A new survey from Hub Entertainment Research found that 63% of respondents identified “online” as the main source of their favorite TV show, vs. 35% who said it is their pay-TV set-top box. The 28 point gap is a big jump from the 2018 survey which found a 56%-44% divide in favor of online.
No surprise, within online, Netflix is by far the number one source of respondents’ favorite shows. Netflix was identified by 34% of respondents, followed by 10% for Amazon Prime Video, 8% for Hulu and 4% for “other online.”
Hub didn’t provide an age breakout for any of the above data, but a separate study released today by Common Sense Media found that for 8-12 year olds, YouTube is by far the most used video service (53%), with Netflix next (27%) and YouTube Kids (7%), Amazon Prime Video (3%) and Hulu (2%) following. An interesting article in today’s WSJ helps explain the appeal of YouTube to teens.
Topics: Hub Research
Verizon and Disney announced a promotional deal this morning which will give a free year of Disney+ to Verizon’s new and existing 4G LTE and 5G unlimited wireless subscribers and new Fios and 5G Home Internet subscribers. Some back of the envelope calculations show the promotion could quickly yield millions of new Disney Plus subscribers.
At the end of Q2 ’19, Verizon reported a total of around 94 million wireless retail connections. Verizon has been promoting new unlimited plans, and CFO Matt Ellis said on the Q2 ’19 earnings call that “less than 50% of our customer account base are on unlimited plans.” If say 35% are on unlimited, then around 33 million wireless subscribers would be currently eligible for the Disney+ free offer. If even 10% took advantage, that’s around 3 million new Disney+ subscribers.
I’m pleased to present the 487th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Netflix reported its Q3 ’19 results this week, the last quarter before the onslaught of new SVOD competition begins from Disney+, Apple TV+, HBO Max and Peacock, among others.
In this week’s podcast Colin and I discuss the Q3 results, which were strong internationally and decent in the U.S. (better than Q2 ’19, but still well down from Q2 ’18 and below Netflix’s own forecast). But we focus mainly on where things go from here.
We agree that the days of Netflix’s robust U.S. growth are almost certainly over. But we also think Netflix’s content remains highly competitive and international could continue expanding strongly in the short-term, depending on how quickly Disney+ rolls out to other geographies. In short, there is a lot of uncertainty given all the new choices coming to market.
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Click here to listen to the podcast (24 minutes, 39 seconds)
Netflix investors breathed a sigh of relief after yesterday’s Q3 '19 earnings report. The company missed its subscriber forecast of 7 million subscriber addition, but only narrowly by a few hundred thousand. Netflix added 500K subscribers in the U.S. vs. its 800K forecast. That was a far better performance than Q2 when it lost 130K subscribers in the U.S. Internationally Netflix gained 6.3 million subscribers, basically in line with the 6.2 million it forecast.
The U.S. miss was blamed mainly on an elevated churn rate that Netflix said hasn’t normalized since rate increases went into effect earlier this year. The good news is the higher rates translated into 16.5% increase in average revenue per unit in Q3.
I’m pleased to present the 486th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Colin and I were both excited to see Hulu launch a mobile video downloading feature this week. Hulu had teased the feature over a year ago. As Colin notes though, because it’s only available with the Hulu (No Ads) service and only on iOS devices, just around 15% of Hulu’s overall subscribers will gain access to downloading (at least for now).
We then discuss reports that Disney doesn’t yet have an agreement with Amazon for its forthcoming Disney+ service to be included in Fire TV devices. The deal is held up due to Amazon’s attempt to wrangle more ad inventory in Disney’s other apps. The situation is typical of the complex and sometimes competitive relationships between big media and technology companies today.
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Last week, the WSJ ran two articles that underscore how Disney is navigating new terrain as it prepares to launch Disney+ in November. The articles also showcase how convoluted relationships among major media and technology companies are going to become over fights for shifting leverage.
One article described how Disney has continued to ban advertising from Netflix on its entertainment TV networks (ESPN is still ok) even though it will accept ads from other SVOD providers. The other article described Disney’s negotiations with Amazon over how much ad inventory Amazon should be allocated to sell in Disney’s apps that run on Fire TV. The article noted no deal at all has been reached for Disney+ to be carried on Fire TV, as the SVOD service’s launch date nears.
NBCUniversal’s SVOD service will be known as “Peacock” and will launch in April with over 15,000 hours of content. As expected, classic shows like “The Office” and “Parks and Recreation” will be exclusively on Peacock, along with “30 Rock,” “Cheers,” “Frasier,” “Will and Grace” and numerous others.
Peacock will be available both ad-supported and ad-free, though NBCUniversal didn’t announce any pricing just yet (Peacock will be included at no charge for Xfinity subscribers). SVOD pricing has been under pressure since Disney announced initial Disney+ pricing at $6.99/month, with Apple TV+ following at $4.99/month. HBOMax is likely to be at the high end around $14.99/month.
Apple finally revealed details of its Apple TV+ SVOD service and by all accounts it looks poised to get off to a fast start when it launches on November 1st. Positives include 9 original shows from A-list talent, low pricing of $4.99 per month, 1 week trial period, ad-free viewing, binge-watching (albeit limited to 3 episodes per show to start), account sharing for 6 family members and downloading.
