Copy
January Thirteen

Big Business
 
Regular readers will recognise this chart - we first used a version in my Vidcon talk a couple of years ago and shared an update version last year. This latest version shows how big newTV is and how complicated this market is. It is interesting just how much some of the valuations have changed - whilst Disney is 42% up on the joint value of Disney and 20th Century Fox, but AT&T is down 30%. Comcast and Verizon are up a little too.
 
But Apple and Amazon are 2.5 times more valuable now - and Netflix has doubled in value 
 
This underlines one of the points made in our first newTV webinar yesterday - these 3 companies are so big, no one can touch them. This is largely due to the fact Amazon and  Apple are playing a different game
 
Whilst income from streaming subscriptions and advertising is a nice earner, the content is designed to bring people into their ecosystems, so that they make more money from their core businesses. Amazon profit from ecommerce and Apple profit from hardware sales.
 
Netflix seems to be unassailable too. Their programming (and their excellent PR) drives culture. Everyone talks about whatever their latest big show is (Tiger King, Schitts Creek, The Crown, Queens Gambit, Bridgerton etc) and they have just announced they will release a new film every week this year.
 
The rest of the industry is looking to find a niche around these 3. 
 
Our Webinar
 
The first of our two webinars went well yesterday. The focus was on the businesses in newTV and the different business models. A good audience and excellent panelists made for a fascinating discussion. The full video of the event is now available here.
 
Next Tuesday we go more into the content and its distribution; how will streaming sit with cinemas post Covid and will people pay a premium for watching blockbusters at home? We will also look at the global nature of the newTV business - whilst the chart above is very US centric, most of these businesses have global ambitions. But they face strong competition from local and regional players - particularly in APAC.
 
Make sure you have a ticket by registering here.
 
FAST (Free Ad supported Streaming Television)
 
Another theme from yesterday was the balance between subscription and ad revenue. Whilst Netflix keep saying never (despite all the brand integration in Stranger Things etc) most players are experimenting with a blend of both. The new UBS study on TV supports many peoples thinking, saying 3 subscriptions will be the norm.
 
Of course different people will have a different 3, but even the UBS forecast of 2 billion subscribers doesn’t generate enough subscription revenue to sustain all these firms. So ads will grow in importance.
 
Amazon and Roku are going to dominate here - as they keep accumulating ad inventory from the services accessed through their platforms. Roku made the news this week with their licencing of Quibi content - and great subscriber numbers. They look small on the chart above with a valuation of ‘just’ $47bn - but have huge potential. (This thread on their history is good - they started as a Netflix hardware project then the plug was pulled and the Netflix stake was sold for just $10m. More here.)
 
It’s worth remembering that whilst ad focused streaming services like Pluto, Tubi, Xumo don’t get many headlines, they are owned by Viacom, Fox and Comcast respectively - so have relatively deep pockets.
 
There is a big debate on how you value some of these businesses. Fubo IPOd this year and the stock has done well with one analyst setting a price target of $60 - it’s currently around $36. But another respected analyst vehemently disagrees and has a sell rating with a target of $8
 
The big question on ads in new TV is what form they take - a linear 30 second TVC really isn’t the best solution. This is an area we want to go deeper on this year.
 
Discovery
 
Another discussion yesterday was about discovery - as one panelist put it where do you go to find out what to watch? UBS mention the average consumer taking 9 minutes to search for a show - and that 20% give up.
 
We plan to go deeper next Tuesday on this. Will studios choose to promote their content being distributed by Netflix? Or just leave it to the formidable marketing team at Netflix? I see Twitter ads this week for a new Gary Oldman film called Mank - probably from Netflix, although branded Mank. But there are some independents - I saw that a site called Whats on Netflix had 72m visitors last year
 
One panelist yesterday pointed out that a big proportion of newTV ads are platforms promoting their content. We have a marketing exec from a studio talking next week, so we will focus on this too.

btw - Pretend It’s a City - the Fran Lebowitz series on Netflix - is excellent.

From UBS - This is why we are so interested in newTV - it is disrupting and reshaping two trillion dollar businesses - Advertising and Media & Entertainment. Huge opportunity. 

