The Bulletin Edition 9
From The Desk of
This week, it seemed as though every time I looked down at my phone my Yahoo stocks app had flashed an alert saying “Roku stock reaches all-time high.” I probably counted 15 alerts no less. The notifications faded towards the end of the week, as many investors decided to cash in early to reap some of their Roku winnings.
Apple reminded us this week that they are not an affordable electronics company by launching the AirPods Max headphones at $549 US dollars. I must admit they are quite the design however, as many commented (in less polite terms than me) the carrying case left me scratching my head as to what it reminded me of. I’ve never purchased anything from Apple on the day (or even year) of release. I still happily tap away writing this bulletin on a 2012 MacBook Air that cost me $1000 (back in the day) and then an additional $24 on a new charger last year and $65 on a new battery (that I installed myself using YouTube videos) A yearly amortization of $136 isn’t something to be sniffed at, so I do stand behind the sturdiness of their products, although I am back to wired headphones as I have lost an AirPod three times now.
This week was also one of many firsts. I recorded and co-hosted my first podcast (details to be revealed soon) and more importantly, the UK, my home country, was the first in the world to administer the COVID vaccine to lucky 90-year old Margaret Keenan. Next in line for the jab was 81-year old William Shakespeare who probably wondered what all the fuss was about. I did read some comments that Ms Keenan was patient “1A” and was Mr Shakespeare “2B or not 2B?”
Sticking to the topic of my home country, if the pandemic hasn’t made a meal out of things, Brexit certainly will. It seems the likelihood of the UK coming out of this geopolitical divorce without a deal is unfortunately on the horizon, with European countries joining forces and digging their heels in over the UK unreasonable trade demands. I am sure many of my fellow “Brits” would rather go into 2021 with a little more foresight and a lot less uncertainty. I think we have all had enough of that this year.
However, as many organizations and individuals are desperately straining their necks to see into the future as to what will happen in 2021, it is in fact, the best time to look backwards, to reflect and rebuild existing business models (or even yourself and your career) to make them better and more resilient than before. I am confident that this will be one of the many lessons of 2020 and will allow us all to continue into this decade better prepared.
I have also been thinking about the direction of The Bulletin for 2021 by jotting down a few ideas and mulling over some very useful comments from readers. A premium edition once a month? Premium content or podcast? All ideas are being noted.
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 goes all out
With the recent drama surrounding Warner Bros. announcement that they will bypass the theatrical window for all 17 films scheduled for cinema release in 2021 and instead put them on HBO Max, this week it was the turn of Disney to be in the crosshairs of Hollywood as they unveiled their plans during Thursdays investors day gathering. Luckily for the cinema industry, Disney didn’t choose exactly the same path as Warner Bros however, is quite the turnaround considering how the pandemic has ravaged Disneys theme park business with a $2.4 billion loss and 32,000 layoffs.
During the four hour presentation, Disney doubled down on its commitment to streaming, announcing that they plan to have a whopping 260 million subscribers to Disney+ by 2024 (also when it plans to become profitable) and a total spread objective of 300-350 million subscribers by 2024 (Disney+ with 230-260 million, Hulu with 50-60 million, ESPN+ with 20-30 million)
One thing is for sure, with their growth targets spread across many owned services, Disney could be on its way to being a real competitor to Netflix, whose single offering service is seeing growth starting to slow. Netflix is also trying to focus on pulling in new subscribers with localized content (at a huge cost vs return) versus the globally recognized franchises that Disney owns.
As it stands right now - Disney’s current subscriber count across all its offerings are as follows: 137 million subscribers as of December 2 2020, across all platforms (Disney+ with 86.8 million, Hulu with 38.8 million, and ESPN+ with 11.5 million)
The box office - Disney has no plans to follow the Warner Bros plan of pulling out of cinema route and will continue to plan to release future titles in the cinemas but would have a strategic approach which could see windowing from theatrical to then Disney+ or simultaneous release. Theatrical was a $13 billion revenue stream for Disney last year. They are not planning on giving that up (much to the cinema industry’s relief)
New content - Disney announced 10 new Marvel and Star Wars series and 15 new Disney live-action features for its Plus service. In total Disney pledges to spend between $14 and $16 billion in new content across all its D2C divisions.
Price hike - Disney will increase the price of its Plus streaming service in Europe from EUR 7 to EUR 9 a month. In the U.S. the monthly price will increase to $8 in March 2021.
