Narrative: Disrupting TV
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Verizon Exploring Combination With Cable Firm Charter Communications – WSJ (Jan 26, 2017)
I continue to be really skeptical on this deal or anything like it – the only way it could be approved is if Verizon or Charter sold or spun off their operations where the two companies compete, and even then I’m not sure there’s appetite for another mega merger between broadband and TV providers. I see the rationale – the TV business in particular is all about scale, and AT&T and Comcast tower over the rest of the market (even the new Charter has almost 6 million fewer TV subs than Comcast, and over 8m fewer than AT&T-DirecTV). Combining Verizon and Charter’s subs would approach Comcast’s scale in video, while adding wireless, which Comcast is about to add through a partnership with Verizon. But there would be massive challenges here – combining incompatible technologies for delivering voice and data services to homes, along with the cultures of a telco and cableco. And of course regulators would be likely to be very skeptical at the outset (though this administration will certainly view it more favorably than the last). I’m just not convinced this is the right way for Verizon or Charter to go, and there’s no sign that Charter is even interested.
via WSJ
Comcast Reports 4th Quarter and Year End 2016 Results – Comcast (Jan 26, 2017)
Comcast is an enormous and complex company, with its US cable and broadband business but also a movie studio, theme parks, the NBC TV business, and more, and as such it’s hard to its results justice in a brief space, so I’ll focus on a couple of key areas. Firstly, it saw video subscriber growth for 2016 as a whole, the first time that’s happened in a decade. This wasn’t a surprise – Comcast’s video net adds have been trending upwards for several years, mostly because the major telcos (AT&T and Verizon) have taken their foot off the gas in selling their TV services (AT&T has instead ramped up its satellite based offerings through DirecTV). All the cable companies have benefited from this, but Comcast perhaps more than most. It’s worth noting, though, that cord cutting is accelerating overall, and Comcast is gaining share in a shrinking market, and its programming costs are also rising as a percentage of its TV revenues. We didn’t get much more clarity on Comcast’s wireless ambitions on the call, other than that the focus will predictably be on bundling. But that service should launch in H1. I’m asked a lot about the prospects for that service, but so much depends on the details of what Comcast launches – on balance, I’m fairly bearish.
via Comcast
‘Manchester by the Sea’ Nomination Makes Oscar History for Amazon – Variety (Jan 24, 2017)
Amazon has become the first streaming service to have a movie it owns nominated for best picture at the Oscars. This follows years of Netflix and Amazon content receiving nominations for TV awards, and Netflix has previously earned nominations in other categories. The catch here is that Amazon released Manchester by the Sea in theaters, so it feels much more like a traditional release than most of Netflix’s movies (The Little Prince, a Netflix-owned movie that didn’t debut in theaters, was not nominated in the best animated feature category despite being well received). So although there’s some symbolism here, it’s mitigated a little by the fact that the movie still received a traditional theatrical distribution (and did well there). It is ever clearer, however, that Amazon and Netflix (and potentially others) will continue to grow as a force in movie acquisition – the Sundance Film Festival is underway at the moment and we’re likely to see several more big buys there as the streaming companies beef up their libraries with exclusive content.
via Variety
Verizon Lays Off Go90 Employees, Tasks Vessel Team With App Rebuild – Variety (Jan 23, 2017)
Verizon’s Go90 has never seemed like the right answer to the question of what a mobile carrier should do to make money from video (the right answer might either be launching a fully fledged video service a la DirecTV Now, or simply enabling all other video services a la BingeOn). These layoffs seem like validation of that sentiment, as it looks like Verizon is doing a bit of a reset on its Go90 efforts, putting former Vessel people in charge instead of the 155-strong team it’s had in San Jose for some time now, most of whom came from the Intel OnCue acquisition. Go90 has always been an odd mishmash of stuff, mostly freely available elsewhere with a few freemium elements focused on millennial-oriented content, but has never felt like a serious video play, and I still don’t expect it to turn into any kind of meaningful business for Verizon unless there’s a big pivot to a new strategy for the service.
via Verizon Lays Off Go90 Employees, Tasks Vessel Team With App Rebuild | Variety
Roku Mobile App Relaunched With New Program Guide – Variety (Jan 17, 2017)
Discovery has been one of the biggest challenges in TV in the present era. There’s simply so much to watch, and so many ways to watch it, that the old interactive programming guide for live, linear programming simply doesn’t cut it anymore. Netflix has been a master of recommendations for ages now (and famously sponsored a big prize to improve its engine even further), but a variety of others have been working on this too, with Roku the latest. Interestingly, in contrast to Apple’s approach, this feature lives in the mobile app and not the main on-screen user interface, though I wouldn’t be surprised if it arrives there too sometime soon. Of course, the quality of the guide can only ever be as good as the partners that choose to participate – Netflix is a big holdout for the Apple TV app, and as far as I can tell it’s absent from the new Roku feature too.
