The Bulletin Edition 17
From The Desk of
I thought this week’s photo would be apt. It’s quite incredible what some fresh air, warm sun, a sumptuous, yet light, continental breakfast and the gentle sound of the lapping waves can do for one’s health. Of course, many of these can be created anywhere, even in the comfort of my own home (while it’s snowing outside) yet I am very lightly optimistic about sitting on the Croisette in Cannes at this year’s MIPCOM event in October. If it is delayed, then I will recreate this scene as my conference booth and will welcome industry friends and partners remotely.
Another busy week in the industry and in the global news. The BBC News has been banned in China, Amsterdam shot past London to become the main financial trading capital of Europe (on trade volume) Bitcoin soared in value after Telsa announced it will not only invest in Bitcoin but will also accept the currency for the purchase of its cars. Continuing the transport theme, it was announced this week that flying taxis will be here with us in five years’ time.
Meanwhile, closer to home, I upgraded my television this week after indicating in the past few issues of The Bulletin that larger screen TVs are in hot demand simply because of lockdowns and the fact that the cost to purchase is considerably cheap (with hardware and TVoS companies linking up to sell the units at a loss) It was a long time coming as my TV set was a 2013 edition and although there wasn’t anything wrong with it, I did fancy something with Bluetooth (to make use of my noise-cancelling headphones that haven’t seen the inside of an airplane in nearly a year)
I spent an hour this week trying to connect the headphones up to a “Samsung TV” however then found out that I actually owned an LG TV with no Bluetooth and it was my neighbour who has a Samsung TV. Time to upgrade and with a swift click of a mouse, “Out for Delivery” flashed up on my phone. And what an upgrade it was. “The Night Manager” TV series on Amazon Video has been keeping me company (for the second time and I highly recommend the series) and I’m already off thinking of isolated Greek islands, the Swiss Alps and not too much action.
To close, I apologize for the tardiness and lack of updates on the “Notes” section of this website, as I have been working on an “Industry Guide” which was requested by a reader and taken on board as being something that could indeed be very useful to you all. So until the guide is published, the Notes section will be taking a breather. Stay tuned and stay curious.
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
Disney Earnings
The house of mouse released its Q4 2020 earnings this week. With one foot firmly planted in the world of streaming and other ragged limbs dotted about in pandemic-stricken sectors such as theme parks, cruises and vacations, it was an earnings call that would be poured over by analysts for the rest of the week.
Highlights:
Reached 95 million subscribers on the Disney+ service, compared to 50 million back in April 2020.
The total subscriber base including Disney+ now stands at 146 million (including Hulu at 39.4 million and ESPN Plus at 12 million subs)
ARPU fell from $5.56 to $4.03, a decline attributed to bundling the plus service with Hotstar in India.
Diluted earnings of 32 cents per share beating analysts’ predictions of a loss.
Total quarter revenue was $16.25 billion for the quarter, down some 22% compared to the same period in 2019.
No plans to develop a PVOD strategy with notable upcoming films such as Black Widow, continuing the path to a theatrical release. Disney said they have no plans to bypass the theatrical window.
Editors note:
The decline of Disney’s Plus subscriber ARPU (average revenue per user) is not an isolated situation and is very much the dynamics of launching a streaming service in higher price tiered markets first and then rolling the service out to lower-priced markets, which of course if all the users are put together in one basket the ARPU will dilute. Netflix experienced the same situation during their previous earnings and it’s a matter of basic math and averages. If you have 10 million paying subs in the U.S. each spending $10 a month on your service and then you launch in LATAM or India where the price per month is $1-$3 per month and you haul in another 10 million subs, of course, your avg rev per user will go down. The pendulum can swing though as emerging markets such as India and Latin America dwarf higher price centric markets such as the U.S. and Europe so at some point, you will reach the top of the curve as saturation is reached in developing markets and increased sub growth upticks in developing markets. The growth of Disney+ is quite astounding though, as it has been able to establish itself as a major player against Netflix in under a year. Profitability isn’t targeted to reach until 2024, however, the analysts should look further than ARPU as a weather vane for a global streaming services success.
