VideoNuze Posts

Earlier this week Comcast took the wraps off StreamSaver, its new streaming bundle available for Xfinity subscribers. For $15 per month, StreamSaver bundles Peacock Premium, Netflix Standard with ads and Apple TV+. If subscribed to separately the combined total would be $25 per month, as of July 1st when Peacock Premium’s price will rise to $8 per month. That means StreamSaver provides a bundled discount of $10 per month, or 40% off the standalone rates.

As Colin and I discuss, StreamSaver’s discount is in the same range as Disney’s Duo and Trio bundles, which fall between 35% and 44%. It also means that if Xfinity subscribers took both bundles, they would get 6 top streaming services - Netflix, Disney+, Hulu, Apple TV+, Peacock and ESPN+ for $30 per month, or an average of $5 per month per service.

From our standpoint, all this seems really appealing, especially to budget-conscious consumers. Think for a moment about the vast selection of entertainment and sports programming across these 6 services - all for $30 per month, which is far less than it would cost to take a family of 4 to a single movie, for just 2 hours of entertainment.

But as we also discuss, these discounted bundles need to perform their critical function of reducing churn and extending subscriber lifetime value. With so many different decisions required by viewers about what bundle (if any) to choose, it’s gong to be challenging to pinpoint causalities and correlations, making the elusive goal of streaming profitability ever more opaque.

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[UPDATED]

Netflix revealed at its Upfront this week that it now has 40 million monthly active users on its lower-priced ad-supported tier. It’s not clear how monthly active users and subscribers relate to each other. But I think it’s probably fair to assume that closer to around 10% of Netflix’s 270 million global subscribers are now ad-tier subscribers (Colin and I will clarify this further on next week's podcast). Not too shabby since the ad tier only officially launched in November, 2022. No surprise, Netflix is also creating its own ad-tech stack with partners.

In addition Hub Research released survey data showing that 15% of respondents cited Netflix as the brand that would most likely make them sign up for a bundle (Amazon followed with 12%, followed by AT&T with 10%).

As Colin and I discuss, all of this nicely positions Netflix to play a lead role in the “streaming bundles” age that has already begun (note that Comcast announced a Netflix-Peacock-Apple TV+ bundle this week, pricing TBD). And with the Netflix app ubiquitously available, it could be a key “on ramp” to targeted streaming bundles, based on viewers’ demonstrated interests. Given Netflix’s newfound scale in CTV ads, a bundling play could also find Netflix with a lead role in selling/managing ads across bundled services.

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According to new data from Hub Entertainment Research, Amazon’s Prime Video now has the highest percentage any major SVOD provider taking its ad-supported tier. And it happened by Amazon simply flipping a switch at Prime Video to make ads the default for all subscribers. Perhaps most interesting is that two other major SVOD providers - Netflix and Disney+ used completely different strategies in introducing their ad tiers. Colin and I discuss why Amazon’s move is so significant for the company and the broader streaming industry.

Meanwhile this week Disney reported a $47 million profit in fiscal Q2 ’24 in its DTC segment, which includes Disney+ and Hulu. Profitability hadn’t been forecast until 6 months from now. It also added 8 million D+ subscribers domestically in the quarter. But as Colin details, closer analysis shows that Disney’s recent deal with Charter somewhat obscures the gains. There’s also the pressing question of whether DTC can be sustainably profitable.

We tackle lots of other juicy topics this week too: Tubi’s continued growth, advertising’s increasingly important role in supporting the streaming ecosystem, WBD’s cost-cutting and bundling plans with Disney, plus more.

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This week’s NewFronts highlighted three key and interlocking themes: TV OEMs’ emphasis on FASTs, AI’s role in driving video ads’ value, and CTV evolving to full funnel. We discuss each of these and how specific NewFront presentations addressed these points.

All of these feed a broader belief I’ve had for while: the value of a CTV ad - as measured by the financial return derived from gaining a unit of the viewer’s time - is only going to increase in the years ahead. Ads will continue to be more targeted and personalized, and also drive KPIs across the full funnel as viewers’ opportunities to engage soar.

Separate from video ads, I share highlights from IAB’s three-part session on Monday afternoon called “Spotlight On: News” which focused on the value of news media for brands and society. Huge credit to IAB for convening numerous C-level news executives to discuss the important role of trusted news in democracy and why it is good business for advertisers to be involved.

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This week we’re delighted to interview Wurl’s CEO Ron Gutman who discusses the company’s new AI-powered BrandDiscovery product that allows ads to be aligned with content in real time.

Ron explains the eight key emotional reactions to specific scenes in entertainment programming, and how ads that are consistent with these emotions deliver far higher conversion. He also details the critical role AI plays in enabling improved personalization and targeting. The discussion further demonstrates how units of advertising are going to become ever more valuable as technology enriches them.

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Colin was at NABShow for a couple days and on this week’s Inside the Stream we discuss some of his top takeaways. No surprise AI was everywhere at NAB, as was blockchain. We discuss companies including Moments Lab, Obvious Future, LivePeer and others. Finally Colin learned some neat tricks for all of us to be greener with our big screen TVs, which he shares.  

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AI has taken the world by storm and the TV/video industries are no exception. AI is revolutionizing the value chain of video creation, delivery and discovery. On this week’s podcast we discuss several examples, including a new partnership between Cineverse and Nielsen’s Gracenote. The role that Cineverse’s AI chatbot “Ava” - and others - could eventually play in viewers’ discovery experience is early stage, yet quite exciting.

Also part of our AI discussion is new survey data showing 70% of newsroom members are using AI to create content, The Weather Company’s use of AI to enable hyperlocal weather videos and Adobe’s forthcoming AI text-to-video product.

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On the podcast this week Colin and I dig into Tivo’s Q4 2023 Video Trends Report, released earlier this week and available here. Among other things, TiVo’s research found that in the past 2 years the number of paid video services used per respondent has leveled off while non-paid services has increased, indicating higher levels of ad tolerance.

Meanwhile, TiVo found that the gap between people signing up for a new streaming service and dropping one is at an all-time low, highlighting how churn remains an issue.

In addition, nearly half of respondents typically go to 2 or 3 streaming apps before deciding on something to watch. Just 19% of respondents said they know what they want to watch, once again revealing how important discovery remains.

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