via Roku Mobile App Relaunched With New Program Guide | Variety
Eyeballs Are No Longer Enough for Netflix – WSJ (Jan 17, 2017)
This piece is largely speculation – there’s no evidence presented that investors are impatient for Netflix to start churning out bigger profits or reducing its cash burn. Rather, those investors seem to understand that rapid international expansion at the expense of short-term profits is key to longer term success for Netflix, because it drives much faster overall growth and helps spread the cost of content over more users. Netflix’s domestic business is already very profitable on a contribution basis, while its international business is profitable on the same basis in some markets. Growing and getting past the early high investment in customer acquisition in other international markets should put Netflix in the black there too. Netflix definitely does need that growth – at the rate it’s increasing content spending, it has to grow revenues to stay ahead of costs – but on balance I’m fairly bullish about Netflix’s ability to make its strategy pay off.
via Eyeballs Are No Longer Enough for Netflix – WSJ
Amazon Launches Anime Strike Channel for $5 Per Month – Variety (Jan 12, 2017)
Here’s the second story today about a tech company expanding in the video business. Whereas Apple’s video investments have almost all been happening behind closed doors, with very little public indication of where its strategy is heading, Amazon has been taking a different approach: drip-feeding piecemeal announcements that are slowly adding up to an interesting subscription video business. On top of the Netflix-like service bundled into Prime, it now has relationships with a number of standalone content providers like HBO, Starz, Showtime, and Cinemax, and this anime channel is its first Amazon-branded channel. This whole approach has now been branded AmazonChannels, and it’s actually a pretty smart strategy for building up to a more fully-fledged pay TV-type service. Anime happens to be one of those categories that has a small but passionate audience, and AT&T’s Otter Media has also invested in this space for similar reasons.
via Amazon Launches Anime Strike Channel for $5 Per Month | Variety
Apple Sets Its Sights on Hollywood With Plans for Original Content – WSJ (Jan 12, 2017)
Apple has been investing in video content for a while now, with the unusual strategy of pushing most of it to subscribers through a music service, rather than a dedicated video service. On the one hand, it’s a way to set Apple Music apart, and to the extent that there’s been something of a music theme to some of this video content, that makes sense too. But I still think this investment is really laying the groundwork for an eventual subscription video service from Apple, using the Music investments as cover. At this point, Apple has to get into the video subscription business if it’s to protect its ecosystem around content, much as it belatedly got into streaming music. The exact shape of that service – whether Hulu-, Netflix-, or DirecTV Now-like, is still unclear. I suspect it’ll launch by the end of this year, however, and this kind of original, exclusive content is increasingly essential for differentiation regardless of which of these models it pursues.
via Apple Sets Its Sights on Hollywood With Plans for Original Content – WSJ
Netflix Wants the World to Binge-Watch – Bloomberg (Jan 12, 2017)
Though the headline is accurate, the whole point of this article is that Netflix isn’t taking a single global approach to expansion, but instead is focusing on creating localized content for various different markets, with the focus of this article its efforts in Brazil. One of the big challenges for Netflix as it expands is balancing the massive scale economies it gets by offering the same content in many markets against the need to provide culture- and market-specific content to differentiate in individual markets. The latter is of course potentially expensive, but it will be hoping that investing in one major market in a region helps attract customers in other markets in the same region, and Narcos is a great example of more regionally-oriented content. However it pans out, for now Netflix is streets ahead of any other video provider in providing locally relevant content in many markets around the world.
via Netflix Wants the World to Binge-Watch – Bloomberg
Best Buy launches cord-cutting campaign with website & how-to video – Rich Greenfield (Jan 10, 2017)
This move by Best Buy is both notable and clever – notable because it swings one of the biggest consumer electronics retail brands behind cord-cutting, and clever because Best Buy is selling far more than just online subscriptions here. It’s using the cord-cutting umbrella to sell lots of gear too, from wireless routers to antennas, and even offering to help with installation through Geek Squad and how-to videos. Stuff like this is just going to accelerate cord-cutting even further, pushing it closer to a tipping point where it will cause enormous disruption in the TV industry.
via Rich Greenfield on Twitter