Facebook Sued for Fraud Over Video Ad Views

Facebook has been sued for fraud by a social media marketing firm on behalf of advertisers alleging the social media behemoth in 2016 knew for over year that it was overstating the average time users spent watching paid video ads.

The amended class-action suit – filed Oct. 16 by Crowd Siren in U.S. District Court in Oakland, Calif. – cites a Wall Street Journal story that reported Facebook overstated video viewing time from 60% to 80%. However, the new suit alleges viewership metrics were inflated from 150% to 900%.

“Because advertisers place higher value upon advertisements that are viewed for longer periods, they are willing to pay more for such advertisements,” read the complaint.

Facebook generated more than $17 billion in revenue from ads in 2015 – more than 95% of its overall revenue.

“Facebook engineers knew for over a year, and multiple advertisers had reported aberrant results caused by the miscalculation,” read the complaint. “Yet, Facebook did nothing to stop its dissemination of false metrics.”

The complaint claims Facebook employed a “no PR” campaign designed to “obfuscate the fact that [it] screwed up the math,” while continuing to generate revenue from inflated viewership numbers. Indeed, plaintiffs claim Facebook tried to smooth over the situation by using a new “average watch time” viewership data.

Extended video ad views are crucial. Plaintiffs cited third-party data that claimed when Facebook video ad viewership expands from three seconds to 10 seconds, ad recall increased to 57%, brand awareness increased more than 100%, and 64% increase in “purchase intent.”

 

CBS Ups Showtime Boss David Nevins to Chief Creative Officer

CBS Corp. Oct. 18 announced the promotion of David Nevins, CEO of Showtime Networks, to corporate chief creative officer, effective immediately. Nevins, who remains CEO of Showtime, was also promoted to chairman of the premium channel.

He will be based in Los Angeles, reporting to Joe Ianniello, acting CBS CEO, in New York.

In his expanded role, Nevins will be responsible for oversight of programming, marketing and research across CBS Television Studios, the CBS Television Network’s Entertainment division, Showtime Networks and, in conjunction with CBS Interactive, programming for over-the-top video platform CBS All Access.

He will also oversee CBS’ interest in The CW, a joint venture between CBS and Warner Bros. Entertainment. Julie McNamara (CBS All Access), David Stapf (CBS Television Studios), Kelly Kahl (CBS Entertainment), George Schweitzer (Marketing) and Radha Subramanyam (research) will continue in their leadership roles in these respective areas.

“David has a brilliant creative mind and an impressive track record of success at Showtime and in the entertainment industry,” Ianniello said in a statement.

As chairman/CEO of Showtime, Nevins manages the company’s programming, distribution, business development, finance, marketing, creative, digital media, scheduling, research, acquisitions, network operations, home entertainment, business affairs and corporate communications teams, as well as Showtime Sports and Smithsonian Networks.

Under his leadership, Showtime original series include critically acclaimed “Homeland,” “Billions,” “Ray Donovan,” “Shameless,” “The Affair,” “SMILF,” “Patrick Melrose,” “Kidding,” “House of Lies,” “The Circus,” “The Chi,” and “Twin Peaks.”

The first Showtime project greenlit by Nevins – “Homeland” was the recipient of Golden Globe and Emmy Awards for “Outstanding Drama Series,” as well as a Peabody Award.

During his tenure, Showtime has also become the industry leader in live boxing broadcasts.

Streamer DAZN Inks Mexico Boxer Canelo Álvarez to Record $365 Million Fight Contract

In a move that could elevate OTT video in live sports, DAZN, the nascent London-based fight streaming platform, has signed Mexican boxing champion Canelo Álvarez to a 11-fight, $365 million fight deal – reportedly the richest athlete contract in history.

In addition to the size of the contract, which runs through 2023, the deal transfers boxing’s biggest draw from the lucrative pay-per-view market to a $9.99 monthly streaming service.

Indeed, Álvarez, the current WBA and WBC middleweight champion, most-recently defeated Gennady Golovkin in a rematch that generated more than $94 million in pay-per-view revenue – based on a $84.95 PPV price tag. The fight generated 1.1 million PPV transactions.

“Canelo is the highest-paid athlete in the world,” Oscar De La Hoya of Golden Boy Promotions, told ESPN. “He’s extremely happy.”

The deal comes as HBO recently announced it would cease live boxing broadcasts after 35 years.

Álvarez’ first fight under the DAZN deal is against Rocky Fielding on Dec. 15 in Madison Square Garden.

 

CNBC: NY Attorney General Investigating MoviePass Parent

The New York Attorney General’s office reportedly has opened an investigation into fiscally-challenged Helios and Matheson Analytics, corporate parent of theatrical ticket subscription service MoviePass.