Star - Disney will expand its Asia-Pay TV network called Star to Europe and Canada in February and LATM in June. Existing Disney+ subscribers will now have access to Star within the Disney app and Star will focus on more adult-focused content across many genres (watch out Netflix)
Hulu - Hulu will remain a U.S. only streaming service (with Star being the international "equivalent”) A slew of new content was announced including a new series starring the Kardashian family to be released in 2021.
How the market reacted - Disneys shares rose as much as 4.7% to $162 in extended trading on Thursdays announcement, with Friday’s numbers seeing the stock rising 14% to an all-time high of $176.
Sony to buy Crunchyroll
With AT&T’s hands full managing its own HBO Max service, this week it was announced that Sony has agreed to buy AT&Ts owned streaming service Crunchyroll for $1.175 billion. Not often coming up in analysts reports covering Netflix et al, Crunchyroll is somewhat of a niche outsider, focusing on anime and manga. But don’t let the word “niche” fool you though. Crunchyroll is not a hobby platform or a “nice to have” streaming service. With over 3 million on-demand paying subscribers and over 90 million registered users, the service is a must-have for the genre’s fans, consuming their way through over 1,000 anime shows, East Asian dramas and countless manga titles.
It’s all about the kids
Keeping an eye on what kids are watching across so many platforms is always an ongoing challenge for parents. Age rated guidelines are one thing however, many movie and TV show topics and themes stretch well beyond just that of an age stamp. Even for me, there is a huge difference between content that is suitable for a 12-year old to content that is suitable for a 14-year old. The same could be said for ages 8 and 11. Netflix has announced that it will be rolling out a watch guide app and platform integrated service.
“The Kids Activity report” will be like an integrated Netflix own version of websites like Common Sense Media, however, will not community-driven or offer reviews or ratings from parents. The attractiveness of such a feature will mean that parents won’t have to sit and watch the same content their children are watching to make sure the content is suitable. Parents will also be able to easily track current and past viewing habits of their children. During this work from home pandemic, this could bring parents a sigh of relief that little Johnny isn’t up to no good on the basement television.
The Focus
The rise of free streaming services has been greater this year than ever before, with home-bound consumers hungry for budget-conscious options, especially with no sports on cable TV and a percentage of households cutting the cord. In the past, it was either the platform offering free content (such as Roku channels) or individual streaming apps that offered a free ad-supported on-demand offering or FAST channel (free ad-supported television) with the hope that a viewer will grow tired of the ads and will pay a monthly fee to go ad-free.
Over the past few months there has been a noticeable shift in the free space, with many well-known subscription services stepping back into the free space, not to offer a “light version” of their SVOD service with the hope of some ad revenue, but to use free as a promotional tool to entice viewers to then pick up their paid service.
Relying on only on ad revenue to power your streaming service can come at a price, especially during this year when ad spend plummeted from March onwards but then streaming time rose, leaving many ad-supported services bleeding cash on operational costs due to high viewing but no incoming ad revenue.
This week, a slew of paid platforms back-stepped and launched free services, clearly putting the FVOD and FAST model as an upsell to getting that viewer to hand over their credit card details.
Redbox announced the launch of Redbox free on demand, an ad-supported streaming video service featuring movies and TV series curated for Redbox kiosk-centric consumers.
The Hallmark Channel announced a free streaming service on Xumo called “Hallmark Movies & More,” hosting a line up of 120 titles from the company’s archive of original content. The goal is to then promote their paid Hallmark branded standalone streaming service.
Showtime launched “Showtime Selects,” a free ad-supported channel on their Pluto TV channel.
AMC plans to launch two ad-supported outlets on Samsung TV Plus, giving viewers single episodes of popular series such as The Walking Dead.
Roku has launched a series of free collections from standalone streaming services on their Roku Channel. Viewers can watch content for free from Showtime, Sundance Now, AcornTV, UMC and Starz and then decide if they want to sign up to the standalone service of each, paying a monthly subscription.
