Posts for 'SVOD'

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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U.S. broadband households with multiple SVOD subscriptions soared in Q3 ’20 according to new research from Parks Associates. In its new “The Next Big 3 in OTT” report, Parks found that 61% of U.S. broadband households have two or more SVOD services, compared to 48% a year ago. In Q3 ’20, 45% of these households had three or more SVOD services, up from 27% a year earlier. And 31% subscribed to four or more SVOD services in Q3 ’20, over double the 14% rate a year ago. (Which of these describes your household? Send me a note and let me know).

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I’m pleased to present the 538th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.  

Disney reported its fiscal year and Q4 results yesterday, with the highlight being that Disney+ had 73.7 million subscribers at the end of the quarter. Coincidentally, yesterday was exactly one year since Disney+ launch. Disney had initially forecast Disney+ would reach 60-90 million subscribers by 2024, so it is already at the midpoint.

Colin and I dig into the Disney+ numbers, along with its average revenue per paid subscriber, which is still relatively low by SVOD standards. We also discuss results at Hulu and ESPN+, both of which also had a strong Q4 and a strong fiscal year 2020. Overall Disney seems to have successfully pivoted to the direct-to-consumer model and is now investing heavily behind it. More details will be revealed at its investor day on December 10th.

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Bloomberg reported Friday that Disney has curtailed Hulu’s international expansion because Disney does not want to significantly increase Hulu’s valuation which would trigger a higher eventual payout to minority owner Comcast. Hulu’s valuation in early 2024 will set the payout Disney owes Comcast for its one-third share in Hulu under a deal struck in May, 2019. Comcast’s Hulu stake is worth at least $5.8 billion under the deal.

Bloomberg said that Hulu’s late 2019 proposal to Disney to expand internationally was initially supported, but then in August 2020 Disney switched gears and decided to embrace Star as the international brand for its non-U.S. entertainment service. Disney acquired Star, the India media company, as part of its $71 billion Fox deal. Bloomberg also cited Disney’s concerns about extending Hulu’s losses, Covid’s negative impact on Disney’s various businesses, and its commitment of resources to Disney+’s international expansion as other reasons it decided not to support Hulu’s international expansion.

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I’m pleased to present the 533rd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.  

Are AVOD and SVOD services in competition with each other for time and attention, or is there more of a continuum between them? For now at least, with viewership of both exploding, it seems like more of a continuum according to data Colin shares this week.

However, AVOD/SVOD viewership is coming at the expense of linear TV/pay-TV. This was substantiated again this week by Roku and The Harris Poll’s Consumer Holiday Shopping Report, which found a 19% YOY increase in streaming and a 13% YOY decline in pay-TV viewing. We discuss the details.

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I’m pleased to present the 526th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. We hope all our listeners are staying well.

Disney reported its Q3 ’20 results this week, swinging to a $5 billion loss as the pandemic hit multiple parts of the company. The sole bright spot was direct-to-consumer streaming where Disney now has over 100 million subscribers between Disney+, Hulu and ESPN+. Disney emphasized how critical DTC is to its future and plans to launch Star as an international SVOD brand while Hulu will remain a domestic brand.

On today’s podcast Colin and I discuss the remarkable pivot Disney has made toward DTC in just the past couple of years, and what’s ahead. We’re enthusiastic about the premium opportunities Disney has, starting with the “Mulan” PVOD option coming soon, as Disney+ begins to look more like a membership with various exclusive offers.

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I’m pleased to present the 523rd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. As always we wish our listeners all the best and hope everyone is staying well.

Peacock launched nationally this week and Colin and I are both impressed. The user experience and value proposition to advertisers are both strong. As more library and original content is added, it’s only going to get better. However, Peacock’s distribution is currently limited without deals with Amazon Fire TV and Roku, which is why Comcast’s own Flex device is critical. Peacock is also entering a highly competitive SVOD/AVOD market; it is poised to play a lot of different roles for NBCU and Comcast.

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I’m pleased to present the 518th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. We hope all of our listeners are staying safe and healthy.

