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.”

Comcast Expands Xfinity Store Retail Footprint

Comcast has always had retail service centers. But the cable giant in recent years has rolled out branded Xfinity Stores nationwide to bolster pay-TV consumer awareness in an age of over-the-top video.

Comcast March 11 announced opening of nine new Xfinity Stores planned for the Pittsburgh, Pa., region over the next six months. This investment will expand to 14 the number of Xfinity Stores in the area.

“As technology becomes more and more complex, customers want to see and feel the product before selecting them,” John Giacomazzi, VP of retail merchandising, said in a statement. “We want to bring both existing and potential customers an experience that maximizes product interactions and inspires them to see how these technologies could fit their lifestyle.”

Xfinity Stores range in size up to 4,000 square feet and are located in shopping destinations already familiar to local customers. In addition to receiving product demonstrations, customers can ask about their current services or devices, learn how Xfinity apps make it easy to manage their account, sign up for all Xfinity services, pay bills at kiosks, return or acquire equipment and purchase accessories like Bluetooth speakers, headphones or mobile phone cases.

 

Presidential Candidate Warren Seeks to Regulate Big Tech, Gets Indirect Support from Sky Boss

Sen. Elizabeth Warren (D-Mass.), who is running for president in the 2020 election, wants to break up the mega tech companies such as Google, Amazon, Facebook and Apple — citing antitrust issues.

Specifically, Warren would classify the tech companies with annual global revenue above $25 billion as “platform utilities,” thereby forcing them to split up business units within their corporate structures.

The lawmaker would also look to unwind what she called “anti-competitive” mergers such as Amazon’s acquisition of Whole Foods and Zappos; Facebook’s acquisition of WhatsApp and Instagram, and Google purchase of Waze, Nest and DoubleClick.

Indeed, Warren claims nearly 50% of all e-commerce is generated by Amazon, while 70% of Web traffic migrates through sites owned and operated by Google and Facebook.

The senator, in a March 8 post, argued that the federal government’s lawsuit in the 1990s against Microsoft regarding its (then) dominance in Web browsing paved the way for the emergence of companies such as Google and Facebook.

“Aren’t we all glad that now we have the option of using Google instead of being stuck with Bing?” Warren wrote. “The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive — which pushes everyone in the marketplace to offer better products and services.”

Notably, at an investor confab in London, Jeremy Darroch, group CEO at Comcast-owned European satellite TV operator Sky, questioned the U.K. government’s lack of oversight on big tech.

Jeremy Darroch

“My first instinct in these situations is always to look for self-regulation,” Darroch told the Deloitte Enders Media and Telecoms Conference 2019. “But there are times when that approach won’t work. And I am pleased that the government, and indeed politicians of all persuasion have come together to recognize this is one of those times.”

Darroch contends that as big tech’s reach permeates into all aspects of society, their approach to rules and practices will be self-serving and not necessarily to the betterment of the individual.

He said traditional broadcasters and pay-TV operators must adhere to regulation on content, while video delivered through YouTube and Facebook is given a free pass.

“This is in part because we are in an entirely different world to the one tech platforms were born into,” Darroch said. “Where policy makers once saw their role as fanning the flames of growth for these businesses, they now recognize that they need to apply the same framework to this sector as they do every other.”

SyFy, NBC Universal Bowing ‘Eleven Eleven’ VR Project at SXSW Festival

SyFy channel along with NBC Universal March 5 announced they will bow the “Eleven Eleven” virtual reality (VR) and augmented reality (AR) series later this month at the SXSW film festival in Austin, Texas.

Produced in collaboration with VFX studio Digital Domain, “Eleven Eleven” will be available for both tethered and mobile VR headsets and related AR devices.

“With Eleven Eleven, we are pioneering an innovative scripted format for science fiction content that blends the best of theatre, gaming and cinema to create unique VR and AR experiences,” Steve Patscheck, EVP global programming at NBC Universal International Networks, said in a statement. “By creating an original piece of IP, Syfy was able to design specifically for VR and AR, all the while exploring how immersive technologies could heighten the thrill of storytelling.”

Sky will distribute the series through European regions (Germany, Italy, Spain) via Sky VR Studios.

“We’re delighted to be partnering with Syfy and NBC Universal International Networks on Eleven Eleven,” said Neil Graham, executive producer for Sky VR Studios. “It is a truly innovative VR experience and a brilliant step forward in our growing range of VR content.”

 

House Democrats Seek to Reinstate ‘Net Neutrality’ Legislation

House Democrats in Congress reportedly plan to unveil legislation aimed at restoring net neutrality guidelines mandating Internet service providers (ISPs) treat all traffic on the Web equally.

The legislation, which would ban ISPs such as Comcast, AT&T and Verizon from blocking/slowing Web traffic or offering faster lanes for a fee, would be released Wednesday by House Speaker Nancy Pelosi, as reported by Reuters.

Internet giants such as Facebook, Amazon, Google and Netflix endorse net neutrality guidelines.