Tubi Integrates Live News Channels
Free ad-support streaming service Tubi announced this week that it will be adding more live news channels to its “News on Tubi” existing offering with the addition of nearly 80 live, local news feeds from stations around the U.S.
Having already launched with national news offerings from the likes of FOX, NewsNOW, Bloomberg TV, Bloomberg Quicktake, NBC News NOW, CBC, PeopleTV, WeatherNation, fubo Sports, Black News Channel and Euronews, Tubi will now focus on bringing local news to the lineup. With this addition, Tubi subscribers will now have access to almost 100 local stations covering 58 markets.
There is no doubt that local news was starting to suffer pre-pandemic, especially due to cord-cutting and the rise of OTT platforms, however over the past 11 months, local news has become important in consumers’ lives again especially covering the pandemic and the election. Aside from sports, local news was also one of the last remaining gatekeepers for cable networks to keep subscribers paying, so hauling news onto streaming platforms is a logical step to ensure that streaming platforms become the one-stop-shop for viewers when they switch on their TVs.
Only time will tell on whether news channels tied to a specific cable network will benefit from going all out and syndicating across all streaming platforms. Again it’s the one foot in the old model that keeps paying the bills, and the new streaming model that, especially for ad-revenue, is still not quite there yet.
For Tubi itself, the statistics that 200 million U.S. consumers are using AVOD services each month is a gold bounty indeed, however, the AVOD space is already rather crowded and with no subscription model, the consumer is a scattered and fickle one, quite happy to hop around from one free service to another. The other elephant in the room is YouTube, as covered in last week’s edition of The Bulletin, which is starting to look more and more like an OTT streaming-service every day. Could YouTube just launch their own AVOD service with movies and have all that existing UGC content as well? It may serve them well to ditch YouTube TV and turn it into an AVOD service.
HBO Max Goes Global
HBO Max will launch globally in June 2021, putting its foot down in 39 countries in Latin America. The global rollout will continue with HBO-branded services already in Europe being sent for a rebrand to HBO Max later this year. In the U.S., the HBO Go app will be phased out and will be replaced with the HBO Max app.
Netflix puts down roots in Canada and Italy
According to Netflix, the streaming company will make big strides to set up digs in both Canada and Italy this year, highlighting the companies commitment to hiring dedicated domestic teams to focus on each market and to work directly with the creative communities in each country. Since 2017. Netflix has spent more than $2.5 billion on productions in Canada. Across the pond in Italy, Netflix will be opening up a Rome based office, hiring over 40 staff, and will be focusing on local original series with the goal of doubling existing outputs by 2022.
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.
A new industry news channel from Bloomberg will be called “Streamberg”: A thread on Linkedin this week quickly escalated into the realities of working in the streaming industry but never having time to actually watch something on a streaming service. “We should just create a news channel like Bloomberg, but about the streaming industry.” And so “Streamberg” was born. Any takers?
Everything will be OTT: Gaming, music, movies, TV shows, sports, wellness, lifestyle even communication. Everything will and is shifting towards the OTT model. Shopping online is already morphing into a video with the fashion industry producing video catwalk shows where orders can be done in parallel on an app. Poshmark, I predict will start having more video “presentations” of their products on a big screen as “Live Commerce” using the app as a companion purchasing device. Zoom and Teams are already tinkering around with bringing video conferencing to your Smart TV.
Every brand will need to hire an entertainment industry expert: With the dramatic shift and permanent placement of entertainment in consumers lives, on their devices and in their routines, every serious consumer brand will need to hire a team of industry experts to bridge the gap between brand, product and the entertainment industry. From music and film to television, UGC and gaming, having resources internally who are connected to all the key stakeholders (studios, music labels, rights holders, streaming platforms, production facilities and content creators) will be key for any brand wanting to take their products and growth to the next level. It’s already happening. Fitness brands are hiring music industry deal makers, children toy brands are hiring animation and production experts, fashion wants to be on OTT platforms, food and wellness companies want to link up with your Spotify playlist and to your connected TV.
