The Bulletin Edition 20
From The Desk of
As friends and industry colleagues on the west coast swelter under the “Pacific heat dome,” my London crowd flips from rainy, cold weather to the occasional glimpse of sunshine that sees everyone dash outside for ten minutes of vitamin D before the heavens open again. Here on the East coast, the heat has settled in at a seasonal 35 degrees and for many of us still working from home, the luxury of air conditioning (and then sometimes an accompanying sweater) is not a luxury to be sniffed at. How long will work from home last? I heard today that last summer 50% of the U.S. population (who could work from home) were working from home. This week that number is down to less than 30%. For many of us, the office still beckons.
The last issue of The Bulletin was published just under four months ago and since then, the streaming and subscription space has hummed along with new announcements, new services, plenty of metrics, and lots of industry chatter online. I decided to take a break from the weekly publication not only due to increasing project files piling up on my desk but also because reporting weekly was becoming almost “the 80/20 rule” resulting in very little time for me to peer at the industry tea leaves and the wider implications of the industry trends. It also gave me no time to write additional content, which was very much on my to-do list and now will be a bigger focus of this publication. From now on The Bulletin will be published at regular intervals vs each week but will be surrounded by additional posts and resources.
A podcast this week reminded me that taking a break is good and that “the creation of ideas never happens while you are staring at a computer screen or battling with formulas in Excel. Ideas come to fruition when you are actually doing nothing, or being idle, such as going for a walk, standing in the shower, or lying in bed for an hour each morning just thinking.”
To announce my return and this new edition covering June, I also published “Industry News Resources” this week. It’s a handy guide to many of the key online news publications covering the entertainment space. I have also added in some of my own personal favorites, along with recommended daily news and podcasts. Let me know what you think and please share. As always, The Bulletin serves to save you from having to comb through 65 websites daily, but it never hurts to wander off the path and find your own sources of information too.
I have also been thinking of travel, conferences, meeting friends and acquaintances in person. For so long it was “will travel return?” “will we return to the cinema?” “will we ever go back to the office?” The tone over the last few months as the vaccination program rolls out in many countries around the world, has moved to “when will we be able to travel? “when will I want to go back to the cinema?” “when can I go back to the office?” If any of the latter leaves you slightly anxious about stepping back out into society, the astronaut Douglas Wheelock spent five months on the International Space Station before coming back to Earth. In this article from Fast Company, he puts together some tips for us all “re-entering the atmosphere” to some level of normality.
As ever, thank you all for your support and words of encouragement and I wish you all the success for your coming weeks and months ahead. Good luck! [C]
The Dispatch
Streaming services start feeling the weight from local regulators
Under plans to be announced soon, OFCOM, the UK broadcast regulator, will apply the same regulatory rules to Netflix, Disney, and Amazon that are applied to traditional UK broadcasters such as the BBC and ITV. Such plans would extend OFCOMs powers to act in areas such as impartiality, fairness, and harm and offense. They could also extend to requiring the streaming services to report on demographics and usage. At present Netflix is only regulated in the Netherlands, its European headquarters.
Meanwhile, in France, Netflix, Amazon, and Disney, will soon have to invest between 20%-25% of their local revenues in French content under a new decree that was just unveiled by the French government following an 18-month process.
Nielsen launches a new measurement service
The measurement and analytics company has announced the launch of The Gauge, a new tool designed to track audience metrics for streaming services as well as television audience viewership rates. The new service will show the total usage of TV for broadcast, streaming, cable, and other formats including gaming, VOD, and physical products (DVD/BluRay)
What’s most interesting is Nielsen claims to be able to identify which services are the most popular and which content is the most popular, metrics which always raise eyebrows considering that most, if not all streaming platforms do not publicly share such data. Even the “most popular” swimlane on Netflix is met with some caution, as Marianne Garvey, writing for CNN, discusses in “The Netflix trending list is an algorithmic mystery.” Can we even rely on the “Popular Right Now” feature on streaming services?