This week Colin and I dig into a range of different data and forecasts about changing SVOD viewership patterns as the pandemic continues. These include data about co-viewing from Nielsen and average viewing minutes for major SVOD services from 7Park.

We also highlight new survey data from Magid how sports fans may shift from SVOD when sports returns. Finally we touch on a new forecast from MoffettNathanson that U.S. pay-TV subscribers will drop by 22 million by 2024, with SVOD benefiting.

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I’m pleased to present the 516th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. As always, we hope our listeners are staying well.

After much anticipation HBO Max has launched and we share our initial observations on the app and content. Colin is especially impressed with the recommendation feature, which reportedly mixes algorithms and human curation. Even with its massive content library, HBO Max at $15 per month is at the high end of the market which should slightly limit its appeal.

A far bigger limiter is that neither Roku nor Amazon Fire TV are supporting HBO Max. Colin and I dig into what’s behind the conflict. Colin believes all the companies are seeking control over the user experience and the accompanying revenue and usage insights. In particular Amazon has around 5 million HBO Now subscribers through its Channels program that it is reluctant to see transition to HBO Max directly.

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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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New research from Hub Entertainment Research has found that the average number of TV services used per viewer reached 4.8 in April 2020, vs 3 in 2018, a rise of over 50%. Hub includes all TV services in the mix - pay-TV, SVOD and AVOD. Hub found that more viewers are using SVOD services, and those that are use multiple services. 74% used either Netflix, Amazon or Hulu in April, 2020 vs. 70% a year earlier. And 46% of viewers used two or more of these services in April, 2020 compared with 43% a year earlier.

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I’m pleased to present the 511th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. We wish all of our listeners good health and hope everyone is staying safe.

Earlier this week, Netflix reported an unexpectedly large gain in global subscribers for Q1 ’20, which management attributed to the shelter-at-home situation. On today’s podcast Colin and I discuss how Netflix has uniquely benefited from shifting viewership and also how it will continue to do so in Q2 and likely during the second half of the year.

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Netflix demonstrated what a huge beneficiary of shelter-in-place the company has become, reporting 15.8 million net subscriber additions globally for Q1 ’20. The number was over twice as large as the 7 million that Netflix had forecast for its Q1 gain back in January. Netflix was well ahead of forecast in all 4 of its geographic regions and now has 183 million global subscribers, cementing its position as the largest SVOD service by far.

The region that is most intriguing to me is the U.S. plus Canada region (“UCAN”), where, back in January, I thought there was a 50-50 chance Netflix could actually lose subscribers in Q1, for the first time. That was based on Netflix’s global forecast and looking at recent growth trends in the other 3 regions. Instead, Netflix added 2.31 million subscribers in Q1 ’20, up from 1.88 million in Q1 ’19.

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The world has completely changed due to the virus. There are countless examples of this across every industry. In streaming video, one clear example is that Netflix will likely swing from a 50-50 chance of losing subscribers in its UCAN (U.S. plus Canada) segment in Q1 ’20 to gaining subscribers in the period when it reports next Tuesday. One data source that's leading me to change my view is Antenna, a business intelligence startup that has been tracking underlying purchase data on SVOD providers, yielding insights on their subscriber additions and churn rates.

Just to step back for a moment, following Netflix’s Q4 ’19 earnings release that included its Q1 ’20 forecast, some basic calculations I did suggested that Netflix itself was preparing for a loss in UCAN subscribers in Q1 ’20. The company was forecasting global net subscriber additions of 7 million in Q1 ’20, down from 9.6 million in Q1 ’19. In addition to a trending slowdown in 2019, Netflix seemed to also be expecting an adverse impact from the Disney+ launch in Nov. ‘ 19.

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I’m pleased to present the 509th edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia. We wish all our listeners well and hope that everyone is staying healthy.

First up this week, we discuss the success of Disney+ which now has 50 million paid subscribers, less than 5 months since launch. Both Colin and are impressed with the growth, which has been remarkably steady on an average daily basis. Disney+ is clearly way ahead of its forecast of 60-90 million subscribers in September, 2024. Colin thinks there may have been an “under-promise, over-deliver” approach in forecasting. Regardless, Disney+ looks like it’s in a strong position.

