Ex-Lionsgate Digital Marketing EVP Danielle DePalma Joins Apple TV+

Danielle DePalma has reportedly joined Apple TV+ to spearhead the pending over-the-top video platform’s marketing team in Culver City, Calif.

Danielle DePalma

DePalma, who left Lionsgate in January, had been EVP, worldwide digital marketing & research at the Santa Monica-based studio for about 10 years.

At Lionsgate, DePalma spearheaded digital marketing efforts for the studio’s successful The Hunger Games franchise and Kick-Ass movies.

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DePalma reports to Chris Van Amburg, head of video marketing at Apple.

Amazon, Google Bowing Apps on Competing Streaming Media Devices

In a first, Amazon and Google April 18 announced the two companies will launch the YouTube app on Amazon Fire TV devices and Fire TV-enabled smart TVs, as well as the Prime Video app to Chromecast and separately-enabled devices.

Fire TV, Google Chromecast, Apple TV and Roku dominate the streaming media device market.

Google Chromecast

Prime Video will also be available across Android TV device partners, and the YouTube TV and YouTube Kids apps will also come to Fire TV later this year. Google owns Android TV.

The YouTube app will be the easiest way for users to watch YouTube content on Fire TV. Users will be able to sign in to their existing YouTube account, access their full library of content, and play videos in 4K HDR on supported devices. In addition, standalone YouTube TV and YouTube Kids apps will also launch later this year on Fire TV devices and Fire TV Edition smart TVs where available.

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Amazon Fire TV Stick

“Bringing our flagship YouTube experience to Amazon Fire TV gives our users even more ways to watch the videos and creators they love,” Heather Rivera, global head of product partnerships at YouTube, said in a statement.

Chromecast, along with Android TV users, will have access to the Prime Video catalog, including the latest seasons of Amazon Originals “The Marvelous Mrs. Maisel,” “Hanna,” “Homecoming,” “Bosch,” “Catastrophe” and “The Grand Tour,” along with Amazon Original movies such as Donald Glover’s Guava Island, and Academy Award-nominated films The Big Sick and Cold War. 

With Prime Video users can also rent or purchase titles or choose from more than 150 Prime Video Channels, including Showtime, HBO, CBS All-Access, Cinemax and Lionsgate-owned Starz.

“Whether watching the latest season of ‘The Marvelous Mrs. Maisel,’ catching teams go head-to-head on Thursday Night Football or renting a new-release movie, customers will have even more ways to stream what they want, whenever they want, no matter where they are,” said Andrew Bennett, head of worldwide business development for Prime Video.

DTR: Netflix’s North American Market Share to Fall by 2024

Despite adding 10 million subscribers in the first quarter (ended March 31), and 31 million subs in 2018, Netflix’s market share in North America is projected to decline from 37% to 25% by 2024, according to new data from Digital TV Research.

The London-based research firm based the decline in part on pending OTT services launches from Disney, Apple, WarnerMedia and Comcast. The report contends the number of SVOD subscriptions (movies, linear channels and TV episodes) — excluding platforms such as sports services — in North America increasing by 110 million to 270 million from 160 million in 2018.

The report said the data represents gross subscriptions as many households include more than one SVOD platform.

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Digital TV Research forecasts that 77.8% of TV households (94 million) will subscribe to at least one SVOD platform by 2024. The average SVOD household will pay for nearly three (2.89) SVOD subscriptions.

This compares to 70% of TV households (84 million) TV households subscribing to at least one SVOD platform by end-2018. The average SVOD subscriber paid for nearly two (1.91) SVOD platforms at end-2018.

“Several high profile SVOD launches are imminent,” Simon Murray, principal analyst at Digital TV Research, said in a statement. “We expect that Disney+ will have 25 million U.S. subscribers by 2024. Apple TV+’s growth will be more modest at 8 million.”

