Also has tremendous expertise in technology. That’s a number growing by 6-8 million per year. I’m going to call it choose your adventure. It becomes very tough to say, “How are you going to go to market and, say, pay even another $5?”. Today, every studio is part of a much larger enterprise. I think there are a number of people in the marketplace who have said that Disney would be better off just selling their content to Netflix, and of course there are going to be many consumers who sit back and they say, “I kind of preferred when I could see Black Panther on Netflix and now you’re saying I have to go pay for it on Disney.”. I found it pretty surprising that their first opportunity to really show off with their video product was a few months ago at their video-centric release. Actually, I think I’m going to do video gaming. You hear this a lot from people who work in media. The reason why you have five-and-a-half hours a day of video — which seems impossible — is the fact that much of that is multitasking. And going for the second-best-selling novel of all time and trying to do something new and ambitious is an incredible pathway to that.”. They took everyone’s great content, and even mediocre content, and said, “We’re going to make something new with this.”. Firstly, the product and technology experience is highly critical. The standard AT&T argument has been, “We have HBO. They have a stunning brand. And he just fastidiously combed through it and published all of them in one day. And then, a few weeks passed and I think he had rediscovered the blog and I had written another eight pieces. Right? Point taken. We know that in the United States, there are 28 million homes that have Hulu. Every weekend, hundreds of headlines are written about the latest box office blockbuster or bomb. An aggregated bundle of all genres, all styles, that is intended to deliver to audiences for multiple hours per day of usage. But that’s the point. Everyone else, question mark. They’ve had to go from 15 percent penetration — the early adopters who usually have lower standards are more willing to try things — to an excess of 50 percent penetration in the US. Then you have those who have been first to market, such as Netflix. For the first eighty years of television, a company launched a video network to collect a share of the video pie. Analyst Matthew Ball sits down with Recode’s Peter Kafka to discuss how the coronavirus is changing the landscape on how SVOD’s are currently conducting business, why Hollywood is choosing to delay some big feature releases, and how the video game industry is thriving. Why are we going to do this? Yeah, so there were two stories in the last couple days about this. Once you look at those default subscriptions, the free services like Apple, like Amazon, the effectively free services like a Netflix, the guaranteed services, or at least very compelling services like Netflix, you start to get into a world in which you are spending $20-30 getting a tremendous amount of content. What Jason is talking about is the stuff that you wrote for him and still write for him is the stuff that Bob Iger, the CEO of Disney, finds incredibly valuable. I’ll give you the longer answer, or rather the shorter version of said long answer. You’ve read his stuff, he isn’t who he seems to be, you should talk to him.”. It doesn’t matter whether it was this year or last year or even 2021. Nov 12. I detected this. Yeah, that’s true. Now we call it AT&T/WarnerMedia. A preliminary page for Parler has come back online, but the full app hasn’t returned. So you take a look at the past six years, Netflix has effectively grown its pricing by 60 percent. You think creatively in a different way. “Hey, we’ve got to talk about this,” yeah. Frequently when someone writes about ... Oh, everyone’s ... There’s a Disney service and a Warner service and Amazon, etc. Sprint bundles Hulu. Peter Kafka: This is Recode Media. But maybe you do, who knows. I do take it seriously, and I think to some extent, that focus does explain why the company has been so resilient. The fact that HBO’s average quality of programming is very different, it’s higher, it’s more elevated, it’s more aspirational. They’re trying to build up additional businesses? You don’t have to worry about this being theoretical. And then I’m confused, because you wrote for Jason, you still write for Jason, even though you won’t write for me, bothersome. And so I’ve been helping them as they start to think through those products. With David Fincher and Kevin Spacey and it looks like it could be an HBO show. Amazon is “guaranteed” to be one of them, he says. The tweetstorms get longer and longer, and then you retweet yourself, periodically. 1/ Every new year tends to be seen as the one where Netflix will start to feel Big Media fight back 2019 looks right! Yeah. In the broadcast era, networks didn’t charge consumers to watch their content. A Satirical Essay for Recode/Vox: 10 lessons for all the streamers trying to take down Netflix This is great. But if it’s great, then all of a sudden you’re flying a little too high. Once it was possible to distribute content everywhere and at no cost, for example, the print industry’s subscription and advertising revenues imploded. Yeah. But so, Jason doesn’t know the names of this random blogger, let alone this double hyphenated, weird name. We spent a while shifting away from this model – to the point in which companies focused exclusively on consumer spend, such as HBO, emerged. Where you say, “well, if we make our stuff more interactive, thus we’ll compete more with Netflix.” That’s just saying one of the things our customers might want to do is interact with our video. They also now own Hulu. You’re not feeling awesome. Many consumers hate the idea that film studios seem to exist only to produce merchandise, sequels and branding partnerships – but this trend is the inevitable result of a history of thin margins, shallow balance sheets, and small, unpredictable profits. Not only does this mean it can withstand failure, but its parent can now recoup this investment across everything from theme parks, consumer products, broadcast and cable television networks, and consumer hardware and/or telecoms service. But what’s important is even more academic – if media matters to consumers, but they won’t spend a lot on it, the efficient use of content is actually to drive other industries, categories and products that have better (and