Online learning is not just for kids: As much as we have many hurdles to get over to ensure adequate online and at-home learning for schools in many countries around the world, the online learning industry is booming like never before. Access to courses, knowledge hacks and micro-learning are fuelling a new rise in creator revenue streams with writers, accountants, florists, artists, programmers and social media experts all finding a global audience willing to subscribe to their online courses. Adult learning will be an enormous growth category in the future. It’s never too late to learn new skills or to teach others.
55% of U.S. pay-TV homes keep cable just for the sports: Post SuperBowl and for the lack of spectator sports games, this statistic is quite an intense reality for traditional TV.
What do you do when you just sold all your content to Netflix?: Paramount seems to be facing this very question on planning to launch Paramount+ launching March 4th. With much of their catalogue already under license to now competing services, it will be interesting to see how they manage to edge their way, and relevance, into an already very busy, and expensive to operate, marketplace. As one analyst put it this week “They sold everything to Netflix,” said Wedbush Securities media analyst Michael Pachter. “They got addicted to the earnings stream.”
Spotify goes fully remote, will this extend to hiring as well?: Last year a number of large tech companies announced they were going fully remote. Some announced they would eventually require all staff back at the office. Then we had the hybrid model idea. Now 11 months on, this week Spotify and Salesforce unveiled work from home options for all their employees. Spotify's “Working from Anywhere” program, will let employees choose where they want to work, either full time at home or a hybrid model. The company will also allow employees to work in the city or the country of their choice. This really is an interesting move as potentially this could extend to hiring as well. I am sure a number of employees with dual nationalities or families in different cities or countries will welcome such a move and it will be interesting to see if other companies in the entertainment space follow suit.
Take the streaming service quiz!: A touch of light humour for the end of this section. This week a “test your streaming service knowledge” quiz came out. Just how many services do you know and are some real or fake?
On Point
42% - the percentage increase of US consumer spending on gaming in January 2021, reaching $4.71 billion (NPD)
$545 million - the amount of revenue CBS generated from NFL Superbowl advertising spent last Sunday (a record) (Kantar)
24% - the percentage of U.S. homes that are planning a broadband upgrade in 2021 (Parks)
179 million - number of smart homes in Europe and U.S. by 2024 (Berg)
5 seconds - the amount of time a Netflix subscriber watches a film or show before deciding whether to continue watching to look for something else (Netflix)
60% - the percentage Universal Music Group is looking to spin-off from its corporate ownership when it plans to go public this year (Vivendi)
11 billion euros - VOD revenues in Europe for 2020 (includes SVOD) A 30-fold increase over the last 10 years (EAO)
51% - the percentage increase in consumer broadband traffic in 2020 (OpenVault)
500GB - the average household broadband usage in Q4 2020 (OBVI)
62% - the percentage of the music community that is experiencing financial difficulty (Musicares)
Quote
“Honestly, it’s been a bit surprising to me that it seems like all entertainment companies have to do is put a plus sign in front of their name, have an investor event and the stock rallies right up”
Alexia Quadrani, a media analyst at JP Morgan in the piece “Trading Places: Why Legacy Media Giants Are Suddenly Acting Like Tech Companies”
One To Read
The “One To Read” section has been skipped the last few weeks mainly because I haven’t come across books worth recommending. Aside from the books that now are seemingly out of date and irrelevant (apologies to authors who toiled on them pre-pandemic), many others have taken to predict, anticipate and expertly gauge the next century of our lives, all with themes of “may happen, might happen and could happen.” There is certainly a place for this type of thought leadership however, with everything changing so fast, this topic should be actively discussed rather than printed in stone (or on paper)
“Company of One” is this week’s One To Read and I highly recommend picking up (or downloading) a copy. Regardless of if you are working in a global corporation, a small startup or a solo worker, Paul Jarvis’ book has much guidance for everyone. Leveraging the idea that with everyone working from home, we are all in effect now a company of one, the author explores the traditional business approach of throwing more investment, resources and technology at any problem that comes along, rather than change methods, introduce new systems and make do with what you already have. In this current climate of every company monitoring operational expenses and overheads, the company of one approach delves deep into having the ability to pivot, the speed and the ability to control, being simplistic (especially in meetings!) and how “getting big” shouldn’t be the end goal.