Report: Global SVOD Revenue to Increase 25% to $36 Billion This Year

A new report from Futuresource Consulting found that mainstream adoption of subscription streaming video continues to grow worldwide — reaching 60% of households in North America, 26% in Western Europe, 21% in Asia-Pacific and 19% in LATAM.

“SVOD has come of age, with consumer spend exceeding $29 billion last year, up 38% on 2017,” principal analyst David Sidebottom said in a statement.

The analyst cited improving broadband quality, smart TV penetration, availability of services and perceived consumer value.

Netflix and Amazon Prime Video accounted for 33% of all subscriptions globally in 2018 — but almost 66% total consumer spending on SVOD.

Disney’s acquisition of Fox, along with the completion of AT&T’s acquisition of Time Warner and pending OTT platform bow from WarnerMedia will further shape the SVOD landscape in the U.S. and, in the longer term, worldwide, according to London-based Futuresource.

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“Consumers are seeking a combination of functionality, high-quality original content and low price,” says Sidebottom. “Netflix has demonstrated continued growth in both its primary markets of the U.S. and U.K., as well as France and Germany. Plus, Netflix has many options for turning profit, each requiring a local market-specific strategy, based on maturity of infrastructure, device usage, access to local content, GDP and market share.”

Indeed, the report contends competitors to Netflix continue to underperform, with complementary services standing better odds of success.

Futuresource said exclusive, relevant and local content, particularly outside the U.S., is requisite to capturing and holding audience appeal.

While the uptake of multiple OTT services will continue to drive overall subscription numbers, the market will be limited to a small number of clearly differentiated and complementary services. This makes a carefully defined market and content strategy even more crucial, according to the report.

“Consumers face an increasingly confusing video landscape,” Sidebottom said.

He said Amazon Channels and pending Apple TV+ are both well-placed to succeed in the increasingly fragmented world of aggregation, but both currently lack “ubiquity of content” internationally.

“This new breed of ‘super aggregators’ will become an important component in the battle for the living room TV, though, in many instances, they have yet to fully realize the three consumer requirements, including quality, original content and price,” Sidebottom said.

It’s a Netflix World. Hollywood is Just Living in It

Netflix added almost 10 million new subscribers in its most-recent fiscal period, nearly topping 150 million subscribers globally. The SVOD pioneer added 31 million subs in 2018.

The sub growth ended — for  the moment — naysayer illusions the SVOD giant had become a cash cow — economic shorthand for a business generating plenty of cash but waning growth potential.

More importantly, critics contend Netflix is beholden to Hollywood studios for content, the same studios now readying their own rival SVOD platforms to compete with Netflix.

With Disney, WarnerMedia and NBC Universal reportedly set to pull back content license agreements with Netflix by 2020 — if not sooner — scuttlebutt suggests the streamer has become vulnerable and overly dependent upon internal content production.

“The modern media company must develop extensive direct-to-consumer relationships,” Randall Stephenson, CEO of WarnerMedia parent AT&T, said on the telecom’s last fiscal call. “We think pure wholesale business models for media companies will be really tough to sustain over time.”

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Indeed, Disney, which is majority owner of Hulu and online TV service, Hulu with Live TV, will launch proprietary SVOD service Disney+ in November — fortified by content (i.e. Disney, Pixar, Marvel and Star Wars) originally earmarked for Netflix.

To their credit, Netflix brass Reed Hastings and Ted Sarandos welcome the competition, while dismissing the threat. As well they should.

“We’ve been competing with 500 channels of cable and penetrated nearly every household in the world for a long time,” Sarandos said in March. “[Now], it’s the same stable of competitors; just very late to the game.”

Disney+ isn’t set to launch for another seven months. WarnerMedia and Comcast aren’t bowing OTT platforms until 2020. An eternity in the rapidly evolving digital distribution ecosystem.

While Disney+ will be priced below Netflix’s basic subscription plan, its content offering will pale in size to Netflix. The platform is also not projected to be profitable until 2024.