CNBC, citing a source familiar with the investigation, reported NY AG Barbara Underwood is investigating whether HMNY mislead investors about its fiscal health – a situation underscored by the company’s stock currently trading at 2 cents per share, despite a recent 1-for-250 shares reverse stock split.

“We are aware of the New York Attorney General’s inquiry and are fully cooperating,” Helios and Matheson said in a statement to CNBC. “We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General.”

Notably, HMNY has yet to mention the investigation on its website despite the fact it is seeking shareholder support for another reverse stock split, this one combining 500 shares into one.

A stock split is typically used by publicly traded companies seeking to lure investors (by reducing the cost of shares) or artificially buttressing a stock’s valuation – the latter employed by HMNY to push shares above Nasdaq’s minimum $1 valuation and avoid being delisted.

HMNY’s fiscal woes have been driven by MoviePass offering subscribers daily access to a theatrical screening for $9.95 monthly fee – a disrupting business model that is financially unsustainable. MoviePass now limits subscribers to three screenings monthly.

Regardless, HMNY has continually told investors its finances are sound and that steps have been taken to reduce costs. The company’s most-recent regulatory filing tells a different story.

HMNY reported a $109 million net loss in the fiscal period ended June 30, with just $15 million in cash available.

Federal Appeals Court Sets Argument Date for AT&T, DOJ Case

The United States Court of Appeals for the District of Columbia has slated Dec. 6 the date for oral arguments in the Justice Department’s legal challenge of the AT&T/Time Warner merger.

The DOJ in July filed an appeal of U.S. District Court Judge Richard Leon’s ruling that the $85 billion merger was not anticompetitive or detrimental to consumers without spinning off select assets, including Turner and CNN, which the government had sought.

“If AT&T is permitted to control Time Warner’s most valuable media assets, the merged firm will have both the incentive and the ability to raise its rivals’ costs and stifle growth of innovation, next-generation entrants that offer attractive alternatives to AT&T/DirecTV’s legacy pay-TV model – all to the detriment of American consumers,” said the Justice Department.

AT&T, which consummated the merger – including rollout of WarnerMedia – two days after Leon’s ruling, said the judge was thorough in his decision.

“[Leon] could hardly have been more thorough, fact-cased, and well-reasoned,” AT&T General Counsel David McAtee said in a statement.

 

MoviePass Owner Names New Communications Director

Fiscally challenged theatrical ticket subscription service MoviePass needs a new message and corporate owner Helios and Matheson Analytics needs a financial miracle.

The two entities Oct. 17 announced the appointment of Maayan Nave as executive director and president of global communications. Nave will lead all marketing, strategic communications and public relations initiatives for HMNY, MoviePass, MoviePass Films and MoviePass Ventures with existing communications teams in New York and California.

Nave, owner of a marketing communications agency operating in Tel-Aviv and New York, previously spearheaded all global communications for the sparkling water brand SodaStream, where he reportedly oversaw more than 60 PR, social media and guerilla marketing agencies in 45 markets around the globe.

Nave’s marketing activities have been recognized by some of the world’s top marketing competitions awarding SodaStream with the Euro Effie 2017, Golden Drum 2016, Sabre Award 2017, PR Daily’s Campaign of the Year and others.

“Maayan is an inspirational strategic leader, his global experience and proven success are a major asset to HMNY’s and MoviePass’ disrupting mission,” Ted Farnsworth, CEO of HMNY, said in a statement.

“Maayan is an epic disrupter with vast experience in both financial and consumer worlds and the right person to lead our marketing and communications efforts,” added Mitch Lowe, CEO of MoviePass.

All skills will be required as MoviePass attempts to resurrect a $9.95 monthly subscription service that has downsized from one-movie-per-day access to three titles monthly. In the process, HMNY has seen its stock freefall to less than a handful of pennies per share – despite a reverse stock split. A second reverse stock split is now planned.

Netflix Clarifies Subscriber Growth Projections

Coming off a record fiscal third quarter in subscriber growth, Netflix is again sitting pretty atop the global subscription streaming video market with 137 million subs, including 130 million paid.

In the Oct. 16 fiscal interview webcast, co-founder/CEO Reed Hastings reiterated that the platform – going forward – would focus projections on paid subscribers rather than including new subscribers engaged in free trial service.

“We’re getting a little better on the forecasting in particular the evolution to paid net ads,” Hastings said.“So, I think by focusing going forward on paid, we’ll be able to be a little more accurate and focused on the fundamentals.”

The return to “fundamentals” underscores Netflix’s concern about the market’s backlash in the previous fiscal quarter when the service failed to meet Wall Street and its own subscriber growth projections – estimates that included free trials.

