Posts for 'Disney'

I’m pleased to present the 383rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

On today’s podcast, Colin and I discuss how Disney’s blundered 2012 content deal with Netflix has now come home to roost. Even though Disney’s content was only activated on Netflix last year, this week Disney announced it won’t renew the Netflix deal and will instead launch its own entertainment-focused SVOD service - but not until it’s able to in 2019.

Colin and I agree that 2019 is a lifetime away given how fast the video world is moving. Importantly, the competitive environment for kids programming is already very crowded and will only intensify over the next 2 years as others’ investments accelerate. While Disney’s content is the gold standard, for many reasons we discuss, the company success in SVOD is far from assured.

Disney painting itself into a corner is a textbook example of the consequences of prioritizing short-term gains over long-term strategic flexibility. Though the original Netflix deal was done in 2012, its ramifications will reverberate for years to come.

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By now we’re all familiar with the 3 big announcements Disney made yesterday: 1) a plan to launch its own entertainment-focused SVOD service, in turn sunsetting in 2019 its Netflix licensing deal for Disney/Pixar content, 2) a plan to launch an ESPN OTT service and 3) spending $1.58 billion to buy another 42% of BAMTech and take control of that business.

Focusing on Disney’s entertainment SVOD service it looks pretty clear now that by signing the original December, 2012 licensing deal with Netflix, Disney blew a big strategic opportunity to get in front of the trend toward direct-to-consumer online distribution.

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Although more video is being produced than ever, for advertisers, premium video remains the most sought-after. At last week’s 7th annual VideoNuze Online Video Ad Summit, our opening panel “Exploring Premium Video’s Winning Formula,” dug into why premium video is so valuable and how it can maintain its desirability.

The session included Maureen Bosetti (Chief Partnerships Officer, Initiative), Pooja Midha (SVP, Digital Ad Sales & Operations, Disney ABC Television Group) and Scott Rosenberg (SVP/GM, Advertising, Roku), with James Rooke (GM, Publisher Platform, FreeWheel) moderating.

(Note, I’ll be posting all of the VideoNuze Ad Summit videos over the next couple of weeks)

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Hulu announced yesterday that it has struck deals with 21st Century Fox and Disney for access to over 35 different TV networks for Hulu’s skinny bundle, slated to launch in early 2017. The agreements are no surprise given Fox and Disney are Hulu’s two primary investors, along with Comcast (which has a back seat role per restrictions related to its NBCU acquisition) and Time Warner, which recently took a 10% stake in Hulu.

But the devil is in the details, because when it comes to Hulu’s ability to include live broadcast feeds in its skinny bundle, the Fox and Disney deals only get it a small part of the way. Fox owns 17 stations around the country and Disney owns just 8. Since there are 210 DMAs in the U.S. that means Hulu needs to strike agreements with lots of different local station owners to enable a standardized nationwide skinny bundle offer including local broadcast feeds.

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I'm pleased to present the 335th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week, Colin and I dig into Disney’s new $1 billion investment in BAMTech, the technology spin-off of Major League Baseball Advanced Media. We both like the move as it further positions Disney to capitalize on online delivery, while protecting itself from ongoing changes in viewers’ behavior. In this case, Disney’s sheer size gives it the resources to keep its options open.

Next up, Colin and I were both surprised by Hulu’s move earlier this week to jettison its free, ad-supported viewing service to a new partnership with Yahoo. Colin wrote a great piece earlier this week listing the 5 most important reasons why he thinks this was a mistake, which we discuss. Hulu continues evolving away from its roots, as it prepares to launch its skinny bundle next year, which brings its own set of challenges.

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Say this for Disney - in just the past couple of years or so it has moved to cover virtually every bet for how online video might impact the company in the future.

With its Maker Studios acquisition, Disney expanded into YouTube-style content creation for kids and millennials. With DisneyLife, it’s moving into SVOD entertainment beyond its pivotal output deal with Netflix. Now with Hulu, it’s addressing cord-cutting and the potential of skinny bundles (as well as with deals with DirecTV Now, Sling TV and PlayStation Vue).  And finally, with its new $1 billion BAMTech investment, it’s adding platform capabilities for direct-to-consumer live sports streaming. Plus, with the forthcoming ESPN OTT service, it will test its own direct-to-consumer sports offering.