That’s five years of sustained losses. Hulu may have 25 million subs, but it remains a fiscal black hole to its corporate owners (which includes Comcast) since launching in 2007.

Disney’s Direct-to-Consumer & International business segment, which operates Hulu and Disney+, lost nearly $800 million in 2018. Disney expects to have 60 million to 90 million subscribers by 2024, less than half of Netflix’s projected base.

To put it in perspective: Netflix’s sub growth (over 90 days) this year topped the combined subscriber count for CBS All Access and Showtime OTT at the end of 2018 — by 20%.

Netflix’s conservative estimate of 5 million new subs in Q2 equaled HBO Now’s total membership — three years after its 2015 launch.

In fact, many Netflix rivals have resorted to sacrificing revenue and user data in hopes of generating subscribers through Amazon Channels, the ecommerce giant’s platform marketing third-party OTT services to Prime members.

It’s an opportunistic business model Apple is replicating with Apple TV+.

“All of the media companies will have to become more consumer-oriented,” Jessica Reif Ehrlich, media analyst for Bank of America Merrill Lynch, said in a research note last summer.

Translation: Media companies have to become more Netflix-oriented.

Report: 83% of U.S. Teens Own an iPhone

With Apple prepping to launch its rebooted Apple TV+ streaming platform, new data from Piper Jaffray found that 83% of teen survey respondents in the United States own an iPhone.

The survey of 8,000 teens skewed 54% male with an average age of 16.3 years. Notably, 86% of respondents said they would choose an iPhone for their next mobile phone – up from 75% in a spring 2016 survey.

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The data suggests teens would continue use the iPhone as adults, with usage expanding to Apple Music, AirPods, Apple TV+ and Apple Watch.

Indeed, Piper found that 27% of teens own a smartwatch, with another 22% planning to buy one in the next six months. That’s up from 20% in the same survey a year ago.

Apple TV+ Streaming Service to Target 17 Million Users Down Under

Apple’s new streaming TV service, Apple TV+, could capture significant market share in Australia based on the tech companies current market penetrations, according to new data from research firm Roy Morgan.

The data suggests more than 17 million (83.4% of Australians over the age of 14) currently access streaming video services or own Apple-branded devices capable of accessing streaming video.

That market segment (14.7 million people) includes those who already use streaming video services such as Netflix (11 million), Stan, YouTube Premium, Amazon Prime Video and ABC iView, as well nearly 12 million Australians who own an iPhone, iPad, Mac running the iOS operating systems and use Apple services and apps capable of accessing the new Apple TV+ streaming TV service.

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“Apple TV+ will be able to draw upon Apple’s immense war chest of over $240 billion (over $340 billion AUD) to create content which Apple announced as ‘cash on hand’ at the end of 2018,” Michele Levine, CEO, Roy Morgan, said in a statement.

Millennials represent the largest Apple TV+ market at over 4.6 million people. This is followed by more than 4 million Gen Z and just under 4 million Gen X consumers who use streaming services.

Nearly 60% of Australians who currently access a streaming video service or use an Apple device watch the news in an average week, far ahead of any other TV genre.

Reality TV is watched by 39% of Apple users, while just under a third of Apple users watch current affairs shows (32%), sports (31%), game shows (30%) or dramas (30%).

Just over a quarter of Apple users watch home/lifestyle/travel shows (28%), comedies (27%) or documentaries (27%) and just under a fifth watch talk shows (19%).

 

Analysts Split on Apple’s Streaming Impact on Netflix

The day after Apple’s media coup announcing plans for an enhanced Apple TV app and related services, Wall Street appears divided depending upon which side of the Netflix stock it sits.

With more than 1.4 billion iOS connections globally, the revamped Apple TV+ service would appear to be a major competitive threat to Netflix’s global base of nearly 150 million subscribers and future growth.