bigger) economics. I think the point is, one of the interesting elements about how you look at video — and I think this explains a lot of what Apple is doing and why — is, Jeff, in the early years talked a lot about the Amazon flywheel, the Prime flywheel. So, I was told very clearly, “You have to stop this. Instead, they were in the business of charging advertisers for the right to their viewer’s attention. Anything that consumers want to consume in massive volumes is going to just, through tonnage, be expensive. That goes away. I think that might not be allowed. In this Twitter thread Kenan Malik offers a persuasive case against the term “white privilege”. Yeah, I think so, and we’ve already seen numerous examples of that. Their catalog is believed to have shrunk by anywhere from 40 percent to 60 percent. It is about how you package or go to market. You have a ... You do these tweetstorms and then you also do actual written copy. By clamping down on DC rioters, Airbnb is finally acting like it owns the place. Today, 200MM iOS devices are sold per year in the United States, so at least 75MM homes will get Apple TV+ Originals (an Apple Prime bundle will grow this even higher). So this isn’t just a matter of ESPN saying, “Well look, if we’re going to do this, we’ve got to hire whoever works at Twitch,” or, “We’ve got to go hire the Fortnite team. I think that’s right. In 2017, legendary music producer and Apple Music executive Jimmy Iovine even boasted to Billboard that “[independent] streaming services have a bad situation, there’s no margins, they’re not making any money… Amazon sells Prime; Apple sells telephones and iPads; Spotify, they’re going to have to figure out a way to get that audience to buy something else.” To point, Spotify, the only at-scale pureplay music service and the overall market leader, has a 25% gross margin (and royalty agreements cap margins at 30%) and a negative 2% profit margin. One is, as with the Netflix pieces, it’s a frustration with a narrative that I think is wrong and I have the selfishness to want to correct it. Well, first job out of B school, which is ... I’m Canadian. The question is not necessarily, “Is this going to be engaging, is the technology too early, is it just hitting the right demo?” It’s going to take some time for the new creatives to emerge, to want to play with these tools, to see whether Bandersnatch works, how it does, what the limitations are. This sum sounds like a lot, but it’s surprisingly low given the supposed scarcity of human attention and intensity of competition for it, not to mention the total volume of TV consumption (6B people watching two and a half hours per day, with the wealthiest 300MM averaging more than five). But what’s critical about that is, even when you think about Disney’s advantage, if you say that Disney is this example of “content is king,” many of the advantages that I just mentioned aren’t really about content. Got blown up 500 times bigger, and so forth. And we have the capital, we have the talent, the tech, and the reach.” That was an incredibly large purview and that’s just exciting. They call it something branched storytelling. Since 2013, Spotify ARPU has fallen from $9.61 to $5.61 – a clear reflection of overall willingness to pay. Well, guess what? access to 40MM tracks with no ads and unlimited play time) is an incredible value given the average listener spends nearly 90 hours a month on the service. What is the thing ... And you’re always telling people what they don’t understand about Netflix. That’s the question. No, no. It was going to Google in 2004. We have all this other stuff we put out through Turner. The impulse kind of comes from one of three areas. You also have the fact that Gartner has said that Amazon Video is now essentially neck and neck with iTunes, both domestically and abroad, in digital video downloads. And this was really, as part of a big process at Amazon — which at the time was still very small, I think they had 100 employees at the studio, they were only in four countries. Amazon has said that Prime is in 100 million homes. Cable television, for example, required the coaxial cable to be buried across the country and regularly repaired and installed. They’re a famous studio behind films such as Despicable Me, Minions, Secret Life of Pets comes out shortly. And so broadly, right, the idea is Amazon sells subscriptions to other people’s stuff through Amazon. Yeah, and sometimes they get offended by it, too. And if you have a guaranteed business model – say, selling another iPhone, Showtime subscription, ad impression, datapoint, or two-year wireless subscriptions – there are incentives to maximize your userbase (more people you can upsell to) and the amortization of fixed costs (the higher your unit contribution). The budgets reportedly went up by several fold. Next. Now, from the outside, it looks like that era is over and what they want to do is big swings, a Lord of the Rings prequel, everything has to be bigger, bigger, bigger, bigger audiences. And then, you do that for X amount of time. Very different format, very different monetization. They know that their brand can attract top-tier creators, and so the idea that they can take some of their cash reserves, put out about a dozen or a half-dozen TV shows per year, and use that to become an anchor asset around that video content, is a very plausible strategy. You’re trained to a different feedback loop. Previous. Next. Written By Matthew Ball. But it’s not a direct sort of, “We’re going to compete with Fortnite by doing X.”. Pay-TV is the best example. After a long, arduous day of staring at your computer screen at work, sometimes nothing feels better than staring at your computer screen at home. It’s not about maximizing the share of a consumer’s video time or video spend or video data, but monopolizing a consumer’s free time, spend, and data. It is not going to drive first-time Prime subscribers in Malaysia, in India, in Brazil. So, they’re bringing a fundamentally better consumer value proposition to a market that will bundle all the best content in the world, and is fundamentally about asking audiences to take existing spend, and not make room in their lives for more spend, for another video service, but instead to just change the channel, from Walmart to Best Buy, or iOS or Disney. However, the most instructive example of the value-spend disconnect is likely print. 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