WarnerMedia Readying $16-$17 SVOD Service Focused on HBO, Cinemax, Warner Bros. Movies

WarnerMedia reportedly plans to launch a subscription streaming video service later this year revolving around HBO, Cinemax and Warner Bros. movies — and priced from $16 to $17 monthly.

The unnamed service, which will bow in beta later this year, would join similar SVOD efforts from Disney ($6.99 Disney+) and Apple aimed at competing against Netflix, Amazon Prime Video and Hulu, according to The Wall Street Journal, which cited sources familiar with the situation.

NBC Universal is readying an ad-supported VOD service for Xfinity subscribers in 2020, which would be available separately to consumers for a monthly fee.

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Notably, WarnerMedia’s service would cost slightly more than what HBO Now ($14.99) and Cinemax ($12.99) do now separately — the latter charged to pay-TV subscribers.

WarnerMedia, which formed following AT&T’s $85 billion acquisition of Time Warner, is also eyeing ad-supported VOD service.

The rush to over-the-top distribution comes as AT&T continues to hemorrhage pay-TV subscribers among its DirecTV and AT&T U-verse platforms. Standalone online TV service, DirecTV Now, for the first time lost subscribers in the most-recent fiscal period as well.

Indeed, AT&T is scrambling to find an OTT product that resonates with consumers. Late last month, it inked a joint venture deal with The Chernin Group aimed at investing $500 million into both ad-supported and subscription-based online video businesses.

“Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution, and monetization models in online video creates the opportunity for us to develop a compelling offering in the OTT space,” John Stankey, CEO of WarnerMedia, said in a statement.

NBA, TikTok Partner for Video Contest in India

India, with the world’s sixth-largest economy and youngest global population by 2020, is a coveted streaming video market for Netflix, Amazon Prime Video, Disney and now the NBA.

The National Basketball Association has partnered with user-generated short-form mobile video sharing platform TikTok for a campaign around the ongoing 2019 NBA Finals between the Golden State Warriors and the Toronto Raptors.

The social media venture – dubbed #DuetWithNBA – enables TikTok users to create and share video duets with content offered on the NBA India app.

The top-three winners who post and share content on the platform will be featured on a post-game presentation of the NBA Finals. Other participants will selected to receive NBA Fanwear.

The campaign follows last December’s partnership between the NBA and ByteDance, TikTok’s corporate parent.

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“We are always looking at partnerships that allow our fans to engage with the league across various content platforms,” Diane Gotua, VP, global business operations at the NBA, said in a statement.

Mayank Gandotra, director of business development at TikTok India, said the platform is ideal for users seeking to watch and interest with sports video.

“We are excited to bring to our active sports community pan-India exclusive content and engaging in-app challenges,” Gandotra said.

The TikTok app is available in more than 150 markets and 75 languages globally.

 

Disney+ SVOD Service Projected to Reach 19.1 Million Subs by 2024

Disney’s pending branded SVOD service, Disney+, is projected to generate 19.1 million subscribers by 2024, according to new data from Digital TV Research.

Disney is expected to launch the $6.99 monthly SVOD platform on Nov. 12 featuring movies from Marvel, Lucasfilm (Star Wars), Pixar, National Geographic and Disney, in addition to TV shows and original programming.

With Disney planning to roll out SVOD service globally, DTR contends the platform will help increase Western Europe SVOD users to 131.2 million by 2024 compared to 65.19 million at the end of 2018.

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“Disney+ will make a strong and immediate impact, given its extensive brand recognition and impressive content line-up,” Simon Murray, principal analyst at DTR, said in a statement.

Indeed, 43.4% of Western European homes will have at least one SVOD subscription by 2024, compared to 26.3% in 2018.

The report contends average households in Europe will pay for 1.71 SVOD subscriptions by 2024 compared to 1.41 subs in 2018.

Netflix will remain the largest pan-regional SVOD platform with 54.86 million paying subscribers expected by 2024 – or 42% of the region’s total. This proportion is down from 54% in 2018, but mean that the platform will add 20 million subscribers.

Report: Global SVOD Subs to Increase 86% Through 2024

The global number of SVOD subscriptions will increase 86%, or 439 million subs from 2018 to 2024 to 947 million. SVOD sub growth will climb by 119 million members in 2019, according to new data from Digital TV Research.

As the gross subscription total races towards 1 billion, the net sub count will rise by 175 million through 2024 to reach 531 million. This means that the average SVOD sub will pay for 1.78 subscriptions by 2024 – up from 1.43 in 2018.

