Subs Dive Lower

Halloween may be Oct. 31, but the real thriller in Hollywood will hit in November.

Disney+ and Apple TV+ are in a sub battle to the pricing floor. After Disney+ announced its Nov. 12 launch at $6.99 a month, with special offers dipping below $4 a month, Apple TV+ Sept. 10 an­nounced it would launch its SVOD service Nov. 1 (more than a week before Disney) at $4.99 a month, below regular pricing for Disney+ and approaching the special offer cost.

Not coincidentally, Disney CEO Bob Iger resigned from the Apple board the same day.

The two services, vying to take on the likes of streaming giants such as Netflix (with pricing starting at $8.99 a month) and Amazon Prime (a free add-on to its shipping fee), seem to have made the calculation to charge practically nothing for premium streaming content.

The moves could further lower con­sumers’ perceived value of content in general. Over the years, studios have fought outfits that devalued their con­tent. Now, Disney and several others are joining some of the low-priced markets they previously vilified — and undercutting them.

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Certainly, entering the streaming market offers additional value other than subscription revenue. Disney and others will gather a treasure trove of data on their customers, and perhaps will find new ways to better target and monetize content.

Giving away a library of titles for the price of a gallon of milk each month is certain to attract con­sumers, but it’s a gamble that could undermine the value of the studios’ core product.

AT&T CFO Backs John Stankey, Downplays Apple TV+ Impact on HBO Max

The day after Apple announced pricing/content updates for its Apple TV+ subscription streaming service, and an activist investor called for the ouster of AT&T’s CEO and COO, the telecom’s CFO John Stephens came out swinging.

Speaking Sept. 11 at the Bank of America Merrill Lynch Media, Communications & Entertainment Brokers Conference in Los Angeles, Stephens didn’t directly address Elliott Management’s Paul Singer (who owns $3.5 billion of AT&T stock) or his letter to the board calling for executive changes, including replacing CEO Randall Stephenson and COO John Stankey — the latter also CEO of WarnerMedia.

AT&T CFO John Stephens

Specifically, Singer questions the cost/benefits involved acquiring DirecTV and Time Warner as the pay-TV market shrinks in a rapidly evolving over-the-top video ecosystem.

Indeed, AT&T expects to lose more than 1.3 million pay-TV subscribers in the current third quarter (ending Sept. 30).

Stephens, however, outlined why Stankey is the right executive to oversee Warner Bros., HBO and Turner operations, in addition to AT&T.

Stephens said AT&T’s goal to meld entertainment content with wireless direct to the consumer requires specialized leadership befitting Stankey’s skills.

AT&T COO/WarnerMedia CEO John Stankey

“John has IT and technology experience,” Stephens said. “He had network experience. He was at our business, a wireline group and the wholesale side. He has run consumer mobility. He’s had experience in strategy. He’s had experience, with Warner Media and real knowledge of it.

“So, he’s the guy that’s got the background, that capabilities and we know and knows us and he knows all our capabilities.”

Stephens said Stankey understands the AT&T culture (he’s been with the company almost 20 years).

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“He has the ability to move things and how to get things done,” he said. “It makes all the sense … and is the right way to go about moving forward, particularly with our real significant move with HBO Max.”

Indeed, AT&T in October is planning an extensive unveiling of HBO Max — yet another direct-to-consumer subscription service centered around the HBO brand.

With Apple pricing Apple TV+ at $5 monthly, the pending service costs a third of the current HBO Now SVOD service.

Stephens isn’t concerned, characterizing the nine original shows launching on Apple TV+ as

“We only have a 40-year head start with [HBO] … a quality product that is the premium of premium,” he said. “[The] depth of just HBO alone is tremendous and it’s much different than what was talked about by some of the other [SVOD] carriers.

“When you add to that the Warner Bros. library — some of the children stuff there, what it might be — new shows that might come out and other things, it reinforces, boy, we’ve got really quality assets and really quality capabilities that others just don’t have at their disposal. So, we feel really good about that.”

