Amazon, Google Smart Speaker Market Hold Under Threat by China

Amazon introduced the first voice-activated smart speaker in 2014 with Alexa and Amazon Echo. According to new data from Strategy Analytics, Amazon’s global smart speaker share of shipments fell to 41% in the second quarter (ended June 30) from 44% in Q1 and 76% in Q2 2017.

By contrast, Google increased its share to 28% in Q2, up from 16% during the same period last year. China’s Alibaba finished third with Apple and JD.com rounding out the top five.

David Watkins, director at Strategy Analytics, says Amazon and Google accounted for a 69% share of global smart speaker shipments in Q2, which was down from more than 90% in Q2 2017.

“The drop is not only a reflection of growing competition in the smart speaker market but also Amazon and Google’s inability to break into the fast-growing Chinese market that is dominated by local powerhouse brands such as Alibaba, JD.com and Baidu,” Watkins said in a statement.

Indeed, Strategy Analytics contends China has the potential to become a lucrative market for smart speakers driven by voice-activated software – as underscored by Google’s recent $500 million strategic partnership with Chinese ecommerce giant JD.com.

David Mercer, VP at Strategy Analytics, believes Google and Amazon’s pursuit of volume over margin has made it difficult for third-party entry-level speakers entering the market with similar features.

However, Mercer contends the premium end of the market offers opportunity to vendors such as Roku who can entice consumers with superior build and audio quality.

“Early adopters of low-cost smart speakers such as the Echo Dot or Google Home Mini who are now looking to buy a second device will be a key target demographic for such vendors,” he said. “Apple has established an early lead in the premium smart speaker market, benefiting from a fiercely loyal fan base and strong momentum behind its Apple Music service. However, we expect the higher end smart speaker market to grow and become much more competitive moving forwards as vendors such as Samsung with its Galaxy Home speaker look to capitalize on the growing acceptance of voice as an established control mechanism.”

 

Lionsgate, Nordisk Ink New Scandinavian Distribution Deal

Lionsgate Aug. 15 announced a new multiyear output deal with Nordisk Film in Scandinavia.

The long-term agreement includes a pipeline of upcoming titles from Lionsgate and subsidiary Summit Entertainment, including the action comedy The Spy Who Dumped Me, thriller A Simple Favor, the Charlize Theron/Seth Rogen comedy Flarsky, and The Kingkiller Chronicle: The Name of the WindJohn Wick: Chapter Three and Chaos Walking.

“Scandinavia is a key market and we look forward to bringing our diverse portfolio of commercially exciting and star-driven event films to moviegoers in the territory,” Helen Lee-Kim, president of international at Lionsgate’s motion picture group, said in a statement.

Lionsgate’s feature film slate has generated nearly $10 billion at the global box office over the past five years led by Wonder, La La Land, winner of six Academy Awards, double Oscar winner Hacksaw Ridge, and the Hunger GamesJohn Wick, and Now You See Me franchises.

“Together with our continuously growing local product portfolio, the deal with Lionsgate will constitute the backbone of Nordisk Film’s leading market position in Scandinavia,” said Kenneth Wiberg, SVP and managing director, Nordisk Film Distribution.“We have no doubt that their movies will continue to resonate with our audiences in the coming years.”

Lionsgate also has output deals with StudioCanal in Australia, Leone Film Group in Italy, Metropolitan Filmexport and SND in France, Belga Films in Benelux, Eagle Films and Jaquar Films in the Middle East, Encore Films and Golden Village in Singapore, Monolith in Poland, and eOne in Spain. Other deals include Central Partnership in the CIS and Vertical in Eastern Europe as well as a joint venture partnership with IDC in Latin America, a digital partnership with iQIYI in China, and Lionsgate’s UK distribution company Lionsgate UK.

Cinedigm Narrows Q1 Loss, Ups DVD/Blu-ray Disc Billing 65%

Home entertainment distributor Cinedigm Aug. 14 announced a first-quarter (ended June 30) net loss of $3.4 million, down 35% from a net loss of $5.2 million during the previous-year period. Revenue declined 14% to $13.1 million from $15.2 million during the previous-year period.