 

 

 

 

 

 

 

Fifteen countries — led by United States and China — will have more than 10 million SVOD subscribers each by 2024 – collectively providing 86% of the global total.

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By 2024, Netflix will contribute 203 million subs (21% of the global total), Amazon Prime Video 125 million (13%), China 289 million (31%), Disney+ 75 million and 255 million other SVOD subs. Netflix and Prime Video do not operate independently in China.

“China overtook the U.S. in 2018 to become the gross SVOD subscription leader,” analyst Simon Murray said in a statement. “These two countries will continue to dominate the world stage. China and the U.S. will together account for 59% of the global total by 2024. However, this proportion is down from 63% in 2018; indicating that other countries are growing faster.”

Report: China Has 60% of Top Global SVOD Services by Subscribers

Government restrictions in China have stymied attempts by Netflix and Amazon to launch subscription streaming video service in the erstwhile Communist country with nearly 1.4 billion people.

As a result, new data from Ampere Analytics found that three domestic Chinese SVOD platforms iQIYI (backed by Baidu), Youku-Tudou (backed by Alibaba), and Tencent Video (backed by Tencent) now represent three of the top-five SVOD services globally by subscribers.

Historically, Chinese SVOD services were different to Netflix by focusing on ad-revenue. In recent years there has been a shift toward ad-free SVOD. By the end of 2018, the three leading Chinese streamers generated $8 billion of revenue — compared to Netflix’ $18 billion.

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By investing heavily in content, the three SVOD services have optimized their revenue composition. Between 2011-2018, iQIYI’s content costs grew by 140%, according to Ampere.

Subscription income was just 4% of total revenue back in 2011; by 2018, it had ballooned to more than 50% of its total revenue. Paid subscribers have privileged access to more exclusive content than the free-tier subscribers.

Investments in content have enabled the Chinese SVOD services to build large content catalogs. Youku-Tudou leads with 13,000 titles, followed by iQIYI at 10,000, and Tencent Video at 7000.

Catalog size is the main point of differentiation as the platforms offer a similar wide-range of content across TV series, movies and reality shows aimed at a mass-market audience.

Service stacking is common, as a result of the original and exclusive content on offer. iQIYI offers 250 original and 1000 exclusive titles, while Tencent Video has 330 original and 1400 exclusive titles.

Ampere says 44% of Chinese Internet users subscribe to two or three services, and 16% to all three. So, while the demographic targeting by the three giants may be consistent, the differentiation happens at the point of delivery through the content offered.

The report expects the continued growth of Chinese SVOD by the big three players as they continue to be buoyed by significant financial backing.

This has enabled iQIYI, Youku-Tudou and Tencent Video to expand rapidly, in addition to exclude smaller local players from entering the marketplace. The domination is further secured by the strict regulatory environment in China, which prevents international players such as Google operating there.

We expect the big three SVOD players in China to continue growing and reach 340 million subscriptions and $12.6 billion in total revenue by the end of 2024,”  analyst Orina Zhao said in a statement. “Investing heavily in content will continue as the main strategy to drive subscriptions and increase user retention.”

Georgia Gov. Kemp Attempts to Mollify Hollywood After Signing Anti-Abortion Law

After scuttling a planned May 22 visit to Hollywood studios in Los Angeles, Georgia Gov. Brian Kemp the next day visited local production facilities to thank them for doing business in the Peach state.

Thanks to lucrative tax incentives, film and TV productions employ more than 5,000 people in Georgia, reportedly generating a $9.5 billion fiscal economic impact in 2017, including $2.7 billion in direct spending.

The state trailed only Canada as primary production home for the 100 top-grossing domestic films in 2017. It was home to more than 455 productions in 2018, according to the governor’s office.

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The PR tour was in response to growing backlash following Kemp’s May 7 signature of an anti-abortion “heartbeat bill” that prohibits a woman from terminating a pregnancy after six weeks — a time period before many women even know they’re pregnant.

Georgia currently bans abortions after 20 weeks of pregnancy. The bill, which goes into effect in 2020, would also allow authorities to investigate women who miscarry.

While initial reaction in Hollywood was limited compared to a previous attempt by Georgia lawmakers to ban same-sex marriage, producers, directors and actors are beginning to speak up.

Actress/activist Alyssa Milano got the ball rolling on social media, delivering a letter to Kemp signed by 50 celebrities who vowed to boycott the state if the bill was signed into law.

