Posts for 'Cable Networks'

Welcome to this week’s edition of Inside the Stream, the podcast where nScreenMedia’s Chief Analyst Colin Dixon and I take listeners inside the world of streaming video.

YouTube TV and NBCUniversal have become embroiled in a highly public dispute about the details of their distribution agreement. On today’s episode, Colin and Will discuss what’s really behind the dispute and the larger industry shifts that impacting the negotiation.

It is a very complicated situation as each company is trying to hold on to certain industry conventions (such as most favored nation pricing), while also broadening into new areas (such as including Peacock Premium, a streaming service, with underlying YouTube TV subscriptions). Each company also comes to the table with a host of business imperatives, with many driven by Wall Street’s expectations and the overall streaming market’s evolution.

Colin and I try to break things down. As I mention, one significant factor weighing on my assessment of things is Comcast’s gigantic missed opportunity when it decided not to acquire the 70% of Hulu it didn’t already own, back in 2018 when Comcast and Disney were battling over control of Fox (see "Why Comcast Should Take Control of Hulu" from May, 2018). Comcast had a one-time opportunity to vastly expand its footprint in streaming and CTV advertising and likely to position a combined Hulu-Peacock entity for eventual spin-off (see "Quick Math Shows Comcast Missed Out on Almost $6 Billion in Annual Revenue by Not Buying the Rest of Hulu" from January, 2020).

Instead Comcast passed and became a passive owner in Hulu. Comcast will eventually realize a nice return on this stake, but Comcast needs strategic assets for the streaming era far more than it needs additional cash.

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AT&T is spinning off WarnerMedia to Discovery, just 4 1/2 years since it announced it was acquiring Time Warner (as WarnerMedia was then known) and just three years since the deal actually closed, following exhaustive regulatory challenges and litigation. For AT&T, the U-turn in strategy is a tacit admission that it didn’t realize the benefits it touted as the rationale for the deal.

That’s no surprise because, as I said at the time, the benefits were illusory and were completely out of synch with realities that broadband, streaming and connected TV were driving. The press release announcing the Time Warner acquisition was filled with corporate gobbledygook such as “The future of video is mobile and the future of mobile is video” and “Combined company positioned to create new customer choices - from content creation and distribution to a mobile-first experience that’s personal and social.”

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Yesterday, CNBC reported that HBO Max’s upcoming ad-supported tier will be priced at $9.99 per month, a $5 per month discount vs. $14.99 per month for its existing ad-free service. The $5 differential is mostly in line with the approach other subscription services with an ad-supported tier, such as Hulu, Peacock and Paramount+ have taken and is therefore unsurprising.

But there are still many interesting questions about the HBO Max ad-supported tier and how it will be positioned relative to the ad-free tier. One big one is which content will actually carry ads, and which won’t. At AT&T’s recent investor day, WarnerMedia CEO Jason Kilar said “We will not be having advertising inside the HBO original series.” Does “inside” mean that only mid-roll ads are off the table, but pre-rolls and post-rolls will be ok? Or does it mean no ads for HBO original series, period? If the latter, does it imply that Max originals are going to be the main content that will have ads?

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At its ONE21 developer conference this morning, NBCUniversal announced plans to launch its NBCU Audience insights Hub, which will contain all of its first-party audience data. The “proprietary data clean room” will give authorized partners permission to run restricted queries across their and NBCU’s audience data without exposing users’ personally identifiable information.

Using the NBCU data, partners will be able to discover overlaps in their audiences to drive better targeting and cross-platform campaign planning. Partners will gain access to NBCU’s linear TV APIs and certified reach measurement models to improve efficiency and effectiveness. NBCU plans to add to its measurement capabilities so that partners can do their own self-service multi-platform attribution. The clean room framework is being powered by Snowflake and VideoAmp is the first measurement partner to be integrated.

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The number of scripted original TV shows released on broadcast, cable and streaming dropped slightly from 532 in 2019 to 493 in 2020 according to FX Networks, which has been tracking the number for the past 10 years. FX chairman John Landgraf previously dubbed the spiraling number of scripted originals “Peak TV.” Back in 2009 there were 210 scripted originals, according to FX.

The reduction in 2020 is likely a temporary pause due to the effects of Covid shutting down productions and shifting network strategies. That’s because the streaming industry, where the majority of Peak TV originals has come from, is continuing to expand aggressively, in both subscription and ad-supported.

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While lots of attention in 2020 focused on direct-to-consumer (DTC) streaming services, deals announced this first business day of 2021  are a reminder how important third-party distribution remains for premium content. The names and roles of some of these new distributors are different than in the past, but they all underscore how even in a DTC world, third-party partnerships are critical to success.

For example, Discovery highlighted the growing importance of device makers as distribution partners for its DTC discovery+ service which is now live, announcing deals today with Amazon (Fire TV), Apple (iOS devices and Apple TV), Google (Android, Chromecast, Android TV), Microsoft (Xbox), Roku and Samsung (smart TVs).

