Friday, February 23, 2024, 10:23 AM ET|
This week we discuss the logic of Amazon shutting down Freevee, which Adweek reported, and Amazon denied. We see a number of pros and cons to the move. Meanwhile Nielsen said that YouTube was once again the number one streaming service used on CTVs, ahead of Netflix and everyone else. This was the twelfth month in row for YouTube and we explore the reasons behind it.
Finally the rumor mill is swirling that Peacock and Paramount+ may combine forces, and we dig into how it would benefit both entities.
Listen to the podcast to learn more (25 minutes, 26 seconds)
Friday, January 26, 2024, 11:33 AM ET|
Netflix added 13.1 million global subscribers in Q4 ’23, its best fourth quarter ever. As we discuss, the company is capitalizing on the introduction of paid sharing and a lower priced ad-supported tier. Paid sharing, which requires those who were using someone else’s login credentials to start their own subscription, has been especially effective. Netflix designed a smart strategy to eliminate this long-valued benefit. It could have become a PR nightmare, but instead has rolled out seamlessly.
Netflix said that the ad-supported tier now accounts for an impressive 40% of new subscriptions in markets where it is available. In yet another move to optimize revenue, Netflix is discontinuing its $11.99 per month Basic plan, which will drive more new subscribers to the ad tier or the least expensive ad-free tier which is $15.49 per month.
Listen to the podcast to learn more (32 minutes, 20 seconds)
Friday, December 15, 2023, 11:42 AM ET|
On this week’s Inside the Stream Colin and I dig into Netflix’s first engagement report, released earlier this week. The report details what subscribers watched during the January-June 2023 period. It includes viewership of over 18,000 titles, which comprises 99% of all viewing on the service. Colin has used the data to make several calculations about Netflix’s overall business. Hopefully other streaming services will share similar data in the future.
Listen to the podcast to learn more (24 minutes, 30 seconds)
Friday, December 8, 2023, 11:53 AM ET|
On this week’s Inside the Stream Colin and I first discuss the trend toward SVOD services being bundled with one another. We agree the approach makes sense to cut churn and increase the lifetime value of subscribers. Next, Peacock has hit 30 million paying subscribers, which we believe is a healthy milestone for the three year-old service, though its losses are in the billions of dollars.
Meanwhile, WB Discovery has launched 11 FAST channels on Freevee, and Colin shares his thoughts on why the company could be more aggressive with FASTs. Last up, Disney moved the needle on integrating Hulu by adding a tile in the Disney+ UI for a beta group of subscribers.
Listen to the podcast to learn more (31 minutes, 43 seconds)
Friday, November 10, 2023, 11:15 AM ET|
It’s earnings season, and on this week’s podcast, Colin and I discuss results from Disney, Roku, WB Discovery and Dish. The four companies’ subscriber counts, profitability and shifting business models all provide insights into larger industry trends and challenges.
Listen to the podcast to learn more (37 minutes, 36 seconds)
Friday, November 3, 2023, 12:13 PM ET|
Disney has officially begun buying out Comcast’s 33% ownership in Hulu, for at least $8.6 billion. Hulu will become a centerpiece of Disney’s strategy to appeal to a broad range of audiences. Coincidentally former Hulu CEO Jason Kilar recently shared his recommendations for how media companies can succeed in streaming. Can Disney’s big Hulu bet deliver on Kilar’s vision?
Listen to the podcast to learn more (31 minutes, 35 seconds)
Friday, September 1, 2023, 12:31 PM ET|
This week on Inside the Stream, Colin and I discuss Comscore’s 7th annual State of Streaming report, which was just released. For CTV homes, Netflix leads with 74% reach, followed by YouTube, with 71%, though YouTube has 47 hours of viewing time per month, compared with 35 hours for Netflix. Despite billions of dollars of content and branding investments, broadcasters’ SVOD services lag in both metrics, though their FASTs, especially Pluto TV and and Tubi, are performing well.
