Topic: Video
★ Amazon is Reportedly Looking to Buy Lower-Profile Channels from TV Companies (Sep 15, 2017)
NBC News reports that Amazon has been talking to traditional TV companies about taking some of their lower-profile networks off their hands. Four specific examples cited in the article linked below are VH1 and CMT at Viacom and Adult Swim and Boomerang at Turner. Big TV companies have been shutting down cable networks over the last few years and focusing their efforts on a smaller number of successful channels with big audiences as cord cutting begins to really bite, so there are potentially quite a few channels with smaller audiences out there for the taking, and NBC says Amazon might buy “scores” of them, though that number might be a bit of a stretch. At any rate, the question becomes what Amazon would do with them, and the obvious answer is either bundling them into Prime or selling them as add-ons to Prime. But another really interesting angle to think about is advertising, where Amazon has been quietly building a big online business but with very little action so far on the video side. Owning lots of linear channels would allow it to build a much bigger video ad business as a complement to its online ad business, and potentially do cross-platform targeting across them. It’s also a fascinating alternative to spending ever more to commission and/or acquire original content for its streaming service – it could probably snap up some of these channels pretty cheaply and run them for less than it would cost to build up equivalent amounts of original content from scratch. Importantly, some of these networks have small audiences but lots of distribution – VH1 is in well over 80 million homes, for example. That would be pretty good relative to Amazon’s own domestic distribution through Prime.
via NBC News
Google, Like Apple, to Disable Autoplay Videos in its Browser (Sep 15, 2017)
Google has announced that its Chrome browser will begin either silencing or blocking autoplay videos with the version it currently expects to release in January 2018, echoing Apple’s decision to disable autoplay videos in the latest version of its Safari browser (which also limits retargeting using third party cookies, as I wrote yesterday). That so many websites still run autoplay videos – especially with sound – is egregious, so it’s great to see both of these major browser makers take steps to limit the impact. Both browsers will offer some fairly granular controls on both a general and site by site basis for disabling or silencing autoplay videos. As far as I can tell, Microsoft’s Edge browser doesn’t yet support blocking autoplay in general, while Firefox allows blocking but only through a fairly fiddly process of editing its config file.
via Google
Hulu Will Spend $2.5 Billion on Content in 2017 (Sep 14, 2017)
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YouTube By Far Most-Used Video App on Android, Grosses More Than Hulu (Sep 13, 2017)
Variety has a quick run-down of some new data from App Annie about the usage of various mobile video apps in the twelve months to July 2017, and it shows YouTube to be dominant in that category, with 80% of total time spent for the top 10 apps. Also notable is that YouTube grossed more than Hulu on the strength of its YouTube Red subscription service, suggesting that it may be doing better than widely perceived, though that may also reflect YouTube’s role as a more mobile-centric platform while many users may pay for their Hulu subscriptions through a computer or TV box. Also worth noting is that over half the top ten video apps come from non-traditional TV brands – only HBO, Starz, CBS, and Showtime hit the top ten, while the rest are all digital-native brands. Also notable is the fact that all of those traditional TV apps have pursued the same successful strategy of opening up their entire libraries for digital rather than trying to create a digital service that’s complementary to traditional TV – that’s the winning strategy in this space, and Disney should take note as it readies an ESPN direct to consumer service for early next year.
via Variety
Facebook is Testing its Houseparty Clone Bonfire in Denmark (Sep 13, 2017)
Facebook has been reported for a while to be working on a potential clone of popular video chat app Houseparty, and it has now officially launched the app in Denmark under the previously reported Bonfire name as a limited test. The features sound similar to those in the Houseparty app, which was recently reported to be achieving some impressive user metrics (though I noted some important caveats). The key to Facebook’s success here, as I also noted in that earlier piece on Houseparty, will be disconnecting this app to some extent from the Facebook social graph and allowing users to form more intimate circles of friends as they can in Instagram. That’s been a key part of the value proposition for both Snapchat and Houseparty, and it’s something that’s never come easy to Facebook, which still often seems to misunderstand its most effective competitors for users’ time.