The Federal Communications Commission in 2017 voted 3-2 along party lines to repeal net neutrality guidelines it established in 2015 in a similar vote under the Obama Administration. Those guidelines classified the Internet as a utility under Title II of the Communications Act of 1934.

The repeal enabled ISPs to enforce how its subscribers access the Internet.

Pelosi seeks to work with Senate Democrats getting “Save the Internet” legislation passed that would then require President Trump’s signature — a probable long shot considering Trump’s pick to head the FCC, Ajit Pai, orchestrated the net neutrality repeal.

The U.S. Supreme Court last year refused to hear the appeal of the decision of the D.C. Circuit Court that twice upheld the 2015 Open Internet Rule.

Regardless, with 22 state attorneys general endorsing net neutrality, and the U.S. Senate — which is controlled by Republicans — voting in 2018 to restore guidelines, the House feels it has the political momentum.

 

 

 

 

Comcast Delaying 2020 AVOD Launch?

Comcast’s NBC Universal is set to launch an ad-supported over-the-top video service in 2020, targeting existing pay-TV subscribers as well as standalone consumers.

Or is it?

The launch was put into question after Comcast CEO Brian Roberts appeared to punt when asked about a specific timeframe for the OTT video service’s availability.

Speaking Feb. 26 at the Morgan Stanley technology, media & telecom confab in San Francisco, Roberts said a date remained in the works.

“We’ll refine it as we go along,” he said. “We’re all in to create it and not be like Netflix. We’ll launch when it’s ready.”

Roberts said the service gives NBC Universal – which will manage the platform – the opportunity to deliver “smart ads” to new consumers, while enabling current pay-TV distributors the ability to “give more value” to their video customers – for free.

“What can we do that consumers will like and creates value for our shareholders?” Robert said.

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Comcast has long eschewed OTT video, arguing its legacy cable service and Xfinity X1 set-top box offer superior content and access options.

Declaring that Comcast, which acquired U.K. satellite TV operator Sky last year, sits on “an awful lot of content,” Roberts said some programming would be better monetized through AVOD, while other shows would be more suited to third-party platforms.

“We produce or purchase $24 billion worth of content (entertainment and sports) across the globe,” he said.

The executive said that remaining loyal to traditional distribution has contributed to NBC Universal tripling pre-tax earnings since Comcast acquired the company from GE in 2009.

“We don’t have the mindset to take it off all these existing distribution platforms, including HBO, pay-TV and broadcast TV,” Roberts said.

Thinking Globally

Following Comcast’s $39 billion acquisition of Sky, which operates business units in the U.K., Germany and Italy, the media company represents 15% of the global broadband and video market, while generating about 50% of the world’s broadband and video revenue, according to Roberts.

He said Comcast and Sky represent 4% of global broadband/video consumers and 12% of the revenue, which increases to 25% in the U.K.

“They are clearly the markets you want to operate in,” Roberts said. “We are growing our market share. I don’t think anybody has the scale we have and market opportunity.”

Indeed, high-speed Internet has become the company’s most-profitable business unit, with annual growth exceeding 10%.

5G More Hype than Bite

Roberts shrugged off 5G wireless industry chatter, likening the next-generation mobile technology similar to hype surrounding Google Fiber, which launched to much fanfare in 2010, and was scaled back by Google in 2016 due to rollout costs.

The CEO questioned whether 5G could be cheaper than fiber or coaxial.

“The answer is absolutely not,” Roberts said. “At least not in our judgement. It’s much more expensive.”

Comcast’s broadband subscribers use 100 times more data than the average mobile user, according to Roberts.

“They’re hoping to get to the speeds we have today,” he said. “And by the time they do, we’re hoping to be 10 times faster with wired.

“5G is one of these moments. We know it’s coming, what its implications will be, [and] we have people staying on top it.”

Finally, Roberts lauded Universal Pictures’ Best Picture Oscar for Green Book and weekend box office win for How to Train Your Dragon: The Hidden World.

“I don’t think that’s happened very often in Hollywood where you do both on the same weekend,” he said.

 

 

Comcast’s Sky Sports Drops F1 Channel Price

Formula One auto racing has heated up in the over-the-top video world.

Comcast-owned Sky Sports announced that beginning March 1, it will drop the monthly price of its F1 channel 36% to €11.50 from €18, which includes a two-year price guarantee.

“Seven years ago we rewrote the rules and created a dedicated channel for F1, pushing the boundaries of sports broadcasting,” Stephen van Rooyen, CEO of Sky U.K. and Ireland, said in a statement. “Each year we challenge ourselves to go further and this year will be a whole new chapter. We are extremely proud to partner with F1, honoring the history and traditions of this great sport, whilst also taking fans even closer to the track and share our excitement for the future.”

F1 last year launched a proprietary OTT video service “F1 TV,” a $8-$12 monthly service available in four different languages (English, French, German and Spanish) and nearly two dozen markets, including Germany, France, USA, Mexico, Belgium, Austria, Hungary and Latin America.