On Point
35% - percentage increase of November consumer video game spending (NDP Group)
80 years - the age Harrison Ford will be when the final instalment of the Indiana Jones franchise is released in two years time (Lucasfilm)
70,000 - number of hours of content the average UK SVOD household has access to (Ampere Analysis)
26 million - number of signups at the end of November for NBCUniversals ad-supported streaming service Peacock (NBCUniversal)
25% - percentage of UK tech companies who fear they will not survive a no-deal Brexit (Tech London Advocates)
5th - upcoming season number of The Handmaids Tale series, that has been renewed by Hulu (Disney)
$30 billion - amount the live concert industry will have lost due to the pandemic (Pollstar)
47% - percentage of U.S. broadband homes that subscribe to Amazon Prime Video (Parks Associates)
1.5x - playback speed increase functionality reportedly being tested by Netflix (Forbes)
1.6 million - number of PPV buys of the Tyson vs. Jones Jr. boxing match (Triller)
Read Elsewhere
“Consumers have complained bitterly over the years about traditional “bundled” cable and satellite packages, where they paid a monthly subscription for 100s of channels when they only ever watched a handful. Now many would welcome a return to that aggregation to find all of the content they want to watch in one place at a single price. Direct-to-consumer is the name of the current internet game and that can mean cutting out the middle man of the traditional broadcaster or cable operator.”
Productivity
If you had asked me five months ago whether I would want to dash off to the airport, stand in line with other people, wait at the gate and then sit in a long metal tube in close proximity to strangers for a few hours I would have stopped you at just the thought of taking an Uber to the airport. Despite having not set foot on a plane since February (and not seeing my family in the UK since August 2019) I was quite happy to stave off any type of travelling (unless solo in a car) until at least August 2021.
Now that there is hope with the vaccine and seemingly more and more knowledge about the pandemic and how the virus travels, I must admit that I am starting to get rather excited about the thought of jetting off to another city or country again. However, that said, my travel preferences will be rolled out in stages or “duration blocks,” starting with a small, managed and controlled trip before I decide to go all-in on a transatlantic voyage across the other (half) side of the world.
Mark Izatt, a friend based in London, recently wrote a very fitting piece for the British Airways High Life magazine, exploring the delights and productive benefits of a “one-day commute” that comes with being able to take off from your home city in the morning, fly somewhere else and return the same day in the evening without the need for a hotel stay. Those lucky Europeans have so many options on their map for such a trip however in North America we do as well. I have regularly flown on day trips to New York City and experienced not only the productivity of good meetings but also the joys of “one bag travel” with no need for overnight items (I do pack a toothbrush just in case)
With this in mind, I am already scoffing at my multi-day oversized suitcase that is still gathering dust in my closet and am now penning a list of day-trip packing items that will allow me to breeze through security and customs (with a mask of course) and return later that evening to sleep in my own bed (sorry hotels, I’m not ready for you yet)
Diversion
Ah the dot-com era of the late 1990s and it’s premature doom in 2001. I was living and working in London at the time, at a rather smart digital agency called “Red Hot Chilli.” Investor cash was flowing and existing new developments in the world of mobile and web were pushing every bank, financial company, mortgage broker, real estate agency, newspaper and even a vacuum cleaner retailer up against our door to have just “anything digital” built for them.
The consumer (who only had 56k modems at the time and barely 3G cellphone service) and the investors really had no idea what this “new frontier” of technology was but during a three year period of uncertainly, bold investments were made and many companies went public with wild valuations. Of course, we all know how it ended and by 2021, the walls came crashing down and we all became historical remnants of, what was an exciting but premature tech boom.
This week had a slight deja-vu feeling of those days, as Wall Street went IPO wild over the Wednesday public trading debut of DoorDash, the US meal delivery service, peaking at a market value of $60 billion dollars. The shares later closed up 86 per cent to $189.51, above the initial public offering. Of course, a company like DoorDash has seen a huge demand for its services this year during the pandemic when restaurants have been shuttered but still struggled to serve up meal delivery versions of their dine-in experiences, and hungry consumers were confined at home. So what happens in the next 12-24 months, now that we have a vaccine rollout plan and there are already signs of the upward recovery in 2021?
I say this because the very next day, Airbnb, that has suffered immensely during the travel lockdown (although not as bad as the hotel chains), priced its own initial public offering at $68 a share, after a previous $50-$60 target and again the market frenzy continued and by the end of the days trading Airbnb was worth almost $100 billion dollars.
Something seems amiss here to me. The value of DoorDash surged due to the demand and success during COVID and the confidence that consumers will still be at home, unwilling to cook and would rather order in. Whereas, on news of the vaccine and the gradual rebuilding of the travel industry so that consumers could gingerly tiptoe out of their homes and onto planes again, caused Airbnb’s valuation to soar. One thing for sure is that unpredictability causes investors to make bold decisions, hedging their bets on a less than predictable outcome. It really is “any player can win” at this poker table of hot IPO offerings.