We then turn our attention to Quibi, which launched earlier this week. We both like the app and think it’s quite functional. We also recognize that we’re not in the target audience, so the content isn’t necessarily for us. The big issues are that Quibi needs to be on connected TVs to give viewers more flexibility, and also a tier of free content (past the 90-day trial), to serve as an on-ramp for subscriber acquisition. Quibi is competing against an abundance of free alternatives; while it will get many trial sign-ups, conversion to paid will be the key challenge.

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Disney announced that Disney+ now has 50 million paid subscribers, a little less than 5 months since it launched, on November 13. Disney last reported it had 28.6 million subscribers on February 3rd. So since that date, Disney+ has added another 21.4 million. Beyond the staggering growth - from zero to 50 million subscribers in less than 5 months - what’s also remarkable is that the average daily subscriber growth for Disney+ is highly consistent across the two reporting periods (November 13 to February 3 and February 4 - April 7)

In the first reporting period, which included approximately 84 days, an average of 340,476 subscribers were added per day. In the second reporting period, which included approximately 64 days, an average of 334,375 subscribers were added per day. That’s just a 1.8% average daily decline from period one to period two.

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VideoNuze readers will recall that several months ago I made a prediction that Netflix would launch a lower cost (around $5-$7 per month) ad-supported tier in 2020. I predicted this despite Netflix management having steadfastly resisted the model, because I believed the logic was just so compelling and straightforward that no “religious” argument to the contrary would preclude it.

However, a month after posting, on Netflix’s Q4 ’19 earnings call, management once again rejected the idea. In my and other analysts’ view, Netflix offered what seemed to amount to a “we can’t chew gum and walk at the same time” argument that focused on its perceived inability to compete effectively with the ad triopoly of Google, Facebook and Amazon. Despite CTV ad dollars being scooped up by the likes of Hulu, CBS All Access and other premium video providers, Netflix somehow concluded it simply couldn’t play.

With the coronavirus upending life and prompting a surge in stay-at-home viewing, I’d like to suggest 6 reasons why now would be the absolute perfect time for Netflix to announce a lower priced ($5-$7 per month) ad-supported tier (note to readers: feel free to let me know if I’m missing something colossally obvious that would negate my assertion).

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A new app called Watchworthy is the antidote for viewers who are overloaded by the bewildering array of program choices in the Peak TV era. Watchworthy, introduced by Ranker, the fan-rankings company, asks for a minimal 30-60 second investment of the user’s time upfront so it can start making program recommendations. Viewers are quickly shown a sequence of images for existing programs. Then like a dating app they swipe left/right (or thumbs up/thumbs down) to indicate their preference if they’re familiar with them.

Those preferences and the programs’ attributes are analyzed against data gleaned from a billion preference votes that have been cast on Ranker over the years to generate the recommendations. Clark Benson, CEO of Ranker, told me in a briefing that there are currently 100-120 programs that viewers can cast preferences on in the upfront process, which can then be translated into recommendations from a pool of 7,000-12,000 different shows.

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With people spending more time at home due to the virus, there has been a ton of speculation around what impact this will have on streaming consumption. For example, based on prior disruptive incidents, Nielsen estimates viewing could increase 61%. WURL released data that it saw 7%-44% regional increases on its platform last weekend. A message I received yesterday from SpotX said its experienced a 16% increase in video ad inventory across their entire global marketplace. So the data suggests increases, the range of them is pretty wide.

A sub-question within the “streaming is surging” speculation is how it affects AVOD vs. SVOD services. Even before the virus the dynamics in both categories were fluid. AVOD services are benefiting from multiple tailwinds: cord-cutting, CTV-based viewing, targeting, content proliferation, etc. SVOD services were proliferating, with new competitors like Disney+, Apple TV+, Peacock and soon HBO Max (Quibi could be included too, although its mobile-only). From my perspective, the new competition made incumbents like Netflix look vulnerable. I calculated there was a decent chance Netflix would actually lose subscribers in its US/Canada region in Q1, which would be unprecedented.

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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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