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I'm pleased to present the 334th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

In this week’s podcast, Colin and continue the debate we began back in early May (see here) about whether Hulu’s “skinny bundle” makes sense. We took up the debate again because earlier this week Time Warner announced that it was acquiring a 10% interest in Hulu and that its ad-supported cable networks would be included in the skinny bundle.

As I wrote on Wednesday, the deal seems to muddy Hulu’s skinny bundle proposition further. With all of the TW networks included, Hulu’s cost of programming also rises, in turn driving up the skinny bundle’s retail price. If the bundle ends up starting at $40, $50 or $60 per month, it won’t be able to create meaningful cost savings vs. pay-TV. Even with TW’s networks, there’s still the “Swiss cheese” risk inherent to all skinny bundles - not offering enough breadth to satisfy a family. If all that isn’t enough, Hulu will be competing with its best customers, a very risky approach.

Colin disagrees and thinks this is a big opportunity for networks to take more control of their destiny. Colin argues that given all the uncertainty of the video market, being able to experiment and get actionable insights from viewer data is valuable. In short, he only sees upside opportunity.

It’s a great debate and we’re both very eager to see how the Hulu skinny bundle will actually look when it’s introduced.

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With so much uncertainty in the TV and online video industries these days, I keep telling myself to never be surprised by anything anymore. But last night, when the WSJ headline, “Hulu is Developing a Cable-Style Online TV Service” popped up in my Twitter feed, I have to admit it tested the boundaries of my imagination.

The most immediate head-scratcher was that such a move would position Disney and Fox, two of the three network shareholders in Hulu (along with Comcast, which is now a silent partner due to terms of its NBCU acquisition) as direct competitors of pay-TV operators, their biggest distributors. These companies spend billions of dollars per year to carry the very same TV networks that would now be included in the skinny Hulu lineup.

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I'm pleased to present the 300th edition (wow!) of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week we discuss Disney’s newly launched “DisneyLife” SVOD service in the U.K. In his post on the launch, Colin noted that Disney CEO Bob Iger said DisneyLife lets the company “reach consumers directly and not through middlemen.” That’s a huge departure from the traditional pay-TV model, and more aligned with Apple CEO Tim Cook’s vision of “TV as an app.” Colin sees broad implications of DisneyLife, though I think expanding it to other geographies, given rights issues, will be difficult in the short-term.

We then dig into some good news for JetBlue fliers - unlimited Amazon Prime video streaming will now be available on 150 JetBlue airplanes per an announcement from the companies this week. If it works well, this would be a winning deal for everyone involved - Amazon, JetBlue and passengers. We explain why and what could follow.

Listen now to learn more and happy Thanksgiving to everyone!

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Disney CEO Bob Iger was interviewed on CNBC’s “Squawk Box” this morning (see below embed) and offered a surprising long-term vision for ESPN, saying, “Eventually, ESPN becomes a business that is sold directly to the consumer, where there’s an engagement that ESPN will know who their consumers are, will use that information to customize the product to enable personalization, to engage more effectively and offer advertisers more value as well. That’s longer-term. I think there’s an inevitability to that, but I don’t think it’s right around the corner.”

It was the first time that I’ve heard Iger articulate so clearly how he sees ESPN’s future unfolding. Iger made the comments in the context of describing the huge distribution, promotion and consumption changes roiling the media landscape. Iger observed that despite a fall-off in pay-TV subscriptions, he doesn’t see the ecosystem changing significantly in the next 5 years, and that it was impossible for anyone predict with conviction how the media world will look 10 years from now.

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There's no better illustration of the massive disruptive impact of OTT options like Netflix, Hulu and Amazon Prime than the decimation of kids-oriented cable TV networks currently playing out. According to Todd Juenger, senior analyst at Bernstein, whose weekly TV Audience Tracker (which is based on Nielsen data), I closely follow, viewership of kids cable TV networks is down 23% quarter-to-date in 2015 vs. the same period of 2014.

