The Bulletin Edition 15

From The Desk of

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Last week was quite the week with entertainment industry news popping up, the pandemic news continuing a background and sometimes foreground hum (however much you tune in) and then some real oddities, such as the GameStop saga and the rise of the “bored” and “activist” investors all fuelled up on Reddit sugar. I won’t go into detail but if you want a short rundown of what happened, CBC has a quick take on the weekly developments, that then continued to overspill to include other companies including Blackberry, AMC Theatres and Bed Bath & Beyond. One thing for sure is the actual trading wasn’t illegal, just that the “enabler” of the whole fiasco, being the app Robinhood, has simply made investing accessible to anyone who has a smartphone and a few dollars to spend (maybe I can get my teenage kids to switch from $14 bubble teas on DoorDash to buying stocks instead..)

In the entertainment world, financial results continued to stream out with end-of-year and end-of-quarter TV subscriber losses overshadowing any financial losses. It was a grim week indeed with Verizon FIOS losing 72,000 subscribers in Q4 2020, Comcast Xfinity losing 248,000 subscribers in the same quarter, AT&T losing 617,000 “Premium TV” subscribers and Sky (Comcast’s European Pay-TV provider) losing 56,000 subscribers (and $600m in revenues) during the whole of 2020. With additional predictions from Parks that 43% of U.S. broadband households with Pay-TV are likely to switch to 100% online TV in the next 12-months, it’s clear the streaming future is firmly on the horizon.

Well, that’s the grim news over with. The pendulum also swings the other way with consumers spending an additional $26.5 billion on digital home entertainment in 2020, up 21% from 2019. PVOD grew more than 40% in 2020 due to direct-to-PVOD movies coming out of Hollywood after bypassing closed cinemas. There will be continued losses in the old world though. The music industry saw the same thing from CD to MP3. Many companies stuck in the middle of the old and the new ended up shuttered, unable to stem the old model losses with the new model revenues.

And finally, last week I published in the Notes section the second of the 2-part “behind-the-scenes piece” on how I put together and write The Bulletin each week. Enjoy. There will be more articles in Notes but don’t forget to subscribe as Notes is separate from The Bulletin.

As ever, thank you all for your support and words of encouragement and I wish you all the success for your coming week [C]

The Weekly Dispatch

Apple

The Cupertino company reported impressive fiscal Q1 results earlier this week, setting a new milestone for quarterly revenue. Sales topped $100 billion for the first time, resulting in a gigantic $111 billion Q4 2020. Full 2020 year revenue neared $300 billion, with their services segment reaching a quarterly revenue record of $15.8 billion. Clearly, all the shuttered Apple stores around the world are not having any effect on Apple’s momentum. Key numbers included:

The global installed base of iPhones now stands at over 900 million
Other Apple hardware global base (Macbooks, iPads) is now at 650 million
600 million paid subscriptions, including Apple News, Fitness, Music and Apple TV.

Not so exclusive anymore

For some franchises (The Office, Friends), the war of being tugged between platforms is still a raw one but last week it was announced that “Modern Family” will be coming to Hulu and Peacock under a shared streaming deal. The 11-season library has found two welcoming homes with the entire series being available on each platform starting February 3rd. It’s an interesting move as one home is a subscription service and the other an ad-supported service. For ABC, it seems more of a great opportunity to continue riding the wave of the demand for popular and nostalgic TV rather than worrying if having the series on both will devalue the franchise. This is certainly a trend to keep an eye on.

Now Netflix has amassed 200m subscribers, it’s time for upgrades

Post coming out with their subscriber and revenue results two weeks ago, Netflix was dominant in the news again this week for upgrades and other features that the company hopes to use in order to keep the new subscribers