Listen to the podcast to learn more (23 minutes, 39 seconds)
Friday, August 11, 2023, 12:55 PM ET|
Disney reported its fiscal Q3 2023 this week, with Disney+ global subscribers (excluding Disney+ Hotstar) growing 800K to end at 105.7 million. Both ESPN+ and Hulu stayed approximately flat too. The sore point was Disney+ Hotstar, which lost 12.5 million subscribers to end at 40.4 million, primarily due to the loss of IPL cricket.
It is less clear what’s ahead for Disney+ subscribers with another $3 per month price increase planned, taking the ad-free tier up to $13.99 per month. With the ad-supported tier remaining at $8 per month, the company said it is guiding new subscribers to that tier. Meanwhile Disney will also begin imposing password sharing restrictions like Netflix has. Add in the strikes which will constrain new content, and it seems like elevated churn is on the way.
Colin and I discuss all of these changes and more, as Disney continues to evolve.
Listen to the podcast to learn more (31 minutes, 29 seconds)
Friday, June 2, 2023, 9:57 AM ET|
Some big SVOD services are cutting content from their libraries, including certain originals. Most prominently, Disney recently said it’s taking a $1.5-$1.8 billion impairment charge related to content cuts.
The idea of “rotating” content in and out of libraries is nothing new in SVOD, but as profitability becomes paramount, the current cuts seem to be deeper and signal a shift in thinking. Whereas the past has been about “more is more” when building libraries, a “less is more” sentiment appears to be taking over.
The question we explore is whether and to what extent subscribers will react? After all, if the content being cut is lightly viewed, then few people will notice (“if a tree falls in the forrest….”), and presumably the impact would be minimal. But, as Colin notes, there’s an audience for everything, and with SVOD subscribers having been spoiled by a bounty of riches, a perception of reduced choices could hit home.
One thought is that if this content can’t make it on SVOD, perhaps it will find a home on a FAST service. But that might not be an option, as Colin refers to recent discussions indicating FAST providers have become more disciplined given the explosion of free content and their push for profitability as well.
Net, net, as we discuss, there may well be content that isn’t viable on streaming. It’s not unprecedented; there’s lots of content that didn’t make the transition from VHS to digital, because the economics just weren’t there.
Listen to the podcast to learn more (36 minutes, 41 seconds)
Friday, May 26, 2023, 8:42 AM ET|
Netflix has begun rolling out its account sharing limitations in the U.S.. The rollout effectively puts an end to one of the most-loved features of Netflix subscriptions - the ability to share log-in credentials with family members and others. For years Netflix “looked the other way” on this activity as it sought to bake Netflix usage into as many viewers’ lives as possible.
But all good things come to an end. With subscriber growth slowing as the market matures, Netflix has flipped its approach, linking a subscription to a household, meaning anyone that who doesn’t live under the same roof does not qualify. Those people will need to start an “extra member” account, being offered for $8 per month. We discuss the pricing decision as well, and how it relates to the $8 per month ad-supported plan.
We also discuss the launch of Comcast’s new streaming service NOW TV. Neither of us believes there’s much value and will likely have only limited appeal. We explain why.
At the beginning of the podcast I also mention a new report released by the Goteborg Film Festival, the largest festival in the Nordics, called the “Nostradamus Report: Everything Changing All At Once.” I was among a small group of industry professionals interviewed for the report, which is extremely well-done and comprehensive. It’s free and for anyone looking to get a strong overview of our evolving industry, I highly recommend downloading it.
Listen to the podcast to learn more (35 minutes, 31 seconds)
Friday, May 12, 2023, 10:28 AM ET|
Most media and technology companies have now reported Q1 ’23 results. We dig into who’s up, who’s down and who’s pick ‘em, and where they all might be headed. We share all this with the caveat that one quarter’s results are not the final word on a company’s ability to survive and thrive going forward. We hope we’re not in any way contributing to the short-term, quarterly performance myopia so common on Wall Street.
Rather, we’re looking at these companies’ results in the context of prior results, the competitive landscape and their particular products’/services’ positioning. All while trying to do some basic “pattern recognition” - what have we seen before and how is this likely to play out in TV and video. Our discussion is primarily focused on Netflix, Roku, Amazon, AMC, Disney, Comcast, Vizio, YouTube, The Trade Desk, Paramount, Diamond Sports Group, Tegna, Dish and how they’re sorting themselves in the up, down and pick ‘em categories.