The trends are even worse. For the most recent week (ending Feb. 1st), viewership was down 28%, following the prior week when it was down 29%. These declines compare to the relatively more modest-looking Q4 '14 decline of 16.8% vs. Q4 '13. For the Feb. 1st week, all kids cable networks were down, with Nickelodeon losing the most - a whopping 44% of its prior year viewership, and Cartoon Network losing the least - 3% vs. the prior year. Every kids cable network Bernstein follows is down so far this year, except Cartoon, which is up 6%.

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I'm pleased to present the 226th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we focus on Maker Studios and the broader trend around short-form online video and its appeal to millennials.

The Maker NewFront earlier this week in NYC, which I attended, underscored for me how well the company is differentiating itself from traditional TV. Rather than trying to emulate HBO (as Netflix is doing) or chase Netflix itself (as Microsoft, Yahoo and others pursuing TV projects seem to be doing), Maker is carving its own path, focused on delivering breakthrough short-form content that resonates with millennials.

A key success factor is the creative freedom Maker talent has, allowing authenticity which appeals to millennials. Unvarnished and sometimes wacky, Maker's programming exemplifies how unconstrained the web is for the next generation of talent. Of course a key question is if or how things will change under Disney (whose CEO Bob Iger offered his first public comments on the deal this week).

(Note there's an approximately 5-second dropout in my audio about mid-way through. We're still wrestling with Skype's quality.)

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It's becoming harder and harder to remember the days when YouTube was principally known for its quirky  user-generated videos featuring cats on skateboards and the like. The evidence of YouTube's transformation into a legitimate video distribution powerhouse seems to pop up on an almost daily basis. Here are a few of the disparate items that have hit my radar:

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I'm pleased to present the 218th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Both of us have continued to observe signs of how online video is coming of age, and today we discuss some of them.

We start with news that Comcast will begin selling episodes of "House of Cards" in its Xfinity online store. Putting aside the question of why someone would buy an episode for $1.99 when they could binge-view all 26 episodes in a month for $7.99, both of us thought it's noteworthy that the largest cable operator believes an online-only series is worth selling (and note too, the deal was done with Sony Pictures, and that Verizon also has been selling the series).

Then there was the report that Disney might acquire Maker Studios, a pure-play online video / YouTube content provider. While Colin and I get a chuckle out of the idea that the Disney flag could fly over Epic Rap Battles and PewDiePie, we agree it would be a smart bet to gain reach into the all-important millennial segment.

Then we turn to the $18 million investment by Warner Bros. in Machinima, an online video gamer-centric content creator also targeting millennials. The 2 companies already had a successful collaboration with the "Mortal Kombat: Legacy" web series. No doubt the new investment will spur more gamer-centric originals for distribution by Warner Bros.

We wrap up by discussing just how important millennials are to the video's future. Recent data suggest this group is still pretty glued into the pay-TV ecosystem, but their behaviors are changing fast, in turn leading established media companies to focus on online video more than ever.

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Big media companies are often cast as lumbering giants, slow to recognize change and even slower to embrace it. But for Disney, that stereotype looks increasingly inappropriate, as the company continues making moves to better position itself for the vastly different upcoming online video era.

Yesterday's report that Disney is mulling an acquisition of Maker Studios for $500 million, one of the biggest of the YouTube multichannel networks ("MCNs") with over 500 million videos viewed/month in January, is the latest sign that Disney recognizes the future rules of the road in the media industry will be far different than they were in the past. Maker - and other big MCNs - underscore 3 of the biggest emerging rules: (1) that talent can now break big without the backing of the traditional media, (2) that YouTube is a bona fide new distribution platform and (3) that traditional media's grip on millennials may be slipping.

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Do millennials want pay-TV or don't they? This is one of the most hotly-debated topics in the video industry today. The "don't" camp is well-represented by Charlie Ergen, head of DISH Network, who recently said, "We’re losing a whole generation of individuals who aren’t going to buy into that model because they only want one particular show or they want to watch the show wherever they can or they want to watch it on their schedule and so that generation is not signing up to satellite or cable or phone video today."