“If you look at that paid net ad growth, you can actually see how remarkably steady [we are],” Hastings said.

To sustain subscriber growth in the mature domestic market, Netflix is streamlining growth projections and focusing on bundling the service with pay-TV operators and mobile phone services, including recent deals with T-Mobile and Altice USA.

“There’s still pockets of consumers who – it’s harder for them to get the activation energy to go directly to the website and sign up, but if we can put … a call to action and bundle that the subscription as part of their pay-TV offering or the mobile offering, they can then get right into the service,” said chief product officer Greg Peters.

Globally, Netflix’s sub growth projections remain relatively unlimited for the near future. Much of that due to the service’s burgeoning presence in India – a country with more than 300 million mobile phone subscriptions.

“A couple hundred million people watching content through the Internet in India is a really exciting idea,” said CCO Ted Sarandos.

 

Facebook Bringing Back ‘The Real World’ Reality TV Show

MTV Studios, a subsidiary of Viacom’s MTV, Oct. 17 announced a partnership with Facebook to reboot reality TV pioneer “The Real World for three new seasons debuting in spring 2019.

Originally created for MTV in 1992 by Jonathan Murray and the late Mary-Ellis Bunim of Bunim/Murray Productions, “MTV’s The Real World” was a trailblazing social experiment. It was the first reality series on TV and the first to tackle culturally resonant stories about HIV/AIDS, race, mental health, homophobia, addiction, and more — including the first bisexual man on a TV series, the first televised same-sex commitment ceremony.

Drawing on Facebook’s global platform, the new seasons will base productions in Mexico, Thailand and the United States, respectively, to explore “friendship” and the cultural and social environment in each country.

Available exclusively on on-demand streaming video platform Facebook Watch, the new seasons will introduce interactive social and community features that will enable viewers to shape the action and connect across mobile, desktop and Facebook’s TV app.

Bunim/Murray Productions is co-producing the new seasons with MTV Studios and pre-production is underway in each location.

Facebook users will have the ability to vote one housemate onto the show prior to air, and there will be opportunities for viewers to connect with the cast through Facebook Live, Premieres, and Watch Party. Facebook Watch will also release daily drops of scenes from forthcoming episodes leading into the weekly half-hour premiere. Additional social elements will be introduced prior to launch and throughout the seasons.

“‘MTV’s The Real World’ helped to define a generation and created a new genre of television with a simple yet powerful idea of connecting people from wildly divergent backgrounds to find common ground on the issues that often divided them,” Chris McCarthy, president of MTV, said in a statement. “By partnering with Facebook Watch and BMP, we have the opportunity to impact culture and create a new genre of television all over again, while engaging the next generation of content consumers around the world.”

 

Roku Resumes Selling Streaming Media Devices in Mexico

Roku Oct. 16 announced it would resume sales of streaming media devices in Mexico. This follows a favorable ruling from the 11th Collegiate Court in Mexico City.

“Today’s decision is an important victory for Roku and its Mexican distributor, Latamel Distribuidora, and Mexican retailers in the legal battle against an improper ban on sales of its popular streaming players in Mexico,” Stephen Kay, general counsel at Roku, said in a statement. “We are pleased with the Collegiate Court’s decision and look forward to continuing to build Roku’s TV streaming business in Mexico.”

Roku had been banned for sale in Mexico since the summer of 2017.

At issue were allegations by Cablevision claiming third-party hackers had created apps on Roku to pirate their content. The Fourteenth District Judge in Civil Matters in Mexico City agreed last summer, invoking a country-wide ban that Roku twice failed to overturn on appeal.

Roku CMO Matthew Anderson said customers in Mexico, despite the sales ban, continued to stream increased hours of video content.

“We look forward to launching the latest Roku devices in Mexico soon and giving customers an even richer streaming experience,” said Anderson

WarnerMedia Shuttering Korean-Themed ‘DramaFever’ SVOD

WarnerMedia Oct. 16 announced it is shutting down DramaFever, the $4.99 monthly subscription streaming video service featuring Korean dramas and Asian programming Warner Bros. acquired from Softbank in 2016.

“Today, Warner Bros. Digital Networks will be closing its DramaFever OTT service due to business reasons and in light of the rapidly changing marketplace for K-drama content, a staple of the service’s programming,” WarnerMedia said in a statement.

The media company created following AT&T’s $85 billion acquisition of Time Warner (which included Warner Bros., HBO and Turner) said Warner Bros. Digital Labs would continue operating, serving as the tech engine behind many of WBDN’s operations.

The move was expected after WarnerMedia CEO John Stankey issued a statement announcing the future launch of a branded SVOD service in early 2019.