In addition, Netflix launched “Formula 1: Drive to Survive,” a 10-episode documentary series showcasing F1 behind-the-scenes.

 

 

 

Comcast Disputes Media Report It Favors Roku Over Proprietary Streaming App

Comcast Feb. 4 issued a statement disputing an online media report that it plans to scrap development of a proprietary streaming app in favor of using Roku technology.

A report in BestAppleTV.com claimed Comcast Cable would bypass Apple TV as well as the tvOS app platform in development in favor of a Roku-designed smart box – similar to one manufactured by Roku for Sky-owned Now TV in the United Kingdom.

Comcast Corp. acquired Sky last year for $39 billion.

Media Play News reported Jan. 25 that Now TV, which was one of Roku’s first OEM clients for streaming media devices, including USB stick technology, is the third-largest OTT video service in the U.K. behind market leader Netflix and Amazon Prime Video.

Steve Burke, CEO of NBC Universal, appeared to underscore the move when he said Comcast’s pending AVOD service would incorporate Now TV technology and represented a good alternative for consumers not tethered to pay-TV/SVOD, while posing less of a risk in start-up costs.

“We think this approach has a much better chance to get scale quickly,” Burke said on the fiscal call.

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In a statement, Comcast said the BestAppleTV.com story contained “numerous inaccuracies” and “wrongly conflates” individual business dealings and relationships from Sky, NBC Universal and Comcast Cable.

“To be clear, Comcast Cable is deeply invested in development and innovation of its flagship whole-home platform, Xfinity X1, that is changing the way millions of people watch TV and manage the connected home,” wrote the cabler with 21 million subscribers.

Comcast said Xfinity TV customers can currently access their subscription via the Xfinity Stream app on iOS and Android mobile devices, and on computers and laptops via the Xfinity Stream web portal.

The cabler reiterated that subs can also access their TV subscription via the Xfinity Stream app for Roku devices and Samsung smart TVs (and soon LG and Sony smart TVs as well) or use their Xfinity credentials to authenticate more than 130 networks across more than 20 devices, including Apple TV, Roku, Amazon Fire TV, Google Chromecast, Xbox One and TiVo, among others.

Comcast said it “actively” remains in talks with other device manufacturers to distribute the Xfinity Stream app, “under terms that are mutually agreeable,” through the Xfinity TV Partner Program.

“[The program] continues to enable us to efficiently and effectively expand the range of devices our customers can utilize to access their Xfinity TV subscription,” wrote Comcast.

 

Hulu Launching ‘Pause Ads’ into Programming

Hulu will soon begin placing on-screen ad images when programming is put on hold.

Dubbed “pause ads,” Hulu, beginning in the second quarter, will insert “non-intrusive” images of Coke and Charmin products on select test screens after a user has paused programming for at least three seconds. The image disappears when viewing commences.

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“Our research found that consumers generally preferred ads that were subtle … and that extensive audio and video [spots] when pausing was considered disruptive,” Jeremy Hefland, VP, head of advertising platforms, wrote in a Jan. 31 blog post.

Paused Hulu programming with Charmin image/ad.

Hulu, which currently runs ads on its $5.99 subscription plan, is looking to increase margins from its 25 million subscribers. The platform co-owned by Disney, Fox, Comcast and WarnerMedia continues to generate hundreds of millions of dollars in equity losses for its corporate partners.

Hefland said the pause ad takes advantage of the “natural behavior” exhibited by viewers streaming TV. He said the ads consists of two elements: a creative image supported by contextually “relevant” messaging along with a background gradient to distinguish the ad from the content scene.

“The research so far has shown a positive response from viewers,” he wrote.

 

 

 

Tubi TV AVOD Service to Spend $100+ Million on Content in 2019

Tubi TV, the advertising-based video-on-demand service, Jan. 30 announced plans to spend more than $100 million on content in 2019.

The San Francisco-based service currently features a library of more than 12,000 movies and television series from more than 200 content partners, including most major studios.

Launched in 2014, Tubi said viewership increased 430% in 2018 compared to 2017, with December generating nearly as much content streamed as all of 2017.

The company said it turned a profit in the fourth quarter, ended Dec. 31, 2018, with revenue up more than 180% in 2018. More than 1,000 advertisers ran spots on Tubi, including consumer products and automotive advertisers reaching audiences via ads on movies and TV shows.

Late last year, Tubi became the third streaming service to be made available on Comcast’s X1 platform — behind Netflix and YouTube. The service plans to launch beyond the U.S. and Canada, with the first territories expected to be announced this quarter.

“In 2018, Tubi saw tremendous growth as consumers, fatigued by SVOD subscriptions and services, sought alternative entertainment choices,” CEO Farhad Massoudi said in a statement. “We will continue to use profits to make bigger bets on content, enhance the viewing experience, and continue to press ahead into new grounds in what is our core advantage: technology and data.”