VideoNuze Posts

I’m pleased to present the 431st edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

It’s been Q2 earnings season, which provides a valuable opportunity to check in on how different companies’ OTT strategies are flowing through to their financial performance. On today’s podcast Colin and I talk about two companies whose OTT fortunes are moving in opposite directions.

Moving the wrong way is Dish and its Sling TV skinny bundle. Sling TV was the first to market in the category several years ago. Though it quickly gained over 2 million subscribers, growth slowed to just 41K additions last quarter as others boomed. As Colin and I discuss, a key weakness in its service is the lack of broadcast channels. The other big skinny bundles, YouTube TV, Hulu Live and DirecTV Now have all decided to pay top dollar to include them, which is helping fuel their growth. Sling TV is at a competitive disadvantage requiring subscribers to install antennas which many people can’t or won’t do.

All broadcasters are benefiting from the shift to skinny bundles, but CBS’s Q2 results show that its OTT success extends further, to direct-to-consumer, targeted advertising and SVOD production, as well. CBS is benefiting from decisions it made years ago to retain digital rights (most famously by not joining Hulu), even though it wasn’t clear back then how the monetization of them would fully unfold.

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Former professional golfer Greg Norman’s Shark Experience gives golfers a range of video and other media options while on the course. Shark Experience’s new software development partner is Edison Interactive, an in-ride digital media firm co-founded by Jeremy Ostermiller, formerly CEO of Altitude Digital, a video ad tech provider which merged with Genesis Media last year.

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On Disney’s earnings call earlier this week, CEO Bob Iger was asked about the company’s video app strategy - would it be interested in launching one big “aggregated” app housing all of its content, or will it continue to pursue multiple apps with each targeting particular audience segments?

It’s an interesting question because it goes to the heart of whether consumers prefer a big basket of content at one price (the way the pay-TV industry’s multichannel bundle has been effectively offered) or more discrete content services that consumers individually choose to pay for (as has emerged with streaming video and music services, plus a wide variety of other apps)?

I believe Iger’s explanation of Disney’s app strategy was right on the mark:

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CBS’s Q2 ’18 results reported last week, along with more details shared on its earnings call, reveal how the company is hitting on all OTT cylinders. CBS has become a shining example of how a traditional media company has been able to capitalize on the significant new opportunities that OTT presents in direct-to-consumer, skinny bundles, targeted advertising and producing for big SVOD providers.

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Jeffrey Katzenberg’s NewTV has officially announced a $1 billion financing led by Madrone Capital Partners and including all of the studios, Goldman Sachs, JP Morgan Chase, Liberty Global and Alibaba. Katzenberg has teamed up with Meg Whitman, formerly CEO of Hewlett Packard and eBay, whom he named CEO of NewTV earlier this year.

NewTV is the biggest bet yet on mobile video, a sector that has been a graveyard for other ventures (e.g. Verizon’s Go90, Samung’s Milk, Comcast’s Watchable, Vessel, Vine, etc.). Katzenberg believes things will be different for NewTV (still a placeholder name), by licensing short-form, high-quality content from studios and then creating two subscription tiers, one with a full ad load and one with a lighter ad load.
Katzenberg told the WSJ that NewTV programming could run over $100K per minute, comparable to network TV. Episodes will run 10 minutes or less.

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I’m pleased to present the 430th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

This week Nielsen released its Q1 ’18 Total Audience Report, which led to some media coverage that linear TV still dominates consumer viewing. However, Colin dug into the data and showed that while this is true for older consumers, for younger ones, the exact opposite is occurring: linear TV is becoming less and less relevant. Colin shares his analysis.

On-demand viewing’s importance was underscored yet again this week by Comcast striking a deal to integrate Amazon Prime Video into its X1 experience. The move builds on prior Netflix and YouTube integrations, helping Comcast broaden X1’s value proposition. However, neither of us thinks the move materially addresses aggressive competition from skinny bundles that drove up Comcast’s video subscriber losses in Q2.

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Click here to listen to the podcast (23 minutes, 28 seconds)

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The VideoNuze podcast is also available in iTunes...subscribe today!

Comcast will integrate Amazon Prime Video into its X1 platform later this year. Amazon becomes the third major streaming service to be included in X1, following Netflix in 2016 (see here) and YouTube in 2017 (see here). Comcast said it’s the first pay-TV operator to integrate Amazon.

As with the other services, Amazon’s content will become available to X1 users as part of the X1 UI. Comcast is continuing to position X1 as a streamlined gateway to both its own content and also to third-party content. It’s a smart move by Comcast to build more value into the X1, helping justify subscribers spending $10 or more per month to rent the X1 set-top box (although Comcast has recently been emphasizing it sees X1 also as an interface, living on smart TVs and devices, as well).

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Extreme Reach has released its Q2 ’18 Video Advertising Benchmarks report, further supporting the rise of connected TV viewing. In the quarter, CTV accounted for 38% of ad impressions, more than double their share of 18% in Q2 ’17. Mobile followed with a 30% share, down slightly from a 33% share in Q2 ’17. Desktop and table both slumped further, with the former dropping from 35% to 23% and the latter dropping from 15% to 9%.

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