With a history of industry disruption and creating consumer markets through iTunes, the iPhone, iPad and Apple Watch, conventional wisdom suggests Cupertino, Calif.-based Apple could upend Netflix’s burgeoning growth and market dominance — despite its relatively late entry into the over-the-top video ecosystem.

Needham analyst Laura Martin contends Apple TV+ could be “poison” to Netflix by virtue of Apple’s 900 million existing connected consumers and its ability going forward to bundle original content, discounted third-party OTT services, music and video games.

In a note, Martin writes that if Apple is successful converting just 10% of its unique users to Apple TV+, it would be able to fund content with a budget nearly triple Netflix’s. The analyst is also bullish on Disney’s pending Disney+ streaming service, telling media it could generate 50 million subs.

Dan Ives, media analyst with Wedbush Securities, says Apple is separating itself from Netflix by catering to family-friendly content on a secure platform.

“[Apple] is trying to differentiate itself [from] competitors and flex its Apple brand muscles to get more consumers on this ‘trustworthy’ platform,” Ives wrote. “We continue to believe the company has the opportunity of capturing 100 million consumers on this streaming service over the next three-to-five years.”

On the flipside, Raymond James analyst Justin Patterson says Netflix market position is well-built to withstand the threat.

“Similar offerings already exist, suggesting this service is more incremental than revolutionary,” Patterson wrote in a note. “We believe Apple’s and Disney’s launches will not adversely affect Netflix’s competitive position.”

Longtime Netflix bear Michael Pachter, with Wedbush Securities, says that with Apple reportedly spending $2 billion on original content, including licensing content from Netflix’ studio contributors – in addition to offering third-party OTT services — the SVOD pioneer will have increased challenges finding compelling content to justify its standalone service.

“We expect Netflix to suffer the double whammy of seeing existing content migrate to competitive services at the same time that new domestic subscribers are more difficult to attract,” Pachter wrote in a March 26 note.

 

 

Stars Bite on Apple Streaming Service

Stars and filmmakers from Steven Spielberg and J.J. Abrams to Steve Carell, Jennifer Aniston, Reese Witherspoon and Oprah turned out March 25 to help Apple launch it’s new streaming service Apple TV+.

Reed Hastings Welcomes Pending Netflix SVOD Competitors

Netflix co-founder/CEO Reed Hastings has steadfastly championed new competitors in the burgeoning subscription streaming video-on-demand ecosystem.

With the arrival of an Apple streaming video service expected to be announced on March 25 — without Netflix, according to Hastings — followed by Disney+ at the end of the year, and over-the-top platforms from WarnerMedia and Comcast in 2020, Netflix is about to get its most-serious streaming competition since launching OTT service in 2007.

Hastings, per usual, is taking it all in stride.

“We will make this a better industry if we have better competitors,” the CEO told attendees March 18 at Netflix’s Los Angeles headquarters. “All we have to do to succeed is to continue to stream great content and not get too distracted.”

Indeed, with the service projected to reach 148 million paid subscribers worldwide by the end of the first quarter (ended March 31), Netflix has effectively become the largest pay-TV service globally.

At the same time as subscribers consume increasing amounts of original and third-party content, Netflix is winning the battle for OTT video eyeballs.

“I think of it as us winning time away — entertainment time — from other activities,” Hasting said in January on the fourth-quarter webcast. “So, instead of doing Xbox and Fortnite or YouTube or HBO or a long list, we want to win and provide a better experience, [with] no advertising, on-demand [and] incredible content.”

The executive said Netflix — unlike branded services such as HBO, Showtime and Starz — offers content across a wide spectrum genres and interests, which Hastings characterized as a well-balanced stock portfolio.

“We compete so broadly with all of these providers that any one provider entering only makes a difference on the margin,” he said in January. “So, that’s why we don’t get so focused on any one competitor. I really think our best way is to win more time by having the best experiences in all the things that we do.”