Actor Jason Bateman said he would no longer work in the state, which is the production location (Lake Lanier) to his Netflix original series, “Ozark,” among others.

Producers of Amazon Prime Video original series “The Power” reportedly have stopped scouting the state for locations in response to the bill.

“We feel we have to stand up for a woman’s right to choose what happens to her body, and so while this is not a decision we have taken lightly, we feel strongly that it is the right one at this point in time,” Jane Featherstone and Naomi De Pear, said in a statement.

Kristen Wiig and her creative team behind Bridesmaids confirmed to CNN that production of her new comedy, Barb and Star Go to Vista Del Mar, had pulled out of Georgia in response to the bill.

CNN reported that Christine Vachon, CEO of Killer Films; David Simon, creator of “The Wire” and “The Deuce”; and Mark Duplass of Duplass Brothers Productions have all said they will not film in Georgia.

Separately, directors J.J. Abrams and Jordon Peele issued a statement in support of “women in Georgia,” adding that they would donate episodic fees of their new series, “Lovecraft Country,” to the ACLU of Georgia and Fair Fight Georgia, an organization seeking to reform state elections.

Kris Bagwell, who runs EUE Screen Gems in Atlanta, told The Atlanta Journal-Constitution he recently lost a Netflix movie that would have brought about 300 jobs.

“The passage of this law threatens to destroy a significant portion of 11 years of goodwill between Georgia and the national film and television production industry,” Bagwell said. “Isn’t the first rule of job creation ‘Don’t shoot the jobs you already created?’”

Kemp, in response, contends he’s keeping a campaign promise to stop abortions.

“We value and protect innocent life in Georgia — even though that makes C-list celebrities squawk,” the governor told a recent GOP convention in Savannah.

Report: OTT Video Options Reach Saturation Point

With a Netflix subscription in every “pot,” followed closely behind by Hulu and Amazon Prime Video, over-the-top video household penetration in the United States has reached overload status.

New data from Hub Entertainment Research found that the average domestic household now has 4.5 sources of video entertainment, including pay-TV — a statistic that increases to 5.2 sources among younger adults and homes with children.

About 70% of 1,631 survey respondents with broadband use at least one OTT video service such as Netflix, Hulu and Prime Video, while respondents who use more than one service increased 7%.

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Netflix penetration inched up 62% from 61% last year, while Hulu use increased 8% and Amazon upped 5%.

Hub also found that 24% of respondents “have too many TV services” and won’t subscribe to a new service, which is up from 14% last year. Another 36% would cancel an existing service before adding another one.

“The TV landscape is approaching zero-sum status, with more consumers insisting they’d drop an existing service before adding a new one,” Peter Fondulas, principal at Hub and co-author of the study, said in a statement, as reported by Advanced-Television. “That puts added pressure on all TV services — including those on the way from Disney, Apple, and WarnerMedia — to offer the type of value that consumers feel they can’t live without.”

“Viewers are watching content from more sources than ever,” said Jon Giegengack, co-author of the study. “That raises the bar for new platforms entering the market — but it’s a growing opportunity for platforms that can aggregate content from multiple sources. For consumers, simplicity is becoming a more important factor to consider.”

Report: Multiscreen Data Changing TV Viewership Numbers

The final season of “Game of Thrones” set weekly viewership records for both the series and HBO network. Much of that data is attributed to how consumers have changed watching TV from a live event to on-demand and over-the-top streaming video.

New analysis from nonprofit Broadcasters’ Audience Research Board (BARB) in the United Kingdom contends traditional “overnight” viewership data represents only part of the picture. Indeed, displacement viewing has made tracking data correctly more complicated.

BARB suggests that on average people watch 29.3 daily minutes of time-shifted TV content, which results in a 15% uptick in overnight viewership. Sometimes that margin is even greater.

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Live viewing for the first episode of reality series “Shipwrecked” on Jan. 28th was watched by 219,000 people. But the 7-day viewership tally ballooned to 685,000.

TV viewership isn’t limited to the television anymore, thanks to TV Everywhere apps.

“Love Island” gained 27% incremental viewing from non-TV devices, while “Family Guy” viewership increased 8%. Nonetheless, as a whole, non-TV set devices add less than 2% to TV set viewing, according to BARB.