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I’m pleased to present the 540th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.  

discovery+ is set to launch in the U.S. on January 4th and on this week’s podcast Colin and I share our thoughts on why we’re optimistic about the service, especially in international markets where live sports will be included. We both like the service’s positioning as a complement to major SVOD providers, mainly by focusing on unscripted content.  

Before we get into discovery+, Colin provides some highlights from his new “Making Screen Time Family Time” report which revealed viewing behavior for families with kids under the age of 12. Colin notes the data around co-viewing, especially on weekday mornings.

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Discovery announced its discovery+ streaming service today, with a U.S. launch date of January 4th. There will be an ad-light version for $4.99 per month and an ad-free version for $6.99 per month. The service will roll out in 25 additional countries initially, at localized price points and with different packaging options. The first advertising partners announced include Boston Beer Company, Kraft Heinz, Lowe’s and Toyota.

Verizon will offer new and existing Play More and Get More Unlimited subscribers 12 months free of discovery+. Verizon will give Start and Do More Unlimited subscribers 6 months of discovery+. And new Verizon 5G Home Internet or Fios Gigabit Connection subscribers will also receive 12 months of free discovery+. Verizon offered similar free access to Disney+ at launch (and later the bundle with Hulu and ESPN+) which proved highly effective, driving an estimated 15% of Disney+’s first year subscribers.

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It’s no surprise to anyone that the TV industry is being roiled by huge viewership changes accelerated by the pandemic. Samba TV’s new State of Viewership Quarterly Report for Q3 provides useful insights about the key trends that unfolded in the quarter, following an unprecedented first 6 months of the 2020.

Among Samba TV’s key findings:

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Peacock launched broadly yesterday, though as a Comcast Xfinity broadband subscriber, I’ve had access to it for several months using my Flex device. I’ve spent a bunch of time with it and have been quite impressed. That the Peacock team put it together during the pandemic is quite a feat.

Some of the highlights to me are the very strong UI, the comfort food of popular programs like ’30 Rock,” “Parks and Rec,” “SNL,” and others, plus plenty of movies, the modest ad load of 5 minutes max per hour and the “Channels” which are about 30 virtual linear networks sorted into a traditional program grid.

As I’ve spent time with Peacock and followed the pre-launch coverage it’s become apparent how many different roles Peacock is poised to play for NBCU and its parent Comcast. Here’s a quick rundown:

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In a new survey by Leichtman Research Group, 53% of American adults agreed (selecting 8, 9 or 10 on a 1-10 scale) that they spend more time watching TV during the pandemic. Just 16% selected 1, 2 or 3 that they disagreed that they were spending more time watching TV.

LRG didn’t find significant age, income or gender differences among those agreeing. 56% of pay-TV subscribers agreed while 45% of non-subscribers agreed. The results are from an online survey fielded in April and May. Q1 also saw the worst decline in pay-TV ever, with over 2 million subscribers lost, while SVOD services like Netflix added record subscribers. Lack of live sports, budget tightening and the availability of inexpensive or free OTT services were surely primary drivers.

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I’m pleased to present the 514th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. As always, we hope our listeners are staying well.

This week we share thoughts on the nearly 2.1 million video subscribers that large pay-TV operators lost in Q1. It was a record loss, and approximately half of it was attributable just to AT&T. Virtual pay-TV operators also had a tough first quarter. As a result linear TV networks must look to direct-to-consumer models, which is what ViacomCBS is doing with CBS All Access and Pluto. Subscriber gains have been impressive and we examine the company’s successful strategy.

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NBCUniversal used its One Industry Update livestream to emphasize that improving the viewer and advertiser experience remains a top priority. Laura Molen, President, Advertising Sales and Partnerships, said “this moment has only accelerated our efforts to make the ad experience more engaging for consumers and more effective for advertisers.” She continued, “I know we talk a lot about commercial time - and we’re still committed to bring that number way down.”

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As stay at home guidelines remain in place, it seems like more and more free TV and video are being made available, spanning the short and long ends of the tail (meaning super-premium through user-generated) - and everything in between. Not only does this create more choices for viewers, which will be welcomed, it also means more competition for subscription video services which were already vulnerable to belt-tightening. And for free TV/video that is ad-supported, it means more inventory and choices for advertisers.

Here’s what’s caught my eye just in the past week:

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I’m pleased to present the 505th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

First up this week we discuss the PGA Tour’s $6.3 billion, nine-year rights deal announced this week with CBS, NBC/Golf Channel and ESPN+. The deal will reportedly generate $700 million in fees, up 75% from the current deal’s $400 million. Anyone looking to me to explain how the PGA managed to get this increase, despite so many factors that should have given the TV networks leverage, is going to be disappointed. I just don’t get it, but as a golf fan, it’s still lots of fun to talk about.

One thing is for certain - with the bulk of the new money going to the Tour’s players, the 2020s are going to be a very good period for them. As is to give a sneak preview, when this weekend’s PLAYERS Championship was cancelled after round 1 yesterday, half the purse of $15 million was divided evenly among the field of 144 players. So each player got $52,083, irrespective of how they played in round one. So if average round lasts 4 hours then they earned $13,020 per hour. Or if they shot par 72 they received $723 per shot (including gimme putts). Life is good.