Netflix launches a branded merchandize store
The streaming giant has launched an online shop, netflix.shop, selling branded merchandise from hit shows such as “Stranger Things” and “Lupin.” At present, collaborations from the anime series “Yasuke” and “Eden” are on sale in the USA only, however, the company plans on expanding to other original series plus global shipping capabilities. With the value of Netflix's originals IP, launching their own branded merchandise not only provides them with some level of muscle in the existing world of counterfeit products but also puts them in line to compete with Disney product lines.
Time is running out for Apple TV trials
The full-time bell may have been rung. As of this week, Apple will no longer offer a free year of their Apple TV+ service with hardware purchases from its stores. Any new purchase will come with a 3-month trial. The year-long offer drew some glances last year, especially considering Apple's weaker content offering and seemingly lack of focus on the streaming front in the face of rivals such as Amazon and Netflix. The year-long free trials from 2019/2020 will also face decision time this week, with existing trial subscribers either canceling or being automatically billed for a new subscription.
YouTube Theatre comes to life
YouTube has partnered with Hollywood Park, a 300-acre sports and entertainment destination, in an extensive multi-year agreement that names the development’s 6,000-seat performance venue, “YouTube Theater.” The deal is the first for YouTube, with plans for the venue to host a variety of live in-person events from concerts to comedy and award shows, esports competitions, community events, conferences, and YouTube creator events. With the number of YouTube influencers vlogging daily on the platform and many with millions of global followers, a creator-themed event where fans get to meet their influencer heroes in person and the event can be simultaneously streamed across the platform is a logical but brilliant idea.
“YouTube Theater will drive the uniqueness of YouTube by combining physical, “in-real-life” events that bring creators and fans together, while simultaneously sharing that same event experience with our two billion global monthly users through live streams and VOD content,” YouTube vice president of brand marketing Angela Courtin said in a statement. The first official event is planned for mid-summer 2021.
Amazon snaps up MGM
Big news in June was the announcement that Amazon will buy MGM Studios for the princely sum of $8.45 billion. After more than six months of negotiations between the two parties, there is no doubt that Amazon intends to use this mammoth acquisition (4,000+ titles) to strengthen its attack against the likes of Netflix and Disney, and such catalog could plug any gaps Amazon is finding in their difficulty to produce enough original content to satisfy their subscribers. A few weeks post announcement and the anti-trust claims are already swirling with Sen. Warren already asking the FTC to conduct “a broad and meticulous” review of the Amazon-MGM deal. Whether the MGM catalog could be seen as having enough value to prop up an antitrust and competitive advantage claim remains to be seen. Alex Alben, writing for the Seattle Times, explores whether the deal will sail through or whether such antitrust claims even have merit.
TCL launches Roku TVs in the UK
It’s still surprising that Roku is still relatively unknown in the UK and Europe. I ordered a Roku streaming stick for my parents in the UK and the rest of the family had no idea what “Roku” was, all owning an Amazon Fire TV device. Roku has been dipping its toes slowly into the UK and European waters over the past two years but has just announced that the first series of Roku TVs, in partnership with TCL will roll out very soon in the UK. The native 4K RP620K models will be available in 43, 50, 55, and 65-inch screen sizes, while the HD RS520K range will be available in 32 and 40-inch sizes.
HBO Max goes big
HBO Max has launched in 39 new territories covering Latin America and the Caribbean. This is the first time the service has been available outside of the U.S. To entice new subscribers, HBO is offering a 50% discount window up until July 31st. Existing U.S. subscribers on the service will now be able to access HBO Max while travelling in the new distribution territories. HBO has firmly committed itself to produce local originals in Latin America over a 2 year period.
Discussed
As always, Discussed covers a few notable topics that came up this month during my interactions on social media and in communication with colleagues and industry contacts 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.