This week’s diversion takes a deeper look at how Airbnb managed to drag itself through the pandemic and drastically turned its business around, closing off 2020 with an IPO and perhaps a 2021 year of recovery.
One To Read
In edition 7 of The Bulletin I commented on how the writing of my daily to-do list went well with my morning coffee until I opened up my inbox and then the barrage of emails lit a match under set my planned out day. Many readers wrote to me agreeing in unity with my analogy.
This weeks read, “The Checklist Manifesto - How To Get Things Right,” does away with the to-do list and looks at the importance of the humble and ordinary checklist and the surprising power it holds.
A thoroughly enjoyable read, Atul Gawandes book rang true with me this week during the implementation of a new project management system that will take hundreds of to-do lists, spreadsheets and emails and combine them all into a step by step process. Prior to making a checklist blueprint for this new system, it seemed as though every project had different steps all happening at different times, thus making the entire project more complicated than it actually was. After listing each step, from product idea through to launch, I realized that almost 60% of the projects had exactly the same steps. Not a life-threatening situation but a very good explainer on the difference between a to-do list and a checklist.
The Checklist Manifesto travels far and wide covering surgeons to pilots, engineers to astronauts, demonstrating that the checklist has become a critical tool to combat what is the fallibility of the human memory and attention span, especially when it comes to mundane or repetitive tasks. Regardless of the skill of a surgeon or the experience of a pilot, the decisions they both need to make in life-threatening situations cannot be relied on by an app or a to-do list. There is a reason why pilots and surgeons check and double-check very specific actions when preparing the plane for departure or the patient for heart surgery. Skipping a step, shortcutting or forgetting has resulted in many tragedies.
Visual Insight
Holiday spending used to be about cramming yourself into a mall or dashing around last-minute trying to find that one last gift for the Auntie you always forget. Now both the retailer and the consumer can offer and buy everything online from physical goods to streaming services that tout hefty discounts for annual subscription sign-ups. There is no doubt that all national and international Holidays around the globe are big business for consumer spending. This week, Visual Insight takes us on a global tour of the most important (and profitable) Holidays of the year.
Source: The Visual Capitalist
And Finally
Popular apps and streaming services converge
This week it was announced that the popular meditation app Headspace has a three-series deal lined up with Netflix, with the first series, “The Headspace Guide to Meditation,” launching on the streaming platform on January 1st. The second series “The Headspace Guide to Sleep” will have an interactive experience and will be available later in 2021.
This isn’t the first time a meditation of wellness app has partnered with a streaming service. The Calm app launched their own series in October on HBO Max and now with well-known celebrity names flocking to podcasts and streaming channels with their own shows, perhaps apps will have some more limelight in their own branded original series. It did happen to Angry Birds, after all, however, there may be room for more creative pairings. A Zoom version of “The Office” anyone? Or a Tinder branded dating reality TV show? (the editor says no thank you)
Legendary musicians are cashing in their chips and not everyone’s happy
In last weeks’ edition of The Bulletin the news that singer Stevie Nicks was selling a majority stage of her song catalog for $100 million was covered in On Point. This week news came out that Bob Dylan had sold his entire songwriting catalog of more than 600 songs to Universal Music. After a career spanning 58 years, it suffices to say that perhaps Bob wanted to cash out, relax a little and maybe do away with any “rights fights” once he’s gone. The Dylan/UMG deal is rumoured to be worth in the region of $300 million.
There has been a rise in artists or songwriters with deep catalogs either cashing out entirely or selling off a portion of their music rights to investment funds and labels for an upfront payment on future royalties. The ability for a song catalog like Dylans to earn ongoing royalties is infinite, therefore predictions can be made of the future annual royalty value and the artist can either sell based on future return or almost remortgage or upfront the future royalties now as a one-time lump sum. If you are a retired musician or any owner of high-value intellectual property, such a move is attractive.
Although, to my surprise, not everybody was happy with Dylan’s move, with much grumbling appearing in as a warning if more artists to do the same. It seems as though legacy artists with careers spanning decades benefited better financially during years of touring, radio plays, cassette, CD and Vinyl sales than today’s artists who have to wrack up millions of streams to return any sustainable level of income at all. Arlo Eenemark, writing for The Industry Observer explores the uproar in more detail.
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.