The revenue decrease was partially offset by a 9% increase in content and entertainment revenue, which includes sales of packaged media such as DVD and Blu-ray Disc.

Cinedigm Entertainment Group closed a multi-year, multi-title distribution agreement with Nelvana, a Canadian animation company and global producer of children’s content. The agreement includes DVD and transactional VOD content rights to more than 3,000 television episodes featuring worldwide brands such as Franklin, Babar and Beyblade.

Indeed, DVD/Blu-ray Disc billings increased 65% in the quarter from the previous-year period, while digital billings increased 30%. Total over-the top video revenue (which includes Docurama, Dove Channel and CONtv) reached $2.2 million on 91,000 subscribers – the latter up 7% from last year.

“Despite the first fiscal quarter being a seasonally slow period for our business, our results clearly illustrate the progress we are making in the transformation of our business,” CFO Jeffrey Edell said in a statement.

CEO Chris McGurk said the company made three industry presentations at the Beijing Film Festival, in addition to announcing six new entertainment partnerships.

Cinedigm is majority owned by Bison Capital, a Chinese owned and Hong Kong-based investment company focusing on media and entertainment, healthcare and financial service industries.

“We made significant progress in our streaming OTT segment, where we generate sales through four revenue streams: subscription fees, advertising, servicing retainers and content distribution fees,” said McGurk. “We are encouraged by our progress as we continue to lead the way in this huge, fast-growing, high margin segment with a differentiated OTT business model.”

 

MoviePass Parent Posts $109.7 Million Half-Year Loss; Seeks Additional Funds to Sustain Operations Over the Next 12 Months

Helios and Matheson Analytics – parent of fiscally-challenged ticket subscription service MoviePass – Aug. 14 reported a second-quarter (ended June 30) net loss of $83.6 million on revenue of $74.1 million. The loss compared to a net loss of $5.2 million on revenue of $1.1 million during the previous-year period (before HMNY acquired 92% stake in MoviePass).

As expected, the MoviePass business model enabling subscribers daily access to a theatrical screening for $9.95 monthly fee continues to negatively affect the bottom line. The service generated $72.4 million in subscription revenue but spent a whopping $178.7 million reimbursing exhibitors for tickets consumed by subscribers.

For the first six months of the year, the cost-to-revenue equation didn’t get any better. MoviePass generated $119.5 million in subscription revenue, spending nearly $315 million on exhibitors.

Net loss for the half-year topped $109.7 million on revenue of $123.6 million.

In the regulatory filing, HMNY said it has been given until Dec. 18 to bring its stock up to the Nasdaq minimum of $1 per share or company shares will be delisted.

Further, HMNY said that without additional funding, it would not have sufficient funds to meet its obligations within the next 12 months.

“While management will look to continue funding operations by raising additional capital from sources such as sales of the company’s debt or equity securities or loans in order to meet operating cash requirements, there is no assurance that management’s plans will be successful,” HMNY said in the filing.

The company ended the period with just $15.5 million in cash, down from $25 million at the end of 2017.

 

MGM Studios Home Entertainment Revenue No ‘Death Wish’

Home entertainment sales of movies and TV shows has come back strong for MGM Studios.

The venerable studio Aug. 14 said second-quarter (ended June 30) global home entertainment revenue for film content topped $37.1 million, an increase of $18.2 million, or 97%, as compared to $18.9 million in revenue for the previous-year period.

Primary (physical and digital) drivers included the domestic home entertainment reboots of Death Wish, starring Bruce Willis, and Tomb Raider, featuring Alicia Vikander, plus ongoing distribution of library content. By comparison, home entertainment revenue for the prior-year quarter included distribution of Spectre, The Hobbit trilogy and other library content.

Home entertainment and other revenue for television content reached $8.5 million, up $3.8 million, or 79%, as compared to $4.7 million last year. The increase was primarily driven by the continued strong home entertainment performance of “The Handmaid’s Tale.”

Through the first six month of the year, worldwide home entertainment revenue for film content reached $56.3 million, an increase of $5.6 million, or 11%, as compared to $50.7 million for the six months ended June 30, 2017.