via The Next Web
AT&T Extends Free HBO Offer to All New Unlimited Wireless Plans (Sep 12, 2017)
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Facebook is Testing Downloadable Instant Videos (Sep 12, 2017)
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Discovery, Viacom, AMC, A&E, and Scripps Working on Sports-Free Bundle (Sep 12, 2017)
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Amazon Shifts Original Content Efforts to High End Drama with Global Appeal (Sep 11, 2017)
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Facebook Willing to Spend $1 Billion on Video Content by End of 2018 (Sep 8, 2017)
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Spotify Adds Hulu to $5 Per Month US College Student Subscription (Sep 7, 2017)
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Spotify and Apple Make Video Content Hires (Sep 6, 2017)
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★ T-Mobile Announces Free Netflix for Family Plan Subscribers (Sep 6, 2017)
T-Mobile today announced its latest “Un-Carrier” move today, in one of its simplest and certainly its shortest announcement so far: it’s offering free Netflix subscriptions to subscribers to its family plans. Specifically, the offer is available to subscribers who have at least two paid voice lines on the T-Mobile One plan introduced in August last year. That’s now the standard plan for new customers, but many existing customers will be on older family plans and will need to switch to those plans, which may cost more than those offered previously. Typically, two paid lines will be $120 per month with taxes and fees included, so the annual benefit of this offer is equivalent in value to a month’s wireless service. T-Mobile has just over 12 million postpaid accounts at the moment, with an average of just under 3 lines per account, so that gives some sense of the addressable market here, although many would need to switch to T-Mobile ONE to qualify. For Netflix, the upside is smallish – a few million potential new customers over the next few years – but low risk, with these subscribers likely having lower churn.
Certainly not all of those lines would qualify today, but assume that a quarter of those accounts eventually take the Netflix offer, and it ends up being about $90 million per quarter at the full $10 price, which I’m guessing Netflix isn’t paying. More realistically, at 80% of the full retail price, the cost to T-Mobile would be closer to $70 million on a revenue base of roughly $10 billion in revenue per quarter, so the cost is likely to be far from material for the company. Conversely, the Netflix offer will likely increase loyalty and therefore reduce churn and the costs associated with it, and drive more people to the T-Mobile ONE plans and thereby increase ARPU in at least some cases, so T-Mobile will not unreasonably be hoping the net effect on margins is positive.
This move is just the latest in a long string of Un-Carrier moves from T-Mobile, the vast majority of which have been fundamentally about the price or cost of service, either discounting services or throwing in freebies, while dressing the moves up as being something more. That’s clearly worked for T-Mobile, as it’s been by far the fastest growing postpaid phone operator in the US over the last several years, and this move is likely to provide a further little boost, though not a massive one. And of course it’s worth noting that AT&T has been offering free HBO to some of its unlimited subscribers for a while too, so T-Mobile certainly isn’t the first to offer a bundle, but Netflix has broader appeal in the US than HBO and the requirements to qualify are less stringent on the T-Mobile plan.
via T-Mobile
Facebook Tries Paying Music Labels to Cover Infringing Material Ahead of ID System (Sep 5, 2017)
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Facebook Bids Over $600m for Indian Cricket Rights But Loses Out to Broadcaster (Sep 5, 2017)
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★ Roku Files to Go Public, Loses Money, Sees Ads as Core of Future Business Model (Sep 1, 2017)
Roku today made public its S-1 filing with the SEC as the first step towards a long-awaited IPO. I’ve been tweeting charts and nuggets from the filing for the last couple of hours in this thread, but I’ll provide a brief summary here. The long and the short of it is that Roku is growing at a decent clip, is currently unprofitable with little sign of that changing, and is in the midst of a big shift in its business model. Whereas for most of its history selling its streaming boxes has been its core revenue stream, it’s recently added a platform licensing business, but that’s not actually where its new revenue streams are coming from. Rather, it licenses its platform very cheaply and monetizes usage by taking a cut of certain subscriptions sold through its platform and serving up ads. It’s the latter which is a surprisingly important part of its business model (though there have been signs of this shift) and which is a major focus of much of the text in the S-1 filing. Last year, this advertising and subscription revenue share was nearly $50 million out of its $400 million in total revenue, and half of its platform revenue, and that accounted for essentially all of its growth in 2016. In that sense, though Roku on paper looks like principally a hardware company, it’s in some ways more like a Facebook or a Google – a company that collects millions of data points on its customers (18TB of uncompressed data per day) and will use that to target advertising. In that sense, Roku is an unusual player in the streaming space, given how many modern streaming services eschew advertising, but sees itself as a key beneficiary of the move of TV advertising dollars from traditional channels to streaming. This is going to be a fascinating IPO to watch and I’ll have plenty more analysis on Roku in the next few days.
Apple Reportedly Looking to Take Over Hollywood Studio Property for Video Push (Sep 1, 2017)
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Spotify Reins in Original Video Push, Refocuses on Music-Related Content (Aug 31, 2017)
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Apple Reportedly At Odds with Movie Studios Over Pricing 4K Movies (Aug 29, 2017)
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Amazon Will Forgo Video Pilots and Commission More Series Directly (Aug 25, 2017)
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