But the biggest tailwind Apple TV+ will enjoy is that it will be bundled for a free year for buyers of new or Apple-refurbished iPhones, iPads, iPod touches, Apple TVs and Macs who activate Apple TV+ within 3 months of their purchase. That means millions of viewers will become exposed to Apple TV+ at no cost, especially during the all-important holiday season. There is virtually no upfront friction since the Apple TV app is pre-installed on all these devices, including Macs running the latest macOS.
Topics: Apple TV
I’m pleased to present the 475th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Was Netflix’s Q2 ’19 subscriber slowdown a short-term blip or the start of a long-term trend? This is the question Colin and I dig into on this week’s podcast.
This week Netflix reported its first-ever domestic streaming subscriber loss, dropping 130K paid subscribers to end the quarter with 60.1 million paid subscribers. The loss compared with a forecasted gain of 300K and a gain of 870K a year ago in Q2 ’18. And internationally, Netflix gained 2.83 million paid subscribers to end the quarter with 91.5 million subscribers, compared with a forecasted gain of 4.7 million and a gain of 4.6 million a year ago in Q2 ’18. So all in, Netflix’s global subscriber gain dropped roughly in half, from 5.45 million in Q2 ’18 to 2.7 million in Q2 ’19.
Netflix blamed a weak Q2 content slate and to a lesser extent price increases in the U.S. and expects Q3 to return to typical growth. But Colin and I note new SVOD dynamics ahead that could scramble things such as the loss of key content like “Friends” and “The Office,” strong entrants like Disney+ and HBO Max. It’s hard to tell how it all shakes out just yet.
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It’s been just 6 1/2 years since Netflix debuted its breakout original series “House of Cards” and new research from MoffettNathanson and HarrisX show just how much progress the company has made since: 15 out of the top 19 most popular TV shows are now original, with the remaining 4 acquired (the research credits “movies” as the 3rd most popular).
The most popular show is “Orange is the New Black” followed by “Stranger Things.” #4 is "Ozak" and #5 "Grace and Frankie." Of the acquired shows, “The Office” (which is moving to NBCU’s streaming service) is #9, while “Friends” (which is moving to WarnerMedia’s streaming service) is #10. “Supernatural” (#12) and “Breaking Bad” (#20) are the only other acquired shows in the top 20. Somewhat surprisingly, originals accounted for 13 of the top 19 shows on Amazon Prime Video (movies were #6). For Hulu, just 5 of its top 19 were original, with the majority of acquired shows coming from Disney/Fox (movies were #10).
Frustrated Chromecast and Fire TV users can now breathe a sigh of relief: parent companies Google and Amazon have announced that apps for YouTube and Prime Video are officially available the other company’s CTV devices. That means Prime Video can be cast once again using Chromecast and is on Android TV devices. And YouTube’s app is available on Fire TV Stick (2nd gen), Fire TV Stick 4K, Fire TV Cube, Fire TV Stick Basic Edition, and Fire TV smart TVs (e.g. Toshiba, Insignia, Element, Westinghouse).
I’m pleased to present the 470th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
This week we start with Colin sharing his views on CuriosityStream’s market opportunity. Colin had several takeaways after listening to a podcast with company founder John Hendricks describing the addressable universe streaming is creating and how CuriosityStream is capitalizing. We also discuss challenges CuriosityStream and other DTC streaming services face.
Speaking of challenges, we then shift to focus on YouTube’s latest policies meant to combat hate and conspiracy speech, plus predatory behavior towards kids on its platform. Colin and I agree YouTube is engaged in an ongoing game of whack-a-mole trying to control what content runs on its platform, while also trying to respect freedom of speech. It’s an extremely hard balance to achieve. Now regulators around the world are stepping up their pressure to address the situation.
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Click here to listen to the podcast (25 minutes, 28 seconds)
I’m pleased to present the 468th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
How many streaming video services will viewers ultimately use? This is a pressing long-term question for all video services, whether subscription, ad-supported or a hybrid - especially those that are late entrants like Disney+, Apple TV+, WarnerMedia and others.
This week Colin and I explore this question, focusing on variables such as viewers’ willingness to pay, the explosion in original programming choices and the recent growth of free ad-supported services. New data from Hub Research this week indicates many viewers already feel overloaded with choices and unwilling to pay for new services without dropping existing ones.
What all this means for the economics of SVOD and ad-supported services is a huge unknown.
(Reminder the 9th annual VideoNuze Video Advertising Summit is next Wednesday, May 29th in NYC. Register now!)
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Click here to listen to the podcast (22 minutes, 8 seconds)
Comcast and Disney have announced a deal under which Comcast can effectively transition out of its 33% ownership stake in Hulu beginning in January 2024. The exit can occur at either Disney’s or Comcast’s instigation and at an assessed market value of Hulu that won’t be less than $27.5 billion. That means Comcast’s 33% stake could be worth approximately $9.1 billion though that could be reduced to a minimum of $5.8 billion if Comcast doesn’t fund any of Hulu’s capital needs between now and January 2024.