Plus+
 
Forget the Streaming Wars—Pandemic-Stricken 2020 Lifted Netflix and Others
 
Samba TV Reports Strong Growth and Continued Momentum in 2020
 
Top 10s: TV Ratings, Video Games, SVOD - Discover What Americans Are Watching And Playing
 
Videogames are a bigger industry than movies and North American sports combined, thanks to the pandemic
 
Amazon’s first TV is only available in India
 
Fire TV Review: A Great Budget Pick for the Alexa Crowd
 
Formula One in talks with Amazon to stream Grands Prix
 
#47 Portfolio vs. Featurization of Sports Programming?
 
Made for TV - Disney and Warner make big bets on the small screen | Business
 
Lockdown drives UK TV streaming customers to more than 32m
 
Why Content is King
 
Nielsen One Has Potential To Pierce Measurement Veil
 
Roku Torments Entertainment Giants in Quest to Dominate Streaming

Reprise; newTV - Fix December 18
We went deep on newTV this Wednesday. So much going on - catch up here. And check out our January events on Streaming and its effect on the Cinema business. Tickets are free and we have people from Google, Snap, Warners, BBC and more already signed up.
 
I mentioned Fraud as one factor holding newTV back and we now see a new fraud affecting Oracle. With the number of credible sources of quality inventory probably in the low thousands, can we not build more robust systems. Do we need to import adtech plumbing designed for the long tail of millions of websites?
 
With WonderWoman streaming in little more than a week it’s not that surprising to see the long running dispute between Warner and Roku get resolved. It's likely Roku got the 30-40% of ad inventory they usually demand.
 
USB have published an interesting looking report on the future of TV - but none of my usual sources can get me a copy. Anyone have one to share?

Reprise; newTV - Fix January 8
As we prepare for our newTV events next week, there is lots happening in this space. The jury is out on whether the Wonder Woman 1984 release strategy actually worked.  We know the film took $16.7m at the US Box Office - versus c $100m for the first Wonder Woman. But with only around a third of US cinemas open, this is felt to be a decent performance. And it was lifted by lots of Private Watch Parties, where people hire a screening room. Streaming performance also looks good - with AT&T claiming;
 
nearly half of HBO Max’s retail subscribers viewed the film on Friday alone, along with millions of wholesale subscribers who have access to HBO Max via cable, wireless or other platforms. 
 
The Antenna data above shows it was very good at driving new subscriptions for HBO Max - beating Hamilton for Disney+. But retaining new subscribers, lured by one title, is hard; a quarter of those who subscribed for Hamilton left after 1 month - and after 3 months just 59% remained.
 
One fascinating twist in this space is hearing that Roku is negotiating to buy Qubi content. I think Roku is a great business (with over 50m active accounts) as its position as a (hardware) gatekeeper makes them a powerful player in newTV ad sales. And despite a booming share price i think it must be an acquisition target for someone. But spending some of their diminishing cash on content that Quibi could not build an audience for? 
 
Doesn't seem smart. Original content is an expensive business, with many rich competitors. The sale of the MGM studio (and library) looks like being the next big content contest - with a price tag of $5bn - but that does get all the Bond films.
 
Another gatekeeper is AppleTV - and their data on the top 100 films watched in 2020 is really interesting - even without actual numbers on viewers. It’s clear that HBO Max is a player with a great library and the non linking of Netflix and Apple means their showing is probably under represented. Also interesting to see pricing average out at $5 for rental and $11 for purchase.
 
The latest US launch is Discovery+ (which launched in the UK last year in a collaboration with Sky). They are banking on sports - and the Olympics - to drive growth.
 
Amazon announced they have 50m active users on FireTV - neck and neck with Roku 
 
We will go deep on all this next Tuesday in our free Zoom webinar in partnership with FTI Consulting. We have great panelists and lots of smart people attending from Google, Snap, BBC, Warner Brothers and many more. Make sure you have a ticket for both events.
Making the simple complicated is commonplace;  Making the complicated simple, awesomely simple, that's creativity - Charles Mingus

I'm with Charles. Too many people make things overly complicated.
I look for the patterns that unlock opportunities. How could I help you?


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