Netflix Vows to Stay Ad-Free

Netflix July 17 put to rest speculation it plans to incorporate advertising into programming similar to what Hulu does.

With the SVOD pioneer spending billions annually on content, Wall Street analysts have suggested Netflix would roll out an ad-supported viewer option to generate incremental revenue to help pay for it.

CEO Reed Hastings put a halt to the scuttlebutt.

“We, like HBO, are advertising free,” Hastings wrote in the shareholder letter. “That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”

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Doc ‘Ring of Faith’ Due on DVD, VOD and EST July 23 From Virgil

The boxing documentary Ring of Faith, exploring faith’s role in boxing, is coming to DVD, VOD and EST July 23 from Virgil Films.

Featuring interviews with professional boxers (Paulie Malignaggi and two-time Welterweight World Champion Shawn Porter), religious leaders (including Vatican officials) and influencers in sports, Ring of Faith gives an in depth look at the impact that boxing has made on communities while looking at the way faith and religion have played roles in the sport and lives of the boxers.

Ring of Faith, which features actor/entertainment journalist Mario Lopez and boxing trainer/analyst Teddy Atlas, was recently nominated for a New York Emmy Award.

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Warner Releasing ‘Head Full of Honey’ Digitally

Warner Bros. Home Entertainment will release the family drama Head Full of Honey through digital retailers Aug. 20, and on demand through cable and satellite providers, and on select gaming consoles beginning Sept. 10.

Head Full of Honey stars Oscar nominee Nick Nolte as Amadeus, a recent widower whose strong personality, charm and sense of humor can no longer mask the life-altering onset of Alzheimer’s. When Amadeus expresses a deep desire to revisit the places of his fondest remaining memories, his granddaughter joins him on an unpredictable road trip to Italy that will transform not only their lives but the entire family.

The film also stars Matt Dillon, Emily Mortimer, Til Schweiger (who also co-wrote and directed the film) and Sophia Lane Nolte, making her feature film debut.

Head Full of Honey is based on the German film Honig im Kopf, written by Hilly Martinek and Schweiger and directed by Schweiger.

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Well Go USA Releasing ‘The Brink’ Aug. 20

Well Go USA Entertainment will release the Chinese action thriller The Brink on Blu-ray, DVD and digitally Aug. 20.

The first feature film from director Jonathan Li, The Brink stars Max Jin Zhang, Shawn Yue, Yue Wu and Janice Man.

The Brink deals with a renegade cop on a mission to bring a shady smuggler to justice by any means necessary. When his investigation leads to a Triad mob boss and global smuggling ring, his manhunt quickly turns from local misconduct into a violent international incident.

Bonus material includes a behind-the-scenes featurette.

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Netflix Q2 Sub Growth Stalls; Posts First Domestic Sub Loss

In a surprise, Netflix July 17 disclosed it added just 2.7 million subscribers in the second quarter, ended June 30. The sub growth was barely half the 5 million subscribers added in the previous-year period.

In the shareholder letter, CEO Reed Hastings said the service expects to grow its sub base by 7 million paid memberships in the current third quarter, more than the 6.1 million additions in Q3 a year ago.

But that can’t mask the fact Netflix lost 126,000 net domestic subs in Q2 after forecasting a gain of 300,000. It was the first domestic quarterly sub loss for the SVOD behemoth. International paid sub growth topped 2.8 million, down significantly from market projections around 4.7 million.

To jumpstart sub growth in India, Netflix is rolling out a lower-priced mobile-screen plan to complement existing plans in the region.

“We believe this plan, which will launch in Q3, will be an effective way to introduce a larger number of people in India to Netflix and to further expand our business in a market where pay-tv [average revenue per user] is low [below $5],” Hasting wrote. “We will continue to learn more after launch of this plan.”

The subscription streaming pioneer ended the period with 151.5 million global subscribers compared to 124.3 million during the previous period.

In the United States, the sub count stood at 61.1 million, down from 60.23 million in Q1, but up from nearly 56 million a year ago.

Internationally, subscribers tallied almost 91.5 million compared to 68.4 million last year and 88.6 million in Q1.