I’m pleased to present the 465th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Hulu is in the video industry’s sweet spot. A hybrid ad-supported brand-safe streaming service, now with 28 million subscribers. The best opportunity TV advertisers have to recapture young TV-watching audiences who are the biggest cord-cutters. Disney as its primary owner which itself is all in on streaming, willing to support Hulu’s land grab investments in original programming and marketing. And perhaps the biggest growth driver yet to come: bundling with Disney+ starting later this year.
On this week’s podcast Colin and I talk about all of the above (and a few challenges Hulu still faces).
If you want to learn more about Hulu’s success, come to the 9th annual Video Advertising Summit for my keynote interview with Hulu’s SVP and Head of Ad Sales Peter Naylor!
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Click here to listen to the podcast (24 minutes, 15 seconds)
Hulu announced this morning that it has topped 28 million subscribers, with 26.8 million paid and 1.3 million promotional (Hulu operates both ad-supported/ad-free SVOD services and Hulu Live TV but didn’t provide a breakdown). Hulu added 7.5 million paid subscribers in 2018. Viewership also intensified with average time spent per subscriber up over 20% in 2018 and total hours watched per subscriber up 75%. Importantly, 80% of Hulu’s viewing occurs in the living room.
While Netflix has become the market leader in ad-free OTT viewing, Hulu has become the clear market leader in hybrid ad-supported premium OTT viewing. This is an extremely valuable place to be as cord-cutting accelerates and advertisers seek out viewer-friendly and targetable environments for their TV ad budgets. Hulu made a very smart move earlier this year, actually cutting the price of their ad-supported SVOD service by $2, to $6 per month, which no doubt is continuing to add to subscriber growth. A deal with Spotify announced in March to give Spotify Premium subscribers access to Hulu's ad-supported service is also likely having an early impact.
I’m pleased to present the 463rd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
The SVOD industry’s dynamics are harder than ever to predict now that Disney+ plans to come to market with a robust content offering priced at just $7 per month. So for example while Netflix reported a strong Q1 ’19, when Colin looks ahead to how Q4 ’19 or Q1 ’20 will shape up for Netflix given omnipresent promotion of Disney+ that’s coming, he sees an adverse impact on domestic subscriber additions.
We discuss how significant the impact could be not just on Netflix but also on Apple TV+ which will come to market in late ’19 too, but have a much less competitive content offering vs. Disney+. A key question is how low must Apple TV+’s price now be to compete?
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Click here to listen to the podcast (22 minutes, 48 seconds)
The biggest piece of news from last week’s Disney+ mega event was certainly the reveal of the service’s rate: just $7/month, or $70/year, and its implications for competitors, most notably Apple TV+.
Back in September, 2017, just after Disney CEO Bob Iger announced Disney was shifting its strategy toward a direct to consumer (DTC) model, and gave a preview of the massive trove of Disney/other content that would be included, I wrote that success for the service would be highly dependent on its price.
Would Disney+ be priced on the lower end of market expectations (I speculated about $10/month) to achieve strong adoption like Netflix has? Or would it be priced on the higher end (say $20-$25/month) in a market “skimming” approach like what HBO Now has followed? Given the money Disney would be foregoing in third-party distribution fees by going DTC, there was huge conflicting pressures on the pricing decision.
I’m pleased to present the 458th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Earlier this week, DirecTV Now changed its packaging and pricing by introducing 2 new tiers, DirecTV Now Plus and DirecTV Now Max. They are both anchored by HBO, but also lose popular networks from Viacom, Discovery and AMC.
On today’s podcast Colin and I discuss the likely rationale behind the changes and what impact they’ll have. One thing seems clear: given the spectrum of TV networks they carry, Hulu Live TV and YouTube TV are poised to become leaders in the virtual pay-TV industry.
Next, Colin updates us on several statements a Netflix executive made earlier this week that he believes need further clarity. Colin delights in “keeping them honest” and his watchdog role benefits all of us trying to understand industry data.
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Click here to listen to the podcast (24 minutes, 30 seconds)
Large corporations’ priorities are testing creative freedom as more shows than ever compete for attention in the “Peak TV” era and video becomes a critical C-level focus. Exhibit A is Apple, which according to a report yesterday from the NY Post, is vexing creators with an abundance of suggestions (or “notes” in industry parlance) on their shows. The notes, which apparently include some from CEO Tim Cook himself, tend to emphasize Apple’s desire to keep shows “family friendly.”
The goal makes perfect sense; nothing is more important to Apple than its brand image. The prospect of seeing an “Apple Original” icon in the opening credits, followed by an opening scene including profanity, violence or nudity, would be a jarring juxtaposition. Yet this is the “Peak TV” world we now live in; with so many shows competing for viewers’ time, those that are most original and creative, and yes, often include attention-grabbing early scenes, stand out (for a point of reference recall that in the first minutes of Netflix’s “House of Cards” pilot, Kevin Spacey’s character puts a wounded dog out of its misery with his own hands).