Listen to the podcast to learn more (38 minutes, 50 seconds)
Inside the Stream Podcast: Netflix’s Q1 ’23 Suggests Ad Tier Launch and Account-Sharing Curbs Will Boost RevenueFriday, April 21, 2023, 9:47 AM ET|
Back in our Oct. 21, 2022 podcast, “Netflix is Poised for 2023 Revenue Growth,” Colin and I articulated all the reasons we were optimistic about Netflix’s upside in the new year. Primarily we were focused on its newly launched $7/month “Basic with ads” tier and its plans to eliminate password sharing throughout the world.
Flash forward 7 months, and Netflix provided its first tangible results and commentary from the initiatives, as well as optimistic signs of where things go from here. In today’s podcast, Colin and I dig into these signs, including most prominently Netflix’s disclosure that $7/month "Basic with ads" subscribers already produce a higher average monthly revenue than do its $15.50/month "Standard" plan (ad-free) subscribers. Some basic math reveals that "Basic with ads" subscribers drive at least $8.50/month in ad revenue for Netflix, which in turn means that aproximately 55% ($8.50 / $15.50) of "Basic with ads" subscribers’ total revenue is already derived from ads, not subscriber payments.
That Netflix accomplished all of this despite 1) it still being very early days for the ad offering, 2) a massive headwind in the ad business due to recession/etc. worries, 3) all of its ad revenue being “linear TV replacement” or upper-funnel reach and frequency inventory, with nothing yet from more valuable full/lower funnel offerings, suggests the ad business is already a big win for Netflix and has huge potential.
(At this point I can’t resist noting that I have been badgering Netflix for years to launch a lower-priced ad-supported tier because of the upside…see “Why Netflix Will Launch an Ad-Supported Tier in 2020” from Dec. ’19, “6 Reasons Why Netflix Should Launch an Ad-Supported Tier Now” from Mar. ’20, and “Revisiting Why Netflix Should Launch an Ad-Supported Tier” from Mar. ’21 for a sample of my haranguing. So, in the category of “better late than never,” hallelujah, Netflix finally, finally put aside its religious objections to advertising and saw the light.)
Friday, April 14, 2023, 11:54 AM ET|
This week on Inside the Stream we focus on two main topics: first, is Warner Bros. Discovery’s decision to brand/bundle its streaming services under “Max” going to be successful, or is it going to be “Min” (as in have Minimum impact)? There’s little daylight between how Colin and I see things.
Of all the many issues, to me the most worrisome is the fact that the discovery+ library is being thrown into Max for no additional cost. That means WBD assigns its incremental, measurable value in the bundle at $0.
Next we turn our attention to the dynamics in the CTV/device industry. Colin is excited about a new initiative Google unveiled this week, where it provides improved guide/UI access to 800+ FAST channels. Colin sees this as a meaningful competitive differentiator, and believes Google TV / Android TV will grow briskly outside of the U.S. and even gain a few points of market share domestically.
It’s hard to argue against better discovery being valuable, yet I don’t see it as a game-changer in the CTV space, at least domestically, because, well, to start with, very few people actually use Google TV domestically.
In fact, according to insights from Beachfront’s CTV Marketplace for H2 2022, Google TV’s share of impression volume was a measly 1.9%. Meanwhile Roku, the perennial market share leader in the U.S., notched 39.2% of impressions, roughly consistent with the range I’ve seen for Roku for years.
While Colin and I agree that Google TV / YouTube / YouTube TV is a formidable collection of assets for Google, I remain quite sanguine about Roku’s ability to compete in the land of the giants. There have been no shortage of Roku naysayers over the years, since I wrote “Scrappy Roku Makes More Deals, Keeps Elbowing Its Way Into the Big Leagues” back in January, 2013, following a keynote interview I did with CEO/Founder Anthony Wood at NATPE in Miami.