Stephens pointed out that a couple of the Apple TV+ original programs (“Mythic Quest,” “Little Voice”) are produced by Warner Bros. Television.

“So, I’m sure those are pretty good shows because the folks over at Warner Bros. do great work,” he said.

Apple TV+ to Bow Nov. 1 at $4.99 a Month

Apple’s streaming service Apple TV+ will launch Nov. 1 in more than 100 countries and regions for $4.99 (U.S.) per month with a seven-day free trial.

The launch precedes rival Disney+’s Nov. 12 bow by more than a week. The pricing is also lower than the standard price of Disney+, launching at $6.99 a month, and comes close to matching special offers for the Disney service.

The service will be available on the Apple TV app on iPhone, iPad, Apple TV, iPod touch, Mac and other platforms, including online at https://tv.apple.com. Customers who purchase any iPhone, iPad, Apple TV, iPod touch or Mac can enjoy one year of Apple TV+ for free.

Through Family Sharing, up to six family members can share one Apple TV+ subscription.

The Apple TV+ original lineup includes “The Morning Show,” “Dickinson,” “See,” “For All Mankind” and “The Elephant Queen.”

“With Apple TV+, we are presenting all-original stories from the best, brightest and most creative minds, and we know viewers will find their new favorite show or movie on our service,” said Zack Van Amburg, Apple’s head of worldwide video. “Each Apple TV+ original offers its own unique story, fresh perspective and powerful message — all meant to entertain, connect and inspire cultural conversations.”

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“Apple TV+ is an unprecedented global video service with an all-original slate,” said Jamie Erlicht, Apple’s head of worldwide video. “We look forward to giving audiences everywhere the opportunity to enjoy these compelling stories within a rich, personalized experience on all the screens they love.”

Apple TV+ originals debuting on the Apple TV app on Nov. 1 include:

  • “See,” an drama starring Jason Momoa and Alfre Woodard set 600 years in the future after a virus has decimated humankind and rendered the remaining population blind;
  • “The Morning Show,” a drama starring and executive produced by Reese Witherspoon and Jennifer Aniston, and starring Steve Carell, exploring the world of morning news and the ego, ambition and the misguided search for power behind the people who help America wake up in the morning;
  • “Dickinson,” a darkly comedic coming-of-age story, exploring the constraints of society, gender and family through the lens of rebellious young poet Emily Dickinson;
  • “For All Mankind,” a new series from Ronald D. Moore that imagines what would have happened if the global space race never ended and the space program remained the cultural centerpiece of America’s hopes and dreams;
  • “Helpsters,” a new children’s series from the makers of “Sesame Street”;
  • “Snoopy in Space,” from Peanuts Worldwide and DHX Media, which takes viewers on a journey with Snoopy as he follows his dreams to become an astronaut;
  • “Ghostwriter,” a reinvention of the beloved original series, following four kids who are brought together by a mysterious ghost in a neighborhood bookstore, and must team up to release fictional characters from works of literature;
  • “The Elephant Queen,” a documentary film that follows a majestic matriarch elephant and her herd on an epic journey of life, loss and homecoming;
  • and a series from Oprah Winfrey in which she joins the world’s most compelling authors in conversation as to builds a global book club community and other projects to connect with people around the world.

More Apple TV+ originals will be added to the Apple TV app each month, including:

    • Servant, a new psychological thriller from M. Night Shyamalan that follows a Philadelphia couple in mourning after an unspeakable tragedy creates a rift in their marriage and opens the door for a mysterious force to enter their home;
    • “Truth Be Told,” a series starring Academy Award winner Octavia Spencer and Emmy Award winner Aaron Paul that explores America’s obsession with true crime podcasts and navigates urgent concerns about privacy, media and race;
    • “Little America,” a series inspired by the true stories featured in Epic Magazine that brings to life the stories of immigrants in America;
    • The Banker, a feature film inspired by a true story, starring Anthony Mackie and Samuel L. Jackson as two African American entrepreneurs who try to circumvent the racial limitations of the 1950s and quietly provide housing loans to the African American community in Jim Crow Texas;
    • and Hala, a feature film and official selection of the 2019 Sundance Film Festival and 2019 Toronto International Film Festival that follows a high school senior struggling to balance being a suburban teenager with her traditional Muslim upbringing.