More content: With the success of Lupin (the drama that wracked up 70 million views in its first month), The Queen’s Gambit and Bridgerton, new content will be key to keeping subscribers hooked but so will interface, user experience and ease of finding content will be paramount to see any return on content costs. Content is great but if subscribers can’t find it or get frustrated with the user experience, it can be disastrous for even the most successful platforms.
Rolling out a linear service globally: Netflix is planning on expanding the linear service, tested in France, out globally. The “shuffle” feature acts like an old-school TV model showing a stream of back to back content on a loop that viewers can just randomly tune into.
Ads: Even though Netflix reiterated again that their service will NOT contain ads at any point in the future and neither is it even on the cards, I strongly believe that ads will not appear directly on “the service” but I would not be surprised if Netflix launches FAST channels on the AVOD platforms to promote their content and service. That way they can keep a premium SVOD platform while benefiting from ad revenue and exposure through other partners.
Sleep time function: Apparently Netflix has been testing a sleep timer function on Android that lets you choose a 15, 30 or 45 minute shutdown time after you start watching a TV series or a movie. This is meant to be more a reminder to those wanting to conserve data however on initial thoughts, I would welcome such an option for when I fall asleep 2 episodes in and then the service keeps playing episode after episode and I can never remember where I got up to.

Spotify

Spotify is another platform that now, with a healthy base of global users, is starting to experiment with feature upgrades:

Speech and background noise monitoring: As noted in this article from Music Business Worldwide, Spotify has filed a patent for a feature that will monitor speech, background noise (and I assume current playing history) and will cover a “method for processing a provided audio signal that includes speech content and background noise” and then “identifying playable content, based on the processed audio signal content.” It is already known that Spotify can easily assume the mood or activity of a user simply by knowing what music they are playing (upbeat, downbeat, nostalgic, party music etc) but by taking this to the next “emotional state” level I don’t want to have to think about how I feel before I put my AirPods in!
Audiobooks: Spotify has released nine new audiobooks on the service, perhaps paving the way to not only compete with Apple et al on podcasts but also Audible on audiobooks.

And to close this piece, Fast Company has a really interesting piece on the rise of movie-related podcasts and how “DVD Commentary” tracks should be made into Podcasts. The good old DVD used to come with a plethora of special features, extras and of course the Directors and Actors commentary, all of which seemed to have found themselves at the back of the digital closet. It is a great idea and could provide very relatable podcast companion content to films that are now seeing much success with new and younger audiences on streaming platforms.

Discussed

As always, Discussed covers a few notable topics that came up this week during my interactions on social media and in communication with colleagues that I think are worthy of sharing. The discussions are cross-industry but as you will find, we are all merging into this digital world now where retail, home, entertainment, fitness and travel are all starting to morph together. Hopefully, my notes and observations below will get you thinking and any additional contribution to the topics is always welcome so please get in touch.

“Pod-u-tainment” for everyone: In last weeks “Discussed,” I briefly touched on the rise of at-home fitness and in particular noted how out of home gyms could revitalize themselves into “work-out” pods, similar to that as what the Four Seasons hotel has accomplished with their partnership with Tonal. Local gyms can be icky places at best but hotel gyms are sometimes even worse. If you are a gym owner with floorspace, now could be the time to look at carving up your location into personal workout pods, that can be easily cleaned after a workout and can be booked via an app for a 1-hour session. It seems that even the hotel industry is looking at their room inventory as “pods” that can be re-purposed for more creative revenue-generating opportunities. Eater covered this week how some hotels are renting out their rooms as personal dining experiences for singles, families or couples, using the hotel’s restaurant facilities to deliver to the room door. With a maximum of 6 guests per room for a 90-minute dining experience, I would trade that up instead of a packed and noisy restaurant and perhaps a meal with a good hotel room view would be the new experience in dining!

Continuing the “pod” theme, Mark Wilson, writing for Fast Company, has a great 2-minute read covering a company called the “Vertical Entertainment Group,” that hopes to reinvent the live venue with audience pods, something I have discussed in previous editions of the Bulletin. I can’t help envisioning going to watch The Rolling Stones perform live, while sitting in a pod that reminds me of the hoverpods that are used by members of the Galactic and Imperial Senates during debates in the Senate Building Chamber in Star Wars.

Is YouTube positioning itself to be an OTT platform?: Some discussions came out this week online as to how YouTube is slowly moving towards what looks more like an OTT interface for the large screen TV, as opposed to just being a video rabbit-hole for mobile devices. A screenshot below clearly shows the menu sections getting smaller and smaller and starting to look like Netflix et al.