In the 10 years since, Roku has more than held its own, and is arguably the most innovative company in the ad industry. Roku is focused and relentless, and it has a very strong talent bench. As I put it in 2013, Roku remains “more a work horse than a show horse.” As for Google, a sub-2% CTV/device share after all these years? The good news: there (continues to be) really only one way to go from here.
Listen to the podcast to learn more (36 minutes, 47 seconds)
Friday, April 7, 2023, 1:31 PM ET|
Each week on "Inside the Stream" Colin and I try to share fact-based conclusions about critical industry issues. Listeners have continually told us that they derive value from having a weekly resource that helps demystify the confusing cross-currents found in the daily headlines. By seeing things just a little more clearly, listeners are able to be more effective in their roles and hopefully help their companies succeed.
However, given all of the various independent and interdependent industry drivers, it’s impossible for anyone to have a “crystal ball” on where things ultimately land. So today, Colin and I take a step back to consider all of the different factors that we believe will influence average SVOD spending going forward (in truth the acronym SVOD is practically outmoded with the leakage of live sports from pay-TV to IP/mobile networks and the prevalence of hybrid paid/ad-supported services, so it might just be better to call everything a “streaming service”). We were prompted to consider the question based on a new forecast from Ampere.
Colin and I agree on one thing up front: average U.S. household spending on SVOD/streaming services will be higher in 5 years than it is now. This conclusion reflects simple Price x Quantity (“P x Q”) economics; prices for streaming services are only going in one direction, and the number of streaming services the average household subscribes to will almost certainly increase as content proliferates and sports migrates to streaming.
But how much higher spending will be is a function of many different factors. We identify 6-8 of these factors and try to flesh out their respective influences. Whether they will all net out to average SVOD spending increasing by 2%, 6%,12% or something else vs. current is anyone’s best educated guess. But educated guesses are better than nothing.
Listen to the podcast to learn more (29 minutes, 34 seconds) and let us know what you think.
Inside the Stream Podcast: Diamond Sports’ Bankruptcy, HBO Max’s Confusing Pricing; YouTube’s Multiview; FAST’s GrowthFriday, March 17, 2023, 12:16 PM ET|
This week on Inside the Stream Colin and I do an “around the horn” of four significant industry topics. We lead off with the expected bankruptcy filing of Diamond Sports Group earlier this week, the largest owner of regional sports networks (RSNs), resulting in a complete wipeout of the equity-holders. Where to from here is anyone’s best guess; but I reiterate my stance that sports teams’ franchise values and players’ salaries have already peaked. When the dominant player in an industry - with over 50% market share - goes belly up, nothing good happens next.
Next up is an update on WBD’s planned pricing strategy for its combined HBO Max and discovery+ streaming service launching soon. Colin’s been all over this one for months and is really scratching his head, as am I.
In time for March Madness, YouTube TV has launched a new feature called “multiview” allowing subscribers to stream a mosaic of four pre-selected games and choose which audio feed they prefer. I think it’s really cool, and as you’ll hear in real-time I realize that it might mean YouTube TV “automagically” just quadrupled its ad inventory for multiview users. If so, that’s a neat trick; new CEO Neal Mohan is off to an even stronger start than I expected!
Finally, Colin gives a short wrap-up of the latest doings in the burgeoning FAST market. It’s getting harder and harder to keep up.
Listen to the podcast to learn more (27 minutes, 11 seconds)
Friday, February 10, 2023, 10:16 AM ET|
Disney reported its fiscal 2023 first quarter this week, the first since Bob Iger returned to the CEO role. While other parts of the business are doing reasonably well, for Direct-to-Consumer, which includes Disney+, Hulu and ESPN+, subscriber gains were weak and ARPU was down. Iger also shared that Disney will cut its content spending by $3 billion this year. For Colin and me, all of that makes Disney’s DTC future seem murky.