Productivity
Much to the anguish of some of my colleagues, industry partners and even clients, I am always looking at better ways to organize schedules, notes and action points from meetings (all of which are of course happening remotely)
This week I came across the meeting organizer app Fellow that syncs with your office or personal calendars and then creates a dashboard where each meeting can be shared with those attending. Then you have the agenda all in one place, can add action points and accountabilities collaboratively in real-time during the meeting and when the meeting is finished, all the attendees receive a copy of the meeting summary and all previous meetings with notes are archived in one accessible place. Fellow is certainly an interesting app however, I would like the ability to add multiple calendars together in one place which doesn’t seem to be an option, but for companies who are struggling with not having any time post-meeting to catch up and delegate, Fellow could be a very useful tool.
Diversion
With company canteens shuttered and your favourite office area salad bar hopefully not boarded up, the future of the “office lunch” remains a precarious one. Even in France this week there was much talk about the demise of the “office lunch hour” after the French Labor Ministry announced that the ingrained cultural habit of leaving the office for lunch and dining out, will be replaced with workers being allowed to eat at their desks (a practice that was previously forbidden in France yet with COVID the switch is designed to prevent the virus spread)
Doordash announced this week that they have acquired vending machine company “Chowbotics,” a food-tech company that uses robots to make salads inside a vending machine. The growth idea would be that more food groups could be added to such a model. I must admit I am not quite sure what to make of it but the immediate image that came to mind was waiting for your passport photo to be processed in the train station machines, with whirring and clanking going on for 5 minutes until your photos dropped down into the little tray.
Visual Insight
And Finally
Financial Times Spring Festival
Every week I receive at least one email to attend a new online industry conference. However, it is a challenge to block out three days of my schedule when I am not actually travelling to a conference and am remaining in the same place I have been for the past 11 months. When I used to physically attend a conference, my calendar was set to out of the office and the assumption was that you just wouldn’t be available for work meetings and emails may be responded to “when I get to them, depending on what time zone I am in.” So many industry conferences have come and gone and I’ve felt some level of “conference mourning.”
So with the week out of the question, I was quite delighted to see The Financial Times coming out with a FTWeekend Spring Digital Festival. With 100 speakers, 60 sessions to choose from at my leisure, a live performance by the London Symphony Orchestra and an online wine tasting event, I’ll be quite happy to dip in and out of this free online festival all weekend.
Are you part of The Clubhouse?
When a partner in London announced a few weeks ago that he had received an invite to “The Clubhouse” I wondered what all the fuss was about. I also wondered if this was a new exclusive club, with shiny doors, a warm fireplace in the lobby, a coat check and a whiskey lounge. It all sounded too good to be true. Private clubs are open again? Alas, it was not to be. Clubhouse is an app that has received a fair amount of coverage these past few weeks, not only because this week it was banned in China but because of the possibility you might end up talking to someone famous.
In short, Clubhouse is an invite-only, social networking app that is a conference call meets a house party. It is an audio-only chat app. From what I’ve read, the app isn’t a civilized cup of tea or an afternoon glass of wine in a wingback chair. Clubhouse is more akin to entering a room when everyone present is already shouting at each other. Rafqa Touma, writing for The Guardian, provides a good overview of this new app. Take it for a spin if you must, and if you can get an invite (and at your own peril!)
Another week, another Zoom situation
A number of you wrote to me last week commenting on my mention of the English parish meeting Zoom meeting that descended into chaos (you can watch the video and learn more about the story here if you missed it) So this week I couldn’t resist rounding off this edition of The Bulletin with another dose of “Zoom antics.” Similar to the story that came out in March 2020, when a company director managed to turn herself into a potato, this week the internet erupted with glee when a lawyer attending a hearing at a Judicial Court appeared on Zoom with a cat filter that he was unable to switch off.
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.