ESPN+ popped up as the streaming partner in the new PGA deal, which provided a good opportunity for Colin to explain the remarkable turnaround Disney has effected with the network. ESPN is now in 98.1 million U.S. homes vs. 98.5 million in 2013. After dipping to 89.7 million in 2017, ESPN successfully negotiated its way onto all major virtual pay-TV operators’ lineups (8.9 million). And it cleverly bundled ESPN+ with Disney+ and Hulu (another 7.5 million) creating significant DTC optionality down the road.  

Reviewing the new PGA deal and ESPN’s bounce back, we believe executives for both entities deserve to be on the Mount Olympus of media negotiators.


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I’m pleased to present the 504th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

On this week’s podcast, Colin and I dig into the question of whether linear TV is dying, dead or just changing? The narrative around  conventional linear entertainment TV networks contracting is hard to argue with, especially for younger viewers moving to OTT. However, sports and news continue to do pretty well. And then there are newer types of linear TV experiences, like those from Jukin Media, that are finding new ways to serve linear audiences.

Colin views Jukin, Xumo, Pluto and other OTT services that offer linear TV options as capitalizing on the “more things change, the more they stay the same” motto In other words, even as people embrace new on-demand options they still value linear TV at certain moments. Colin then discusses how these trends merge with pay-TV operators who are eager to reduce programming expenses. He highlights free, ad-supported Zone.tv, whose 13 “linear-like” channels became available to Cox’s Contour subscribers this week. 

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There are so many dramas playing out in the TV/video business these days it’s hard to keep up. Cord-cutting, M&A, reorganizations, high-profile executive departures, product launches, discounted pricing, eye-popping A-lister salaries….the list goes on and on.

But one particularly intriguing drama that’s been catching my eye lately revolves around YouTube TV and the YES Network. As with everything in the TV/video business, the background is complicated, so here’s the high level cheat sheet:

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I’m pleased to present the 502nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.

First up this week, on the heels of ViacomCBS reporting 11 million subscribers between CBS All Access and Showtime, Colin and I agree that the company is looking well-positioned in OTT. While more needs to be learned about its “House of Brands” strategy and how Pluto TV will be fully leveraged, we both believe ViacomCBS is looking more and more like a serious OTT contender. A big unknown remains what pricing and bundling will be for “CBS All Access Max” as Colin dubs it. And then there’s the impact of pricing pressure from Disney+, Apple TV+, Peacock, etc.

Regardless, ViacomCBS’s OTT success is coming not a moment too soon, because, as we discuss, new UBS data based on Nielsen ratings, shows TV viewership continuing to plunge in Q1 ’20. Net, net, we both believe connected TV advertising is continuing to shape up as TV advertising’s long-term savior…though who falls through the cracks in the meantime remains to be seen.

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Now that NBCU has revealed its launch plan, pricing and forecast for the Peacock streaming service, some quick math shows how much Comcast missed out on by not buying out Disney’s stake in Hulu. VideoNuze readers will recall this is what I proposed back in May 2018 (“Why Comcast Should Take Control of Hulu”) when Comcast and Disney battled to take over Fox. With Disney and Comcast each owning around 30% of Hulu at the time, as well as Fox owning around 30% and AT&T 10%, it was clear that whoever ultimately bought Fox would assume majority ownership of Hulu.

At the time I articulated all the reasons why, as part of any deal Comcast might make to step away from Fox, it should negotiate to take control of Hulu. Instead Comcast prioritized Sky (which it ultimately bought for $39 billion) and made a subsequent deal with Disney to sell off its Hulu stake. Disney also acquired AT&T’s approximately 10% stake in Hulu, making it Hulu’s 100% owner. Taken together, the moves make Disney CEO Bob Iger look like a genius, even if Disney was overcoming a late entry into the streaming party.

Comcast could have likely acquired the 70% or so of Hulu it didn’t own for around $13-15 billion, based on the $5.8 billion Disney ended up paying Comcast for its 30% share (Comcast also has an upside based on Hulu’s valuation  in 2024) Comcast could have done this in reverse. All of this is assuming Disney would have sold its share to Comcast. My hunch is there was a deal to be had if Comcast had said it wouldn’t bid up Fox’s valuation, in turn saving Disney billions of dollars. All in all, it would have been a very modest deal for a company Comcast’s size.

I think all of my original reasons why Comcast should have acquired Hulu still stand up pretty well a year and a half later. But now some quick math also reveals that acquiring could have generated nearly $6 billion/year for Comcast and NBCU and the springboard it could have become for Peacock, before even factoring in cost savings. I suppose it is worth keeping in mind that had the deal gone the other way, Comcast wouldn’t have received the $5.8 billion for its share in Hulu, but then again Comcast didn’t need the cash, so does that really matter?

In my view there are 5 key things to understand, 3 that relate to subscription revenue and 2 that relate to advertising revenue.

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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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