Disney also plans to lay off 7,000 employees and take a $5.5 billion charge, while also stating it intends to restore its dividend by the end of the year - all a big victory for Wall Street. The layoff continues a disturbing pattern by most large tech and media companies (a topic about which I do a mini-rant during the podcast, sorry) which has put CEOs' lack of accountability on full display and smashed any delusions anyone might have had about any sort of an employer-employee "social contract" still existing (again sorry, I digress)
The most meaningful quote from Disney’s earnings call on late Wednesday was when Iger said “…the streaming business, which I believe is the future and has been growing, is not delivering basically the kind of profitability or bottom-line results that the linear business delivered for us over a few decades.”
Nor will it ever.
As Colin and I discuss this week (and as we’ve discussed ad nauseam in the past), the linear business model was based on the pay-TV multichannel bundle, which was the very definition of artificial economics. In the bundle, lots and lots of channels were delivered for a single price. The bundle’s monthly price steadily increased over the years as broadcast and cable TV networks raised their carriage fees paid by pay-TV operators.
The “elephant in the room” was that most pay-TV subscribers watched only a handful of TV networks, and yet paid for ALL of them. By far the biggest beneficiaries of pay-TV’s artificial economics were sports networks, with ESPN at the very top of the list. I first wrote about the “sports tax” 12 years ago in “Not a Sports Fan? Then You're Getting Sacked For At Least $2 Billion Per Year.” Things have only gotten worse for non-sports fans since. However, with streaming’s rise, the elephant is now fully visible, and has driven cord-cutting to record levels.
And just as the Internet has ruthlessly rationalized the economics of practically every other industry, it is now doing the same to the TV industry. The Internet allows zero room for artificial economics and anyone who violates this precept is an ostrich with their heads fully underground. Iger understands this, and his quote should fairly be seen as a signal to Wall Street that Disney is extremely unlikely to ever achieve historical financial performance in its TV businesses.
As if all of that weren’t enough, Iger then went on CNBC’s “Squawk Box” yesterday and told David Faber that “Everything is on the table…" with respect to Hulu’s eventual ownership resolution (reminder, Disney has a deal in which Comcast can force Disney to buy its 30% stake for a set minimum price that would translate into around $9 billion).
Iger’s comments basically turned Hulu into a hot potato. Really dedicated VideoNuze readers will recall that almost 5 years ago, in March, 2018 I wrote “Why Comcast Should Take Control of Hulu.” Then, subsequent to Comcast’s Peacock reveal in January, 2020, I followed up with “Quick Math Shows Comcast Missed Out On Almost $6 Billion in Revenue By Not Buying the Rest of Hulu.”
Instead, Comcast/NBCU launched Peacock and will have lost over $5.5 billion on it just between 2022-2023. If Comcast does come back in and buy Disney’s 70% stake in Hulu it will rank as the #1 irony in all the years I’ve been in the industry.
And it would make Disney’s DTC future even murkier still.
Listen to the podcast to learn more (34 minutes, 46 seconds)
Friday, February 3, 2023, 9:32 AM ET|
On this week’s podcast, Colin Dixon and I boldly introduce to the industry a new acronym (technically it’s a “macronym” or “nested acronym”).
We’re all aware that free ad-supported TV (“FAST) services are currently all the rage and that many are predicting it will become a multibillion dollar streaming segment in the years ahead.
Content providers, TV OEMs and TV networks are seizing the opportunity by launching new FAST services to capitalize on two key trends - advertisers’ insatiable demand for premium CTV ad inventory and viewers’ SVOD fatigue especially as economic uncertainty surges.
All of this makes FASTs a “road to gold” in the short-term.
But, in the longer-term, an unintended consequence of FASTs’ growth may be to precipitate accelerated churn among SVOD providers. Hence the new macronym: SVOD Losses On the Way (“SLOW”).
There are still only 24 hours in the day, and viewers constantly make choices about what to watch, what services get displaced and what they’re willing to pay for. If viewers reapportion their viewing time to strong FAST services that are flooding the market, then they’re being “trained” to consume free premium video via FASTs. Further, their expectations for ever-better shows to be accessible without payment also escalates.
SLOW is a concept I’ve been contemplating for some time, especially as I read one FAST-boosting report or article after another, as well as observing the slowing growth SVODs are already experiencing.