Also this week it was revealed that You Tube is trialling a “clipping” feature that will let users clip out a short section of a video that can then be repurposed on other short-form platforms such as TikTok and Twitch.

Can we mention post-COVID churn?: A year into the streaming revolution (as opposed to the streaming war) many paid services are looking ahead to 2021 being that of managing the new signups from 2021 and tackling user churn (when a user signs up, then cancels the service at a later date) Unlike traditional cable in the past, SVOD services are extremely easy to cancel. It wasn’t quite the same when you had to call your cable TV company, beg them to let you out of your 12-month contract and try to make your set-top box look pristine when you handed it back. Now with one click of a button, streaming services have lost a paying subscriber. Adapting to a “post-COVID OTT world” will be something all services will be focused hard on over the next 12-24 months.
“The Brits just upset everyone” in a live streaming row: My home country seems to be on a roll these past few months with Brexit, lockdowns, spats with Scotland, the weather and now this week news rumbled out that the UK collecting society, PRS for Music, is proposing a tariff for live-streamed concerts for small events that generate less than 500 pounds in revenue, with a fixed fee of 22.5 pounds, for events earning less than 250 pounds and 45 pounds for those earning between 251-500 pounds. With so many commercial locations shuttered in the UK, does an artist’s basement studio or bedroom now class as a live streaming venue, especially when such tariffs (and the role of the PRS for Music) is to collect for “public performance,” that being outside of someone’s personal dwelling. It reminds me of years ago when a music publisher wanted me to clear synch rights for lyrics on the screen when the lyrics were actually subtitles for the deaf and hard of hearing which was mandated by federal law. However, the publisher said, “yes but it’s really karaoke…”

On Point

70% - the percentage of Swedish households that watch streaming services on a daily basis (MediaVision)

$917 million - the amount AMC Theatres the world’s largest cinema chain, raised in new equity to weather itself through the pandemic (AMC)

23% - the percentage drop in revenue seen by premier league soccer clubs due to lack of broadcast revenues (Deloitte)

17% - the percentage of U.K. households that struggle to pay their monthly broadband fees, especially due to lockdowns and children learning from home (Citizens Advice)

80.7% - the percentage of music streamers in Mexico that use Spotify as their primary streaming service (The CIU)

$448 - the cost of a new 70-inch 4K Roku TV at Walmart for the Superbowl sale (Walmart)

83% - the percentage of UK households willing to watch free ad-supported streaming services (IAS)

90,000 sq. ft. - the size of the soundstage and original production facility Apple quietly acquired in New York for the Apple TV service (TheRealDeal)

33 million - the number of users subscribed to NBCU’s Peacock platform (Forbes)

Productivity

With virtually every human interaction revolving around either a message, a phone call or mostly Teams and Zoom meetings, it got to the point this week where I and my calendar had reached a peak of exasperation. I try to keep work and personal calendars (and email and project management systems) completely separate, on different platforms and apps, but scheduling is something that needs to be merged together otherwise double-booking becomes a hair-pulling exercise (I expect some laughs on that statement)

Work meetings, across multiple time zones, personal calls, family zoom meetings, kids’ appointments, kids’ schooling, doctor’s appointments; all these activities now occur online. So this week I started digging around to see if there was a better way to not just make my work calendar available for external clients and partners, but also roll in all my other personal/family calls and meetings.

Hey presto, I found Calendly to be the easiest to set up and the easiest to work with. Integrating all my calendars into one, anyone who wants to book a call can just choose a slot from my page and off we go. The meeting is set up automatically in my work or personal schedule. Simply life-changing! So if you want to book me for a chat, you can use my calendar avails page here.

Visual

Diversion

In this week’s short film above, we look at the rise of smart-carts and one more reason to say “move over Amazon.” With Japan home to over 55,000 convenience stores, 8,000 supermarkets and 127 million people, it’s proof to say that this country knows a thing or two about convenience shopping. As Amazon and many other retailers are introducing self-serve checkouts and also shopper personal scanning guns upon entry into the store, the smart card or basket looks to be the next development in the push to have the consumer wrap up their shopping in one swoop. Interesting to note, though, the rise of self-scan options hasn’t lessened the need for human-managed checkouts, however, the push for a fully automated store will give thought to how the role of the store employee will evolve once we move back to shopping on location. An additional point to note is that Japan has been facing a chronic labour shortage for many years, meaning more self-serve options do not necessarily mean an existing human workforce will be replaced.

