal voice search to over 75 video apps, including Netflix, HBO GO and soon HBO Now, as well as personalized recommendations across apps to be visible in custom rows on the Fire TV home page.
Both updates continue the evolution of Fire TV’s role as a hub for SVOD and free video services. That’s not a novel approach, as other devices like Roku, Chromecast and Apple TV are also aiming to be central hubs for online video. And arguably, Comcast is starting to take its first steps for X1 to also become a hub, by announcing plans to incorporate Netflix later this year.
I'm pleased to present the 332nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Earlier this week Netflix released its Q2 ’16 results, showing abysmal subscriber growth both domestically and internationally. Netflix largely blamed the downturns on rate increases that kicked in for longer-term subscribers and the media coverage of them.
In today’s podcast, Colin and I dig into what we believe is happening. As we both wrote earlier this week (here and here), competition and market saturation are playing a big role, resulting in much more fragile subscriber retention. Meanwhile Netflix may have miscalculated just how big the international opportunity really is, especially in newer markets. In particular, we’re both mystified how Netflix could have launched in 130 countries in January, and yet seen international subscriber additions decline by 36% year-over-year.
Overall, it’s an incredibly murky picture and the next few quarters will be pivotal in understanding how much growth still lies ahead for Netflix.
Listen now to learn more!
Click here to listen to the podcast (24 minutes, 20 seconds)
Netflix reported disappointing domestic and international results for Q2 ’16, extending the company’s bumpy and unpredictable growth. Netflix added just 160K subscribers domestically (down from 900K in Q2 ’15, a quarter which now looks like it was an anomaly after all) and below its own 500K forecast. Meanwhile international subscribers increased by 1.52 million (vs. 2.37 million in Q2 ’15) and below the company’s forecast of 2 million additions.
In both cases, Netflix blamed price increases that were felt as “un-grandfathering” of older subscribers kicked in, which in turn led to higher churn. In the U.S. Netflix went one step further, blaming press coverage of the un-grandfathering process, which it believes led some subscribers to believe a new price increase was coming.
I'm pleased to present the 330th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Colin and I were both very enthusiastic about news earlier this week that Comcast will integrate Netflix into its X1 set-top box, a move we’ve been advocating for a while. In this week’s podcast we discuss how complicated this negotiation must have been, and why joint subscribers will be the big winners.
Surely a motivating factor for Comcast was the acknowledgment that viewers are spending more time on SVOD, which new research from IBM Cloud Video highlighted this week.
More specifically, the research showed how important video has become for Amazon Prime members, with 75% of them now watching. By not charging for video in Prime, Amazon is potentially a big disruptor in the video/TV industry down the road.
Listen now to learn more!
Click here to listen to the podcast (24 minutes, 9 seconds)
Three-quarters of Amazon Prime members are watching the service’s video offerings, according to new survey data released by IBM Cloud Video. 61% of Prime members surveyed said they signed up for the service for the shopping benefits, but also watch the video, while another 14% said they signed up specifically for the video. Just 7% of members surveyed said they didn’t know about the video offerings, with another 18% saying they were aware, but didn’t watch.
Yesterday, Recode reported that Comcast will integrate Netflix into its X1 set-top box. Loyal VideoNuze readers know that I’ve been advocating for this type of partnership for almost two years, back to when I articulated the benefits in “Why the Timing is Now Perfect for a Netflix-Comcast Partner Deal” in October, 2014. There are lots of benefits to Comcast and Netflix by partnering (as I’ll further explain below), but the biggest winners once the integration is complete later this year, are the companies’ mutual viewers.