Netflix’s legacy by-mail disc rental service ended the quarter with more than 2.4 million subs, compared to 2.9 million last year. The packaged media segment continues to be profitable, generating more than $45.8 million in contribution profit on revenue of $76.2 million.

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Hastings said the missed sub growth was across all markets, but “slightly more” in regions where management initiated price increases.

“We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region),” Hasting wrote.

The Netflix co-founder attributed the growth miss to the quarter’s content slate and outsized sub growth in the first quarter.

“There may have been more pull-forward effect than we realized,” he wrote. “In prior quarters with over-forecasts, we’ve found that the underlying long-term growth was not affected and staying focused on the fundamentals of our business served us well.”

Wall Street might think otherwise. Netflix shares have plummeted more than 12% in after-market trading.

Cinedigm and Jungo TV Bow OTT Channels on Sinclair Broadcast Group’s Streaming Service

Cinedigm and Jungo TV July 17 announced the launch of their digital-first linear channels — Combat Go and Asian pop culture network Hallypop – on Sinclair Broadcast Group’s ad-supported streaming service, STIRR.

Combat Go and Hallypop are available now, joining Cinedigm networks CONtv and Dove Channel, which launched on STIRR earlier this year.

Combat Go offers curated content selected by martial arts experts, featuring original docuseries, fight events and martial arts movies.

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Through its partnership with FITE.tv, the network covers combat events from around the globe including MMA, Muay Thai, and kickboxing, and highlights promotions such as RIZIN, Kunlun Fights, and Ring of Honor.

The network recently announced a global content partnership with Black Belt Magazine, the top martial arts magazine.

Hallypop, in partnership with Korean media company SBS International, is features music, lifestyle and entertainment. Highlights include K-pop variety show Inkigayo, with appearances and performances by BTS, Big Bang, IKON, Girls Generation and more.

The STIRR app is accessible on iOS and Android devices, as well as Amazon Fire TV and Apple TV, and online at www.STIRR.com.

“Cinedigm is proud to further our partnership with the innovative STIRR platform, following the positive reception that CONtv and Dove Channel received earlier this year,” Erick Opeka, president of digital networks, said in a statement.

“Combat sports and K-Pop are the fastest growing entertainment verticals in the world and we are proud to be leading the industry in giving audiences access to some of the world’s greatest entertainment properties,” added George Chung, CEO of Jungo TV.

Nielsen: Media Choice Abounds, But Many Americans Stay With What They Know

NEWS ANALYSIS: One of the biggest challenges facing media consumers today is finding something to watch or listen to. Can that be right? After all, we live in a time where thousands of content choices are merely a click or swipe away.

As hard as it is to fathom, it’s not uncommon for scenarios of indecision to play out, but that’s because we spend quite a bit of time checking out previews, trailers, teasers, schedules and listings, yet struggle to land on something that actually engages us.

But this isn’t just tragic for consumers. It has just as much of a negative effect on content creators, programmers, platforms and marketers. After all, if their efforts fail, consumers spend more time searching and less time consuming.

So with so much choice available, how are modern consumers navigating the “paradox of choice” and deciding what to watch? Are they embracing subscription and on-demand services, or relying on traditional means like live scheduled programs and DVR?

Surprisingly, findings from the first-quarter Nielsen Total Audience Report suggest that it might be the latter, as streaming users tend to gravitate back toward their traditional TV preferences when they’re not sure what to watch. Still, seven in 10 homes have a subscription video on demand (SVOD) service and 72% use streaming-capable TV devices, putting the onus on streaming services to keep users engaged with the content on their increasingly accessible platforms.

When we look at video streamers, Americans are pretty focused. Notably, our MediaTech Trender survey found that on all of the occasions they stream TV or video, almost two-thirds of adults who stream video content are likely to watch when know exactly what they want. One-third will watch when they have a rough idea, and only 22% watch when they don’t know what they want before diving into the options.

For those who are still on the fence about what to watch, it gets a bit tricky when looking at how they make their choices.