Starting today, viewers can watch trailers and add Apple TV+ series and movies to Up Next on the Apple TV app, so they can be notified when the first episodes become available. At launch, most Apple TV+ series will premiere with three episodes, with one new episode to roll out each week, while full seasons of some series will be available all at once, according to Apple.

Audiences worldwide can view Apple TV+ originals subtitled and/or dubbed in nearly 40 languages, including subtitles for the deaf and hard-of-hearing (SDH) or closed captions. Apple TV+ series and movies will also be available with audio descriptions in eight languages.

Pluto TV Expands to Apple Devices in Europe

Viacom-owned ad-supported VOD service Pluto TV is expanding to Apple devices in Europe.

The Pluto TV app, which includes access to more than 30 channels featuring movies, MTV, and TV sitcoms, is now available in Germany, Austria, Switzerland and the United Kingdom.

Viacom acquired San Francisco-based Pluto earlier this year for $340 million in cash.

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“Our goal is to entertain the planet and reach audiences where they are, be it at home on the TV screen or on the go on their mobile device”, Olivier Jollet, managing director Europe at Pluto TV, said in a statement. “Launching on Apple TV and Apple mobile devices in German speaking markets and the U.K. is the perfect way to do so, since we are now additionally providing our lean-back experience to millions of Apple users.”

Pluto TV earlier this year said it had surpassed 18 million monthly users.

Analyst: Apple Expected to Top Netflix in Original Content Spend

With Apple rolling out its upgraded Apple TV+ in November, the cash-rich tech giant is reportedly set to beginning spending big dollars on original content.

New data from Ampere Analysis contends Apple will spend more than $6 billion on original content for its new subscription streaming video service — six times what it has spent in previous years, according to The Financial Times.

Apple has announced 36 original titles for the new service, an uptick in content spending that ranks it among Disney/Fox, NBC Universal/Comcast/Sky and Viacom/CBS.

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Notably, Apple’s burgeoning spending is expected to top Netflix’s $2.4 billion original content spend in 2019, according to Ampere.

“Apple’s significant increase in content expenditure highlights its commitment to the streaming video space, and its willingness to go head-to-head with the industry’s biggest spenders,” analyst Daniel Gadher wrote in a note.

Gadher believes Apple’s content spending underscore’s the company’s strategy to emulate Netflix, Amazon Prime Video and Hulu’s programming platforms.

With Disney+, HBO Max, NBC Universal’s unnamed service, and Jeffrey Katzenberg-led Quibi all entering the market, Gadher contends “high value” exclusive content will become key.

Disney has said it would spend about $1 billion on Disney+ original content, increasing to $2.5 billion by 2022. It has announced 43 original titles for the service.

Ampere expects Disney will spend $5 billion on original Disney programming plus the additional original spend from its acquired Fox assets.

Quibi, the mobile-only streaming platform concentrating on short-form video has committed $1.1 billion in original content in its first year. It has commissioned 44 new titles.

“The ability of the platforms to produce quality and differentiated content will be integral to success in a market where Netflix, Amazon and Hulu are already entrenched,” Gadher wrote.

Digital Media Companies, Trump Unite Against New French Tax

Digital media companies, including Amazon, Apple, Google and Facebook, are getting an unlikely assist from President Trump against a proposed 3% tax in France on revenue derived from digital ad services and user-to-user transactions.