Last week, Ergen and DISH took an important step toward re-imagining pay-TV to make it more relevant to millennials by securing OTT distribution rights to key Disney/ESPN channels.  Bloomberg reported that a new OTT service from DISH could sell for $20-30/month, far less than today's typical pay-TV bundle. BTIG's Rich Greenfield subsequently fleshed out what a new lower-priced personal subscription service or "PSS" could look like: a limited access one-stream-at-a-time model geared to single-adults or light TV viewers.

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I'm pleased to present the 217th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. In today's podcast, we interpret this week's DISH Network - Disney deal, the highlight of which was DISH gaining OTT distribution rights for ABC-owned stations, ABC Family, Disney Channel, ESPN and ESPN2. The networks would become a foundation for what Colin has dubbed a "VPOP" or virtual pay-TV operator.
 
Colin notes that for DISH in particular, a VPOP offering would let it acquire new subscribers far cheaper than it currently does. An easy in / easy out subscription model, akin to how Netflix operates, could sit well with the younger, cord-never audience. Still, as I've often said, the biggest driver of success for any VPOP would be lower prices, in order to steal share from incumbent operators in the fully mature pay-TV market. Given the cost of assembling a competitive lineup of networks, DISH would have limited ability to offer bargains.

Following our DISH-Disney discussion, Colin also shares highlights of new research his firm released this week, "Store My Stuff - Consumer Digital Media Storage" which provides data on how consumers are storing digital media including downloaded movies and TV shows. The report, which was sponsored by PLEX, is available for complimentary download.

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Disney launched its long-planned digital movie service today, dubbed Disney Movies Anywhere ("DMA" for short). Disney made a bold decision when it opted not to participate in the UltraViolet consortium that includes 6 of the other big Hollywood studios, choosing instead to go with its own "KeyChest" authentication technology. Having spent some time with Disney Movies Anywhere this morning, I think there are 5 reasons that DMA looks like a winner, offering lessons for other content providers seeking to capitalize on paid online models.

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I'm pleased to present the 194th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. First up this week we discuss CBS CEO Leslie Moonves' remarks on CNBC essentially declaring victory in the company's retrans dispute with Time Warner Cable because it had preserved its ability to license its programs to Netflix and Amazon. Listeners will recall that 3 weeks ago on the podcast we talked about how OTT licensing was at the heart of the dispute and the consequences for TV Everywhere.

Next we transition to questioning whether there's any real benefit for TV networks and pay-TV operators to stream linear channels to connected TVs. Colin observes that recent data from the BBC indicating very low levels of linear streaming on connected TVs appears to question the value of the Disney-Apple TV and Time Warner Cable-Xbox 360 deals. We speculate that these are mainly meant for 2nd or 3rd TVs that don't have pay-TV set-top boxes.

Last, we chat briefly about the massive 3-part series that the NY Times ran just before Labor Day on ESPN's dominant role in college football - a long, but fascinating read. As I wrote, it's well worth the time for anyone interested in the influence of big time TV money not only on college sports but also on the broader American higher education system.

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Last Friday afternoon, Hulu's owners Disney, Fox and NBCU/Comcast (note NBCU/Comcast is a passive owner) announced that they wouldn't be selling Hulu, despite an active bidding process. Instead, the companies will retain their interests and plan to invest $750 million in Hulu to grow it. Although the principal reason for the sale was a disagreement over Hulu's business strategy, the announcement said Fox and Disney are "fully aligned in our collective vision and goals for the business (although what they actually are were not disclosed).

This was the second time a Hulu sale failed to materialize and I believe that once again, the reason was that Hulu's owners realized "you can't have your cake and eat it too." Translation: Disney and Fox wanted to retain all kinds of content rights and flexibility, yet still wanted a very high valuation for the business. Since Hulu's next-day broadcast rights are at the core of its valuation, Disney and Fox's attempt to chip away at them led bidders to reduce what they were willing to pay, obviously beyond the level at which Fox and Disney felt it was still worthwhile selling the business.

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