 

The interesting thing about video streamers is that they’re frequent “go-backers.” Said differently, they like what they know and are comfortable with. In fact, 58% say they go back to their favorite traditional channels, 44% like to scan through traditional channel options, 39% scan the program listings and 31% browse their DVR recordings.

Comparatively, far fewer SVOD users scan their subscription content menus. That means SVOD content creators, programmers, platforms and marketers have some work to do in terms of giving viewers what they’re looking for. The data shows it. Only one-third of adult respondents say they browse their SVOD content menus for more content, while 21% say they would simply not watch anymore content altogether.

The Curious Case of the Core Demo

So which group is most susceptible to indecision? The group that marketers cover the most: the 18-49-year-olds.

Comparatively, younger adults are more likely to explore. They’ll flip through menus, check out programs that have been recommended for them and step outside their traditional content comfort zones. But they also tend to rely on another “extreme” route, as they reported to tune out all together at higher levels compared to other demos.

So how long do people dwell on their content options? On average, a notable 9.4 minutes was reported for adults 18-34 and 8.4 minutes for adults 35-49 who stream. Think about how much more engagement content providers and platforms could achieve if they took out the guesswork. And if they did that, they’d have better retention rates. That’s because nearly 30% of streaming adults 18-49 said they sometimes stop watching content if they can’t find something appealing.

Being inundated by choice is not particularly new to the world of content. Traditional television has faced similar issues for decades. But for the new players in the game, refining recommendations and creating menus and user experiences to better suit user tastes might be their best way to combat it.

CTA: Consumer Spending on Video Streaming Services Increasing 25% to $17.7 billion in 2019

The growing popularity of streaming services, artificial intelligence (AI)-enabled emerging devices and in-vehicle technology will help drive the U.S. consumer tech industry to a record-breaking $401 billion in retail revenue in 2019 — 2.2% growth year over year — according to new data from the Consumer Technology Association.

“Enthusiasm for AI-powered technologies is skyrocketing — more consumers are discovering for themselves how tech innovation can change their daily lives for the better,” Gary Shapiro, president and CEO of the organizer of the annual Consumer Electronics Show in Las Vegas. “And with 5G delivering the faster connectivity we’ll need for anytime/anywhere streaming, smarter home robotics and more advanced vehicles, consumer excitement will only grow.”

CTA’s biannual U.S. Consumer Technology Sales and Forecasts report reflects U.S. factory sales-to-dealers for 300+ consumer tech products and related software and services.

Emerging Technologies

Smart Home: Home safety and monitoring products are driving growth in the smart home category. CTA expects smart home sales – including Wi-Fi cameras, smart thermostats, smart smoke and carbon monoxide detectors, smart locks and doorbells, and smart switches, dimmers and outlets – to reach 28.6 million units (19% growth) and $4.5 billion (16% increase).

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Smart Speakers: After rapid adoption of AI-enabled, voice-controlled smart speakers including Amazon Echo and Google Home, and increased voice integration in other devices such as TVs, soundbars and smart home devices, smart speaker sales will level off in 2019. Smart speakers remain a category to watch, with an expected 35.2 million units sold (1% increase over last year) and $3 billion in revenue (1% decrease) in 2019.

Home Robots: Consumer enthusiasm for robots that perform chores such as vacuuming, lawn mowing and floor cleaning is driving another AI-enabled category seeing double digit year-over-year growth. CTA expects the category to sell 3.6 million units, a 12% annual increase, and earn $1.2 billion in revenue, a 19% jump.

Wireless Earbuds: Leading devices including Apple AirPods and Beats by Dre Powerbeats Pro are expected to sell nearly 16 million units in 2019 (up 45%) and approach $2 billion in revenue (a 46% increase). CTA projects double-digit growth for the category over the next few years, as consumers pick premium audio experiences featuring true wireless technology.

Smartwatches: As consumers gravitate toward premium smartwatches, revenue for the category is expected to increase 19% in 2019 to reach $5.4 billion. Smartwatches are expected to sell 20.1 million units, a 7% increase over last year – leading the wearables category.

“More than ever, consumers want premium technology experiences – especially within the smartphone, TV, laptop, smartwatch and wireless earbuds categories,” added Steve Koenig, VP of market research. “The lightning-fast pace of tech means we can upgrade our ‘everyday tech’ and get extraordinary experiences.”