And Finally

The role of humans in finding the next big music act

This week news came out that emerging artist platform and startup “Djooky,” launched a new feature called HitHunter, promising users cash prizes if they identify a potential hit song and artist. This consumer-driven A&R model revolves around up-voting and then rewards the winning artist with $10,000 in cash and a recording session at Capitol Studios. It’s certainly an interesting development and reminds me of previous user-voted projects and products that only come to light if the consumer upvotes (think of one of the first companies to do this back in the 2000s, being Threadless, an online t-shirt design competition)

Considering over the past 12-months other A&R spotting projects have appeared, albeit completely at the opposite end of the human spectrum (for instance using AI as a “Hit Potential Algorithm” that can listen to thousands of songs at a time) What will the future of A&R be?

Why I feel blessed to have worked with the iconic Sun Records

When I first started my career in the music business (back in 2000) after switching from the just doomed “dotcom” rush that fell just as quickly as it stood up, little would I know of the relationship that would evolve when I was introduced to the late Shelby Singleton and John Singleton, owners of the legendary Sun Records studio, located in Tennessee. I worked with John and Shelby and their iconic branding for more than seven years, re-mastering their classic recordings, and then distributing them on CD all across North America. One such CD release is the opposite.

The Singletons purchased Sun Records from founder Sam Philips back in 1969 and this small studio became to encompass and develop some of the most legendary musicians of our time, including Johnny Cash, Jerry Lee Lewis, Carl Perkins, Roy Orbison and of course Elvis Presley.

This week it was announced that Primary Wave has acquired Sun Records master recordings, music publishing, the iconic Sun Records logo and Nashville’s Sun Diner. The deal is estimated to have been about $30 million.

I was happy to read that John Singleton will remain at the label and the Primary Wave acquisition will pave the way for additional recourse and capital to continue the Sun Records legacy.

Congratulations John, it was always a pleasure working with you and hopefully, we will work together again soon.

It’s all about the kids

I have covered the kid’s entertainment sector in previous editions of The Bulletin however, with the rise of lockdowns, children stuck at home, the added effect of at-home schooling and the explosion of online tutoring, has resulted in many gaming and entertainment platforms positioning their offerings towards that of “learning and socializing.”

The past 12-months have been pivotal to not only get young device owners even more hooked to the screen (depending on how you see it) but as a hopeful upside, the interaction and content they are consuming to be more educational in purpose, than simply passing the time and staying off boredom and lack of social interaction.

David Kleeman, SVP of global trends at Dubit said this week:

“Kids are moving the natural behaviors of hanging out and playing together online,” says Kleeman. “They can attend a concert and do things like walking into a virtual shopping mall. What they really want is a social experience. The standard activities in kids’ lives, like talking about their favorite games with other kids, are taking place on these platforms.”

Kleeman then went onto say that platforms such as Roblox, Fornite and other open-world games have given kids destinations for engagement with their peers (and strangers) in what he called “digital loitering,” a phrase that I find fascinating.

“From creating their own identities by changing their avatar’s clothes and accessories, to building new content—including tribute titles for their favorite brands, fan videos and playthroughs of the games they’re playing everyday—kids want to be makers, and they are turning to video games to do it.”

At the same time, the rise of social platforms, open-world gaming and even the increase in YouTube viewing by the younger demographic have created a battleground amongst the streaming video services who are eager to still attract young eyeballs to “just watch the screen” as opposed to wanting constant interaction.

At the same time, it is easy to think that every household with children has iPads, a Playstation and devices at every corner, however, Brian Steinberg, writing for Variety, published a very insightful piece this week, on how even though the big streaming platforms are fighting for the younger audience, this push that results in children’s programming to only be accessible on paid streaming platforms, is causing a big economic inequality division at the same time.

This concludes this week’s edition of The Bulletin. If you would like further details on anything mentioned or have questions or suggestions that you would like to discuss on email or to schedule a call, please drop me a note.

Cheers and thank you for your support and I wish you all the success for your coming week.