Pop-up streaming channels: It’s been quite the month for sports with hockey on one side of the world and soccer (football to my British friends) on the other. It was interesting to see the rise of pop-up streaming channels appear just to serve an event like the Euro Cup, which only existed for a short period of time. Building an app takes time and hoping to gain subscription revenue for an event that has such a short window doesn’t make sense, however, launching a FAST channel for global sports and cultural events that are only active for a couple of weeks or a month (such as Wimbledon) could be a new hyper-niche model. Once events come back in full, I expect to see many more including Sundance, Glastonbury, SXSW, Cinco De Mayo, Art Basel, the possibilities are endless for event-driven themed channels.
When your entire product is turned into a feature by your competitors: Clubhouse isn’t having a good time right now. App downloads have plummeted and what seemed like a great idea at the time, has now all been copied by the likes of Facebook and Spotify who have both added “audio room” features to their existing platforms, both of which have mammoth existing user bases. It’s always an innovator and startup’s dilemma, especially when any new social communication tool that exists as a single platform can be monitored and then easily copied by platforms with the largest user bases on the planet.
Would Netflix really introduce an ad model?: This topic has been around the block more times over the past 12 months than ever before. Points of “Netflix only having one revenue stream,” and “what happens when they reach saturation point in the USA?” or “how do they increase revenues aside from continually raising the subscription price?” Reed Hastings has continually said “no no no” to advertising, however, investors will be looking at other hybrid services that off an ad-supported and ad-free premium to compare growth and revenue projections vs cost of content. NScreenMedia wrote an article recently covering this very discussion but pushed it further to see how many Netflix subscribers would take a discount on the monthly subscription fee in return for ads. Surprisingly almost half (46%) said they would take ads. Now of course these surveys can always be analyzed and firstly how many of the subscribers have actively used an AVOD service? I know for one, going from Netflix with no ads, to an AVOD platform where there are 4 prerolls, then 2 ads every 10 minutes is certainly not enough for me to want a discount off my monthly Netflix subscription.
Content is now a global market: A good reminder in this article, that the world of content buying and selling is now truly global. Aside from the domestic TV market, which around the world is shrinking, we have gone from segmented rights carved up into territories and then a multitude of platforms and windows (plus holdbacks) to a new content market that is truly global where all programming to maximize reach and ROI needs and can be available on a global basis, typically on streaming platforms that are also global. To add to this, Vuulr launched a very interesting project last month, “The Reel Price Index” which takes you through a series of questions on what you believe the relative value of content should be in various markets and scenarios. I encourage you to take it for a spin.
A Predictive Paywall: An article popped up on my radar this week (and of course has now disappeared behind a paywall) announcing that The Globe & Mail, a Canadian national newspaper, has developed an internal AI-based solution that predicts when a potential reader is likely to convert to a paid subscriber. Typically most online newspapers will either limit you to certain articles for free or give you a certain number of free articles a month before you have to pay to gain full access. This predictive paywall approach is really quite interesting and got me thinking about the wider possibilities to use such a model in streaming (and of course any other type of subscription services) Could AI be developed to know just exactly when to convert you from an ad-supported model to an ad-free paid model, or a free trial to fully paid? Could the service analyze what you are watching and catch you off guard when you are supposedly in a good mood and feeling generous just because you watched an uplifting comedy for the 19th time? Could AI predict when you are really hooked on that new binge-worthy series to throw up a box asking for your credit card details just before the real killer is revealed? Certainly food for thought!
Streaming bundles with physical goods: I knew it would be only a matter of time before streaming services, especially niche ones, would be bundled with physical product subscriptions or especially magazines. Last month, the outdoor sports magazine Outside launched a bundle containing a subscription to their Outside TV and also the Outside magazine. Soon they will go one step further and include a physical product component into a more premium bundle, with a subscription to "Cairn," an outdoor gear “surprise” box subscription company. With the multitude of sports, cooking, lifestyle, kids, and genre-based streaming platforms out there, partnering with other subscription services that also target the same demographic could be a win-win for the entire audience.
