I’m pleased to present the 498th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

On this week’s podcast, we do a deep dive into Netflix’s Q4 ’19 results (reported earlier this week), and what they imply for 2020. Colin mostly focuses his comments on the decelerating growth rate in international subscriber additions and the ARPU squeeze that’s coming this year.

My focus is on the all-important domestic or “UCAN” (U.S. + Canada) region. Based solely on Netflix’s prior results and its own Q1 ’20 global subscriber addition forecast of 7 million, I think there’s at least a 50-50 chance Netflix will lose subscribers in UCAN in Q1 ’20. Just two years ago, this would have been an unimaginable thing to say; remember in Q1 ’18 it gained 2.28 million U.S. subscribers and in Q1 ’19 it gained 1.74 million.

That’s all before talking about Q2 ’20 where it will almost certainly lose UCAN subscribers, at a multiple of the 130K it lost in Q2 ’19, given the new competitive landscape. Netflix really needs to launch a lower-priced ad-supported tier, but yet again Netflix management rejected the idea, this time for inexplicable reasons.

Add it all up and Netflix is in for a bumpy ride in 2020. Meanwhile, since announcing its results on Tuesday after the market’s close, Netflix stock is up over $30 (about 10%, or around $15 billion extra market capitalization), once again proving that speculators simply can’t quit the stock regardless of the company’s actual performance or prospects.
 
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Netflix reported its Q4 ’19 and full year results yesterday, exposing the cold hard reality it is facing in the U.S. While the company gained 8.8 million subscribers globally (ahead of its 7.6 million forecast), it gained just 420K in the U.S. specifically (compared to 600K forecast). To put the 420K into more context, it’s by far the lowest Q4 US sub add since Q4 ’11 following the Qwikster debacle. It’s the first time since then that U.S. sub additions have fallen below 1 million in the seasonally strong Q4. And it’s down a whopping 79% vs. just 2 years ago, in Q4 ’17 when Netflix added 1.98 million U.S. subscribers.

Now some will say the “law of large numbers” is catching up with Netflix and that’s true to an extent; it’s a lot harder to add a million subscribers off a base of 60 million than it is off a base of 20 million. But this explanation just scratches the surface of what’s happening now at Netflix.

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I’m pleased to present the 497th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

This week Colin and I share our initial impressions of Peacock, NBCU’s new streaming service. Our impressions are based on watching the investor day presentations yesterday. We break down our discussion into covering Peacock’s economics, release plan and user experience. Again these are all our first impressions and not meant to be an exhaustive analysis.

Perhaps the most interesting thing to me is that Peacock’s Premium tier viewer monetization is below its two nearest ad-supported comparables, Hulu and CBS All Access. Both charge $6 per month while Peacock is $5 per month. Peacock is also ensuring maximum ad load of just 5 minutes per hour, which it forecast would amount to $6-7 per viewer, compared to the $7-10 per viewer Hulu is currently generating.

Peacock’s pricing and financial projections remind me why I still believe Comcast should have bought the remaining 70% of Hulu it didn’t own, as I wrote in May, 2018. It feels like an even bigger missed opportunity now. It probably would have cost Comcast around $12-$14 billion to do so, a fraction of the  $39 billion it paid to acquire Sky - and it would have been more strategic.
 
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This afternoon at 4pm ET, Comcast will host an Investor Meeting to share details about NBCUniversal’s upcoming Peacock streaming service. It is a session comparable to what Disney and Apple did last year for Disney+ and Apple TV+ respectively (and what AT&T/WarnerMedia will do for HBO Max). So we all get to learn all the official information about Peacock: pricing, availability, content, overall strategy/fit with existing businesses, marketing, etc.

Following the format of other investor days, we will hear from senior NBCU and Peacock executives, and likely someone from Comcast. Matt Strauss, an old friend of mine, who was moved over from Comcast to become Chairman of Peacock and NBCUniversal Digital Enterprises late last year, will no doubt be the maestro of this afternoon’s session.  All the dribs and drabs of information that have been shared by the company previously will be reconciled with all of the rumors and speculation that have gurgled up from around the web.

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