Specifically, the tax targets revenue derived in part off of French consumer online activities, including ecommerce, streaming video and audio.

Trump & Co. are crying foul since the tax largely applies to about 30 American companies generating at least €25 million ($27.8 million) in France and €750 million ($842 million) worldwide.

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France, which has tried unsuccessfully to secure European Union support on the move, argues the traditional system doesn’t work on these companies since they operate internationally with little physical presence in the country.

“This is a concern for international trade and the wider economy if countries follow the [Digital sales tax] model and select specific sectors and groups of foreign companies for targeted tax policies,” Nicholas Bramble, trade policy counsel at Google, said in a statement.

“The French tax is unjustifiable in that it infringes international agreements, and unreasonable in that it is discriminatory, retroactive and inconsistent with international tax policy principles.”

“They shouldn’t have done this,” Trump told the media in July. “I told them, I said, ‘Don’t do it because if you do it, I’m going to tax your wine.’”

France contends the tax would help level the playing field.

“These digital giants use our personal data, make huge profits out of these data then transfer the money somewhere else without paying their fair amount of taxes,” said French finance minister Bruno le Maire.

Best Buy, Roku, Apple Shares Rebound Following Tariff Delay

Shares of Best Buy, Roku, Apple and other consumer electronics retailers/manufactures rebounded after President Trump delayed until Dec. 15 a proposed new 10% tariff on cellphones, laptop computers, video game consoles and other goods manufactured in China.

The tariff on $300 billion worth of products, which Trump announced Aug. 1 as part of ongoing trade tensions with the world’s No. 2 economic power, would have been on top of an existing 25% tariff Trump previously imposed on $250 billion worth of other Chinese goods.

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The delay came after intense lobbying efforts in the nation’s capital convinced administration officials the new tariff could have serious implications to the U.S. economy entering the fourth quarter.

“Just in case they might have an impact on people … what we’ve done is we’ve delayed it so they won’t be relevant for the Christmas shopping season,” Trump told reporters on Aug. 13.

The news was welcomed by Wall Street, which saw shares of Best Buy, Apple and Roku rise 6.5%, 4% and 1%, respectively.

Roku is one of the largest manufacturer of Internet-connected televisions, with many originating from China.

But to the Consumer Technology Association trade group, delaying proposed tariffs only prolongs market uncertainty and impacts consumers 401(K) pension or retirement accounts, among other issues.

“Retaliatory tariffs are bad economic policy in the short and long term,” Gary Shapiro, CEO of the CTA, said in a statement. “The administration’s legally dubious trade war is compromising America’s global leadership.”

Previously-announced tariffs starting Sep. 1 will affect $52 billion in consumer technology products, and the tariffs starting Dec. 15 will affect $115 billion in products. Since July 2018, Section 301 tariffs on China have cost the consumer tech industry over $10 billion, including $1 billion on 5G-related products, according to the CTA.

“Tariffs are taxes,” Shapiro said. “The Chinese government doesn’t pay for them – Americans bear the burden. And next month, we’ll begin to pay more for some of our favorite tech devices – including TVs, smart speakers and desktop computers. The administration should permanently remove these harmful tariffs and find another way to hold China accountable for its unfair trading practices.”

Ampere: U.S. Subscription Streaming Video Growth Resumes

Netflix subscriber growth in the United States may be slowing, but the domestic market for subscription streaming video is poised for expansion, according to new data from Ampere Analysis.

The London-based research group said growth in SVOD subscriptions in the U.S. resumed after peaking from Q3 2016 and Q1 2018.

Much of that renewed growth has come from Hulu topping 25 million subscribers earlier this year, in addition to pending service launches from Disney, Apple, WarnerMedia and NBC Universal.

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Although the proportion of Internet users in Europe who have a SVOD subscription is lower than in the U.S., there continues to be healthy sub growth across the Atlantic.