Why haven’t FAST services taken off in Europe like in the U.S?: A very valid question and this article from Video Week should get some heads nodding as to the differences in market and consumer dynamics when comparing the success of FAST in the U.S to the somewhat damped uptake to free ad-supported streaming TV in Europe. A number of good points including the cost comparison of linear services in the U.S compared to Europe and in countries like the U.K. and others, the domestic broadcasters free OTA channels. Well worth a read.
On Point
75% - the percentage of mobile users who stream TV content with the device on mute (DigiDay)
745 - the number of new streaming services that have launched in the past 48-months (Broadcast Now)
39% - the percentage of U.S. adults in TV households who stream TV every day (Leichtman Research Group)
67 million - the expected number of Netflix subscribers in Europe by end of 2021 (Trading Platforms)
54% - the percentage of OTT brands and services that plan on changing their business models this year to appeal to a wider range of viewers (Applicaster)
100 - the number of SVOD channels French media company Alchimie has launched (Alchimie)
46% - the percentage of U.S. households that now pay for four or more streaming services, up from 22% just a year ago (Parks Associates)
$1 billion - the estimated amount Roku will spend on original content in 2022 (CNBC)
82% - the percentage of US TV households that now have at least one internet-connected TV device (Leichtman Research Group)
6 months - the free trial length to Disney Plus that Amazon is offering its music unlimited subscribers (Amazon USA & Canada)
49% - the percentage of U.S adults who would choose an ad-supported version of full streaming platforms over a more expensive ad-free option (Morning Consult)
Wednesday - the day of the week Disney will now release all their new original series on their Plus streaming service (Disney)
$4.99 - the monthly budget subscription price of the new Paramount+ service (with ads) The ad-free version will be $9.99 (Paramount)
Quote
“I don’t think people want to talk to their TV. In cases where it’s faster and easier — search, for example — we make voice remotes. We focus on integrating voice into areas where it can really make a difference, like entering your password or your e-mail address or searching — those are things where it’s tedious to tap stuff out on your remote. But in other areas, like just scrolling up and down or the power button, it’s actually easier to use the remote.”
Roku CEO and founder Anthony Wood commenting on whether consumers will want to control their TVs via voice instead of using the remote (CNBC)
One To Read
If any of you have read “Outliers” by Malcolm Gladwell you will appreciate the narrative around behaviors, observation, and trends and how an “Outlier” can completely change, predict or create a pattern of such events when compared to a seemingly similar event. One of my favorites is “why are most professional NFL hockey players all born in the first few months of the year?” It seems that when the drafts happen, those players are already almost a year older than those born in the previous year and therefore are faster, stronger, and more likely to be picked.
Switch, this month's recommended read explores similar themes as Outliers, however, the book pours into how managers, coaches, professionals, and even parents can sometimes make just slight changes to a process or unite a group of people and create a completely different and positive outcome. Breaking down change into three basic areas, “Direct the Rider,” “Motivate the Elephant” and “Shape the Path,” Switch really is a blueprint book for changing outcomes in life, even when you don’t know what the change should be, you find resistance to change or you’re not quite sure what direction the change should. Highly recommended.
Productivity
During the past few months the usual daily question of “which platform is best for you: Zoom, Teams, Google?” has started to lose its spark, to the point where I find myself groaning quietly at my desk at the thought of picking up my headphones once again and staring not only at all the other faces in squares on the screen but by my own as well.
Zoom fatigue is real and I am already pining for in-person meetings to return. Until offices reopen (for full-time, hybrid or whatever suits you) and I can travel and attend conferences and see a bit of the world, there are still some old-fashioned fallback alternatives, such as the good old telephone call. Many partners and colleagues feel the same way and are quite happy to schedule an old-fashioned voice call while we both go on our morning, lunchtime or evening walks. And with the latest noise-canceling technology, no one is wiser if you are walking down a busy street or standing on the top of a mountain.
This great article from Wired puts it perfectly that unless you have to share a screen or present something, do you really need to turn the webcam on? Just pick up the phone instead.