Home entertainment and other revenue for TV content was $19 million for the six months, an increase of $5.7 million, or 43%, as compared to $13.3 million last year.

Online Trading App Halts MoviePass Parent Stock Purchases

With its stock worth about a nickel, Helios and Matheson Analytics – parent of fiscally-challenged ticket subscription service MoviePass – has been a draw to entry-level investors.

That worries Robinhood, an upstart online trading app with a business model that pledges to help first-time investors navigate Wall Street.

The firm operates on margin trading charging subscribers from $6 monthly to buy and sell stock. This week, Robinhood reportedly sent an email to subscribers announcing it had suspended new purchases of HMNY stock.

“In order to protect our customers from the risks associated with some low-priced stocks, we remove the buy option for stocks like HMNY that consistently trade under $0.10 [per share],” said the company, as reported by Business Insider.

HMNY stock, which underwent a 1-for-250 shares reverse stock split last month, has lost 99.99% of its value since the split. The stock is reportedly held by more than 74,000 Robinhood subscribers, who can still hold and sell the company’s shares.

Robinhood’s move is in stark contrast to Maxim Group and Canaccord Genuity, two Wall Street investment firms that have profited from marketing shrinking HMNY shares.

The firms worked with HMNY pushing the stock on investors since last August after the latter acquired controlling interest in MoviePass. In return, they reportedly made millions on commissions while holding a “buy” rating on HMNY stock.

“We see numerous ways to monetize a large user base and drive profitability, such as movie promotions, profit sharing, rebates, concessions, data sales and advertising,” Brian Kinstlinger, analyst at Maxim, wrote in an October note.

Kinstlinger set a price target of $20 per share for HMNY stock.

Of course, HMNY shares have only declined over the past 10 months as MoviePass hemorrhaged millions more than it generated. The service reportedly spent upwards of $45 million monthly in June and July reimbursing exhibitors for tickets redeemed by subscribers.

An investor buying $100,000 worth of HMNY stock last October, would now hold about $1.85 in value.

Indeed, axiom “buyer beware,” is a mainstay on Wall Street precisely because investment banks’ ratings on third-party stock are often undermined by their cozy relationship with the same clients.

“Human nature being what it is, no CEO is likely to throw business to a bank whose analyst is negative on the CEO’s company,” Erik Gordon, professor at the University of Michigan’s Ross School of Business, told Business Insider.

“There are examples of analysts reiterating ‘buy’ ratings 30 days before a company went under,” said Gordon.

Facebook, Disney/ESPN+ Up Soccer Streaming

Soccer may be the world’s most-popular sport that has yet to generate mainstream appeal in the United States. But that isn’t stopping major domestic over-the-top video platforms from inking distribution deals with international professional leagues.

Disney’s recently launched OTT service ESPN+ signed a multi-year media agreement for three more top-division soccer leagues – Australia’s Hyundai A-League and Westfield W-League, the Chinese Super League and the Dutch Eredivisie.

In all, more than 300 matches per season from the leagues will be streamed live exclusively in the United States on ESPN+.

“This agreement further boosts the position of ESPN+ as the leading new platform for live soccer matches in the U.S.,” Burke Magnus, EVP of programming and scheduling at ESPN, said in a statement. “These leagues join a lineup of hundreds of top-division live matches from Europe and North America, along with a strong lineup of original and studio soccer programming.”

Last week, ESPN+ announced a new multi-year agreement with Serie A TIM that includes more than 340 Italian soccer matches per year. The streaming service is also home to MLS Live – a collection of more than 250 Major League Soccer out-of-market matches, as well as local market media home for the Chicago Fire.

ESPN+ will carry more than 100 live matches from the UEFA Nations League (UNL), a new tournament among the 55-member nations from the Union of European Football Associations played on FIFA international match days beginning in September. In addition, ESPN+ subscribers have access to hundreds of English Football League (EFL), the United Soccer League (USL) matches.

The service also streams “ESPN FC”, ESPN’s daily global soccer news, information and analysis program.

Separately, Facebook signed a deal with Spain’s La Liga soccer league to stream matches in Asia. The €90 million agreement will live-stream 380 matches in India, Pakistan, Bangladesh, Afghanistan, Maldivas, Nepal, Butan and Sri Lanka.

