Then Again...
TDG's Weekly News Wrap & Commentary
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Netflix releases Q3 ’19 financials
Précis
—Netflix
narrowly missed
its subscriber forecast in Q3, adding 500,000 in the US (vs. 800,000 forecast) and 6.3 million internationally (vs. 6.2 million forecast). Investors were pleased that Q2 didn’t repeat itself, but the company warned of challenges ahead.
TDG—Netflix is still spinning new SVOD competition as a “modest" short-term distraction versus a legitimate threat to its subscriber base. So, who’s the real enemy? Linear TV, so claims CEO Reed Hastings. That may be true, but to miscalculate the threat of Disney+ to its domestic subscriber base, in particular, is a bit naïve.
As more consumers sign up for more SVOD services, they will approach a point beyond which adding additional services becomes a zero-sum game—that is, adding a new service will likely mean cancelling another. Netflix hopes to be a foundational service in this mix, more sticky than other apps and thus less likely to be dropped once these ceilings are reached. Yes, it has a good chance of becoming such a bedrock service in the consumer SVOD mix, but that becomes much more difficult without killer third-party franchises like
Friends
.
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CBS All Access won’t ever be a huge success, but that’s by design
Précis—
CBS All Access has more the four million subscribers, and the company expects that, in combination with Showtime, the two services will account for 20 million subs by 2022. Marc DeBevoise, president and chief operating officer at CBS Interactive, noted that All Access
would not get so big
that it overtook CBS’s broadcast network, meaning that the lion’s share of new DTC additions will be shouldered by Showtime.
TDG—Keeping a tight lid on its new DTC service is also a strategy NBC is employing. It is promising that its Peacock DTC service will be built up only to the extent that it doesn’t threaten linear viewing. (Pay-TV operators have expressed concerns that adding Peacock to their set-top box app stores could unfortunately have that effect.)
Walking this fine line is a huge challenge, and unfortunately no one, not even the studios, know where this line will ultimately be drawn. Their rosy subscriber forecasts may suggest everything is under control, but that's a facade hiding genuine uncertainty about how to best balance the two in practice.
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Game changer…not!
AMC Entertainment Launches a Branded TVOD Service
Précis
– The theater chain launched
AMC Theaters On Demand
, a transactional video-on-demand (TVOD) service, providing an OTT platform through which AMC Stubs members can rent or buy shows and moviesafter their theatrical runs. Disney, Warner Bros., Universal, Sony, and Paramount have made deals with AMC for catalog and new-release movies to be available through the new service, with pricing between $3 to $5.99 to rent and $9.99 to $19.99 to buy.
TDG – Where have these people been for the last 12 years? Big theater chains had ample opportunity to define (if not control) a large swath of the streaming video space. Like Blockbuster, they could have been a contender, but chose to complain about disruption instead of wrest control of it. This move to TVOD is too little too late for the theater chain, with most transactional streaming revenue now owned by tech-media firms like Amazon, Google, and Apple.
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Recent & Upcoming Reports
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Cogitations
"The greatest wealth is to live content with little, for there is never want where the mind is satisfied."
Lucretius
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