But this week’s announcements of WBD moving “Westworld” plus a trove of other programming to Tubi and to The Roku Channel FAST services really crystallized things for me. After all, “Westworld” is a show that garnered 54 Emmy nominations and 9 wins in its four-year run. Its popularity has faded recently and HBO cancelled it, but it still boasted a familiar, name-brand cast. For HBO, it was no “Game of Thrones” or “The Sopranos,” but it was respectable. Now all 36 episodes will be available completely for free on Tubi and The Roku Channel.
To be clear - and as I say in the podcast - I remain a fan of FASTs. I’m only raising the caution flag that the decision-making around which FASTs to launch and what premium content will be included must be made with a lot of strategic awareness. Companies condition their customers what to expect; once this conditioning is set it is incredibly difficult to recondition them.
Note: There will be a dedicated session on whether FASTs are a road to gold or a road to “SLOW” at VideoNuze’s CTV Advertising PREVIEW virtual event on Feb. 28th afternoon. Sign-up is complimentary. Initial speakers being announced next week.
Listen to the podcast to learn more (38 minutes, 2 seconds)
Friday, January 13, 2023, 10:03 AM ET|
In this week’s podcast, Colin and I discuss Warner Bros. Discovery’s plan to launch a new streaming bundle in France dubbed “Warner Pass,” exclusively on Amazon Prime Channels, which Variety reported. Warner Pass will include all HBO content, plus 12 WBD channels including CNN, Discovery Channel, Eurosport and others.
The move caught our attention because WBD has been quite vocal about its intention to launch a combined HBO Max / discovery+ service (expected to be simply called “Max”), which the Variety report noted it still plans to introduce in France in 2024.
Colin and I think Warner Pass could offer clues about how WBD will price the combined service eventually (especially in Europe). Yet it raises a concern that having two different streaming brands in France with similar content is clumsy and could cause consumer confusion (not to mention spending required to support two streaming brands).
Further, as we discussed in December, Warner Pass is yet another step in reversing the company’s strategy on third-party distribution. Prior WarnerMedia management decided to pull HBO from Amazon Prime Channels and others in September, 2021. As I wrote back then, in a direct-to-consumer world, not owning the subscriber, nor seeing their detailed viewing data, are real drawbacks.
Listen to the podcast to learn more (31 minutes, 56 seconds)
Inside the Stream Podcast: World Cup 4K, Netflix Ad Refunds, HBO Max Removes “Westworld”, Music FASTsFriday, December 16, 2022, 9:52 AM ET|
On this week’s edition of Inside the Stream, nScreenMedia’s Colin Dixon and I dig into four topics: World Cup streaming quality and the lack of 4K differentiation, Netflix’s offer to refund advertisers due to inventory shortfalls, WBD’s decision to remove “Westworld” from HBO Max, and the proliferation of music-oriented FAST channels.
Listen to the podcast to learn more (31 minutes, 25 seconds)
Friday, December 9, 2022, 10:51 AM ET|
HBO Max is coming back to Amazon Prime Video Channels, reversing a move by prior owner WarnerMedia just over a year ago. Removing HBO Max led to an immediate loss of 5 million subscribers who had signed up through Amazon Channels (it’s unclear how many rejoined directly).
On today’s podcast, Colin and I try puzzle through why WBD, which is now HBO’s owner, would want HBO Max to rejoin Amazon Channels. Although Amazon will surely generate some incremental HBO Max subscribers, their lifetime value is likely to be far lower than HBO Max subscribers who sign up directly with the service. That’s because Amazon has “customer ownership” of these subscribers and shares little to no data with SVOD providers that would be critical to retention (starting with an email address to directly communicate with them). I wrote about my personal experience with this in August, 2021.
The move seems to suggest a push for incremental subscribers, despite the likelihood of a higher churn rate. That’s at odds with streaming services executives recent emphasis on profitability over pure subscriber growth. It’s possible Colin and I are missing something here. If you think you know what it is please let us know.
To wrap up the discussion we also discuss WBD's reported new strategy to collect its streaming services under the "Max" brand in 2023.
Listen to the podcast to learn more (34 minutes, 4 seconds)