This summer Amazon Prime Video announced it would live-stream 20 Premier League soccer matches beginning in 2019.

 

One Billion Internet-Connected TV Devices in Use Globally

It’s a streaming video world. There more than one billion connected TV devices now in use worldwide, according to new data from Strategy Analytics.

Connected TV devices – including Smart TVs, Blu-ray Disc players, video game consoles, streaming media devices – enable users to stream over-the-top video content to the TV.

Smart TVs have been consistently gaining market share and now represent nearly 60% of the total Internet-connected media device installed base.

“The popularity of connected TV, in particular Smart TVs and dedicated media streaming devices such as Roku, Amazon Fire TV and Chromecast, has grown dramatically over the last few years and has led to a fundamental shift in how consumers view and engage with content on the TV set,” David Watkins, director at Strategy Analytics, said in a statement.

Spearheaded by Roku, Strategy Analytics expects more than 55 million streaming media devices to ship globally this year – about a third of 150 million Smart TV market.

“Sony has long been the global leader in connected TV devices in terms of devices installed in homes thanks not only to its strength in TVs and Blu-ray players, but also as a result of its leading position in the global game console market,” added David Mercer, VP at Strategy Analytics.

The report said Samsung now equals Sony at the top of the rankings in terms of overall installed connected TV device units, and the South Korean company is poised to take the lead in the second half of 2018.

“As Smart TVs take an ever-growing share of the overall market, Samsung will replace Sony at the top of the device footprint rankings later this year thanks to its dominant position in the world’s Smart TV market,” said Mercer.

Pay-TV Q2 Sub Loss Lowest Since 2014

Pay-TV operators, including cable, satellite and telecom, lost about 800,000 video subscribers in the second quarter – down from 930,000 subs in the previous-year period, according to new data from the Leichtman Research Group.

The losses were offset by ongoing gains in online TV services such as Sling TV, DirecTV Now and Spectrum TV Plus, which totaled 385,000 subs.

Leichtman found that the largest pay-TV providers in the U.S. – representing about 95% of the market – lost about 415,000 net video subs in Q2.

Specifically, satellite operators Dish Network and DirecTV shed 480,000 subs – the largest in any previous quarter.

The top six cable companies lost about 275,000 video subs compared to a loss about 190,000 subs in Q2 2017.

Telecoms lost about 45,000 video subs, compared to a loss of 270,000 subs last year.

The top pay-TV providers now account for about 91.3 million subscribers – with the top six cable companies having 47.4 million video subs, satellite TV services 30.6 million subs, the top telecoms 9.1 million subs.

Online TV services Sling TV and DirecTV Now have 4.2 million combined subs.

“This marked the fewest net losses [among pay-TV operators] in the traditionally weak second quarter since 2014,” Bruce Leichtman, president and principal analyst for Leichtman Research Group, said in a statement.

Leichtman said the rise in online TV is both a product of consumers opting for more economical services, as well as changes in providers’ strategies.

“This newer segment of the industry has helped to mitigate overall pay-TV losses, while also contributing to a share shift from traditional services,” he said.

CFO David Wells Leaving Netflix

Netflix Aug. 13 announced that CFO David Wells plans to step down after helping the company choose his successor. The search will include both internal and external candidates. Wells, who joined Netflix in 2004 and has served as CFO since 2010, intends to stay until his successor is found.

“It’s been 14 wonderful years at Netflix, and I’m very proud of everything we’ve accomplished,” Wells said in a statement.

Wells, who has made a small fortune through stock options during Netflix’s meteoric rise, said his next chapter in life will focus on philanthropy.

“I like big challenges, but I’m not sure yet what that looks like,” he said.

“David has been a valuable partner to Netflix and to me. He skillfully managed our finances during a phase of dramatic growth that has allowed us to create and bring amazing entertainment to our members all over the world while also delivering outstanding returns to our investors,” said co-founder/CEO Reed Hastings. “I look forward to working with him during the transition as we identify a new CFO who will help us continue to pursue our ambitious goals.”