The report found that 1.15 million people watched the second episode of “Save Me” via Sky On Demand pre-broadcast. This was more than half of the total broadcast audience of 2.19 million. This trend increased throughout the series, with the final episode watched by 83% of viewers via Sky On Demand pre-broadcast.

BARB believes re-examining viewership trends is doubly important among the younger demo. Ad-supported YouTube and SVOD services such as Netflix and Amazon Prime Video remain the top challengers to pay-TV.

The report suggests that in 2018, unidentified viewing accounted for 48 daily minutes for all individuals, rising to 71 minutes for 16-34-year-olds.

BARB believes that for television to become a more efficient, targeted and digital-like medium, content and distribution need to be more vertically integrated.

“In this future, new measurement opportunities may complement the data offered by BARB through the likes of set-top box data. A more digital-like television future offers the opportunity to deliver precision at scale,” read the report.

Trusted and accurate measurement remains essential to accountability, planning and optimization, and increasingly so in a world where we see displacement, fragmentation and disruption.

“Ultimately, we need to understand the value that each [viewer] exposure drives for advertisers. The outcomes are what are important; measurement allows us to link exposure to value,” said BARB.

“The industry must come up with a measurement solution enabling better understanding of viewing patterns across all screens and channels. This is still some years away, even in the most advanced markets.”

Roku Selling 1 Million Shares for $80+ Million

Streaming media pioneer Roku May 16 announced it is offering 1 million shares of common stock through Morgan Stanley.

The offering is expected to generate more than $80 million in funds the Los Gatos, Calif.-based company said it would use for working capital and general corporate purposes.

Founder/CEO Anthony Wood May 15 appeared on CNBC’s “Mad Money” with Jim Cramer to explaining how Roku — since launching with Netflix in 2008 — has brought streaming video in the living room through a user-friendly interface and low-cost hardware.

Roku CEO Anthony Wood

“Our goal is to build scale of our active accounts by licensing our technology to third-party TV manufacturers and advertising,” Wood said. “We help a lot of new streaming services build audiences for their platforms.”

Indeed, Roku has almost 30 million registered subscribers accessing proprietary and third-party content, including Netflix, Hulu, Amazon Prime Video and pending Disney+ and Apple TV+ services.

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“Streaming video is very popular right now,” Wood said. “We had almost 3 million people cut the [pay-TV ] cord last year, more than 1 million in the quarter alone. So there’s a lot of momentum right now.”

Wood was asked if big media companies such as Comcast (parent of “Mad Money” creator NBC Universal), which are launching their own over-the-top video platforms, have become “frenemies” with Roku.

“Media companies are partnering with us, not destroying us,” Wood said. “Back when we launched Roku, it was just Netflix and most media companies were trying to avoid streaming. Now they realize it’s the future and they’re heavily invested.”

He said Comcast advertises on the platform and the Xfinity TV app is on the platform, in addition to NBC content.

“Content is what drives streaming,” Wood said. “We have built a purposeful operating system for the TV. It’s designed for the business model TV.”

Subscription Streaming Overtakes Physical/Digital Transactions in the U.K.

As expected, subscription streaming video and music services have supplanted physical/digital transactions in the United Kingdom, the world’s third-largest home entertainment market.

More than 60% of consumers collectively streamed music, video and video games in 2018, compared to 39% who purchased content in physical or digital formats.

“This is a significant moment,” Kim Bayley, CEO of the Entertainment Retailers Association, said in a recent statement.“New digital services have created a “generation rent” for whom [direct] access models seem natural. It is nothing less than a revolution in the entertainment business.”

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The trend mirrors the United States, where subscription streaming (i.e. Netflix, Amazon Prime Video, Hulu, etc.) accounted for 60% of consumer home entertainment spending in the first quarter, ended March 31.

Similar to U.S., the Internet and streaming are driving overall home entertainment segment growth. U.K. revenue grew for the sixth consecutive year in 2018 to a record £7.5 billion ($9.7 billion), up 9.4% from $8.8 billion in 2017.

Digital now accounts for 76.1% of revenue. As recently as 2011, digital’s market share was less than 20%. Around 85% of total entertainment retail revenue is generated over the Internet.

Meanwhile, sales of DVD, Blu-ray Disc and 4K UHD Blu-ray continue. Brits spent $523.5 million on DVD movies and TV shows; $145.7 million on Blu-ray and $21.9 million on 4K UHD Blu-ray.

“Video has gone full circle – from a rental-based business at the dawn of VHS, to an ownership model with DVD and now a subscription/rental model,” Bayley said.