Revenue Drivers

Smartphones: Now owned by 91% of U.S. households, smartphones have packed vital features into models at all price points. As a result, the replacement cycle is lengthening and smartphone units are expected to decline for the first time in 2019, reaching 165.5 million units (2% decrease) and earn $77.5 billion dollars in revenue (2% decrease) – the largest consumer tech category.

Looking ahead, 2019 marks the launch of the first 5G smartphones. This year, CTA expects the 5G-enabled devices to reach 2.1 million units sold and generate $1.9 billion in revenue.

Laptops: Driven by growing demand for cloud-based and convertible models, the U.S. laptop market will sell 51 million units, up 2% over 2018, and earn $32 billion in revenue (up 3%).

Televisions: After two years of record revenue and unit sales for the massive TV category, sales will start to taper off in 2019, as LCD shipments decline and upgrades from 4K Ultra High-Definition (4K UHD), 8K UHD and OLED sets grow. TVs remain the centerpiece technology in many American homes.

Overall, the total TV category will ship 38.8 million units in 2019 (1% increase) driving $21.4 billion in revenue (9% decrease) – following a better-than-expected year of sales in 2018. Upgrades will be driven by big screen models and sets featuring 4K UHD resolution and HDR technology. This year 4K UHD sets will account for 17 million units (7% increase) and almost $15 billion in revenue (9% decrease).

Looking ahead, inaugural shipments of 8K UHD TVs in 2019 will reach $734 million in revenue and 175,000 units. And the promising OLED market will surpass one million units this year (up 30% over 2018) with double-digit growth through CTA’s forecast horizon of 2023.

In-Vehicle Tech: Factory-installed, in-vehicle technology will see the largest revenue increase of any tech category in 2019 – increasing over $1 billion dollars year-over-year to reach $17.6 billion (8% increase over 2018). Advanced driver-assist safety features such as blind spot detection, adaptive cruise control, lane keeping assist and collision avoidance systems are driving sales of both factory-installed and aftermarket vehicle technology alike.

Software and Streaming Services — Music, Video and Gaming

Consumer spending on software and services (including music, video and gaming services) is projected to reach a new high of $75.6 billion in 2019 (a 14% growth over last year). Driving consumer demand are cloud-based subscription services supported across a range of devices.

Video: Live TV streaming and exclusive content through subscriptions will push consumer spending on video streaming services to $17.7 billion in 2019, up 25%.

Music: On-demand music services including Apple Music, Pandora and Spotify will cross $8 billion in revenue, up 33% as increased adoption of products such as wireless earbuds and smart speakers drive more music subscriptions.

Gaming: A revolutionary shift toward cloud-based streaming models, subscriptions and growing in-game purchases will push the gaming software and services category to $38.9 billion in revenue in 2019 – an 11% increase.

LAES/OTT_X Pool Party

Teaming the eighth annual Los Angeles Entertainment Summit (LAES) with  OTT_X, a new conference focused on the over-the-top market, was a winning formula for the Entertainment Merchants Association. Upwards of 400 people packed the Universal Hilton July 16 for the two events – a bigger crowd than organizers had expected.  A day of standing-room-only panels and workshops ended with a networking pool party; the conferences continue July 17.

Merchandising: The Magic Word is ‘Shazam!’

Retailers offered a couple of exclusives for Warner’s Shazam! upon its Blu-ray release July 16.

Best Buy had an exclusive 3D Blu-ray combo pack of Shazam! for $29.99, in addition to a 4K Ultra HD Blu-ray Steelbook for $34.99.

Walmart offered a $29.96 gift set of the Shazam! Blu-ray combo pack with a pack-on Funko Pocket Pop keychain of the main character. Walmart also sold a single-disc DVD version with just a single “Who Is Shazam?” featurette for $16.96, as opposed to the regularly available two-disc special-edition DVD with the full range of extras for $1 more everywhere else.

Target continued to offer 20% off movies on Blu-ray and DVD, excluding new releases, through July 20 via the Cartwheel coupon function on the Target app.

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