Visual
(click for source)
Diversion
I couldn’t resist putting this video in as this edition’s diversion. With so much talk about not only a return to air travel but also fearing the dreaded back-to-the-office auto commute, the thought of a flying car to beat the traffic has been the stuff of technological inspiration for decades. Move over James Bond,
And Finally
Dark Patterns: What are they and how do they affect me?
Have you ever been on the product page of a website and a balloon or status is constantly claiming that there are “293 other people looking at this item” or “5 other people have this item in their cart right now?” The same is very common for travel websites, letting you know that apparently, 2,456 other people are booking this exact room for those very dates you have chosen.
Other scenarios are more direct, i.e letting you sign up for a paid subscription online but then making you call a telephone number to cancel (that just rings and rings) or a pop-up window appears on your screen with the “X” mysteriously located that clicking it enables a video-ad to load.
Welcome to “Dark Patterns,” an element of web design, and dubious user acquisition strategy that manipulates or acts in a heavy-handed way to force users to make certain choices, all while dressing these choices up as “personalization” when in fact they are really “tracking” and “targeting.” This somewhat alarming, yet insightful piece from Vox goes into detail on how to spot Dark Patterns and what you can do to avoid them.
The business of selling songs - How does it work and how do I sell?
Having spent half of my entertainment industry career in the music sector, the recent growth of artists, producers, writers, and other royalty-bearing recipients selling off all their rights or part of their future revenues to investment companies and larger labels have been very interesting to observe. Many well-known artists have sold off a piece of, or all of their catalogs including Bob Dyan, The Red Hot Chilli Peppers, David Guetta, and Stevie Nicks.
In short, if you receive recurring revenue from publishing or audio master royalties and can demonstrate such, then there will be someone out there willing to front a lump sum multiple in return for a % or all of your future revenues in perpetuity. Look at it as mortgaging your intellectual property. Most musicians can’t go to a bank and ask for a loan against their future income (especially during COVID times when touring has been closed down) so companies like Hipgnosis et al have spotted an opportunity and filled the gap.
Geoff Mayfield, writing for Variety, covers the current marketplace for songs very well in this piece. Having worked in this very area over the last 18 months, selling a song catalog or recurring music royalties can be a pandora’s box both for the seller and the agent.
Regardless of an artist or catalog owners popularity and implied value, there are some key points I recommend:
The catalog (or revenue stream) is only worth what someone will pay for it or what the market rate deems as the top end
If the catalog is less than 5 years old (or you can only show max 5 years revenue) it is less likely to have buyer interest
The longer the revenue historicals you can show, the easier it is to predict future revenues and then formulate a multiple
Un- monetized catalogs are very difficult to sell. Many catalogs sold well during the CD days but never did well on DSP’s (Spotify etc) I would advise reworking the catalog on digital platforms then look at reselling in a few years’ time.
Proof of ownership key. No investor will look at a catalog that doesn’t have a chain of title, copyrights, score sheets, publishing, and/or master ownership paperwork all in order. The music business used to run with agreements on the back of a napkin. Unless you can prove those napkin scribbles in court, all agreements need to be in place.
Proof of financials. Proving that your catalog or your intellectual property generated those past royalties is the golden ticket to any sale or % investment in future income. Unless you can provide line-by-line accounts and income statements, it could cost more in lawyer and accountant fees than the annual income of your catalog to get things in order.
Hire an expert - there are many resources out there to help in the preparation of music assets and catalogs for sale. A number of these are attached to agents or brokers who then link up with investors or buyers. Choose wisely.
iOS 15 Preview
After last month’s flurry of announcements at the Apple iOs 15 event (an 11-minute whiz through summary video can be watched here) the beta launch kicked off yesterday and The Verge has a good walkthrough of the new OS covering some pretty nifty new features.
This concludes this edition of The Bulletin. If you would like further details on anything mentioned or have questions or suggestions that you would like to discuss by 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 weeks ahead. Good luck!