“The growth in SVOD subscribers in both regions will come as welcome news, particularly to those looking to enter the market this year such as Disney and Apple as it shows there is still room for growth and the opportunity to take a share of the revenue,” Minal Modha, consumer research lead at Ampere, said in a statement.

Indeed, about 80% of Internet users in Saudi Arabia and the U.S. have at least one SVOD subscription. Japan and France are the only countries where fewer than 50% have a subscription.

Subscriptions are being driven by younger demographics, with those under 35 over-indexing in each market except Saudi Arabia where it is driven by those aged 45 years and over.

All but two markets analyzed enjoyed subscriber growth between Q3 2018 and Q1 2019, with Saudi Arabia (+8.1%), Australia (+6.8%) and Denmark (+6.3%) spearheading expansion.

The Netherlands and Japan are the only markets where subscriber growth has stagnated since Q3 2018.

Roku Remains Top Streaming Media Device in U.S.

Roku’s streaming TV platform accounted for more than 30% of U.S. sales of connected TV devices in Q1 2019, further increasing its lead in streaming TV platforms, according to the latest data from Strategy Analytics.

The British research firm finds that there are more than 41 million Roku-based devices in use, including branded set-top devices, HDMI sticks and smart TVs, accounting for 15.2% of all media streaming devices.

Roku now has a 36% lead over the next major platform, Sony PlayStation, in terms of devices in use. The report predicts that this lead will stretch to 70% by the end of the year, largely as a result of the success of Roku’s smart TV partner strategy.

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Other key findings from the report include:

Amazon’s Fire TV OS was the second-most-sold streaming TV platform in Q1 2019, with 12% of sales, followed by Samsung’s Tizen at 11% and Google (Android TV and Chromecast) at 9%

By the end of 2019 more than 52 million Roku-powered devices will be in use, accounting for 18% of all connected media devices

“Roku had another strong quarter in Q1 and continues to hold a commanding lead in streaming media platforms in spite of Amazon’s growing influence in the living room,” David Watkins, director at Strategy Analytics and the report’s author, said in a statement.

Watkins said Roku’s firs-mover status (it co-pioneered subscription VOD with Netflix), content offering of third-party streaming services, comprehensive search function and simple and intuitive user interface have contributed in its success.

The analyst cautioned Roku is less well-known outside of the U.S. and to succeed on the international stage would need to “face down” the challenges of building brand awareness and drawing users away from well-established players such as Amazon, Apple and Google.

“There was record growth in the smart TV market in the first quarter of 2019 and Roku and TCL have proved to be a great partnership in this rapidly growing segment,” added David Mercer, principal analyst at Strategy Analytics. “Roku is set to become the U.S.’s top smart TV platform this year in terms of sales share, and Google and Amazon clearly have their work cut out to stay in touch with the market leader.”

Report: Apple to End iTunes

Apple is planning to unveil new apps and the roadmap to end iTunes June 3 at the Worldwide Developers Conference in San Jose, Calif., according to a report from Bloomberg.

Three new apps for Mac will be introduced — Music, TV and Podcasts — to match the format already employed on iPhones and iPads, according to the report from Mark Gurman.

Since its beginning with music, iTunes has branched into video and podcasts, prompting some to call it unwieldy.

Apple also is planning a new streaming service Apple TV+, announced March 25, with the backing of big Hollywood names. The service is scheduled to debut this fall. No pricing has yet been announced.

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Business Insider reported that Facebook and Instagram pages for iTunes were scrubbed on Saturday, citing a Mac Rumors report that said the content was scrubbed over the last 48 hours “since cached versions of the accounts still show posts, photos, and videos as of May 31. Content from the iTunes Facebook and Instagram pages have been moved over to newer pages for Apple TV.”

The apparent death of iTunes, however, doesn’t mean Apple is no longer selling or renting movies digitally. In the Apple TV app, users can buy or rent movies, buy episodes or seasons of TV shows, and subscribe to Apple TV channels to stream or download movies or TV shows.