Hulu: 63% of Live TV Subs Streamed Winter Olympics

Hulu said 63% of Live TV subscribers streamed 6.5 million hours of coverage at the 2018 Winter Olympics in Pyeongchang, South Korea, which equates to 15 hours per viewer during the 18-day quadrennial event.

Most streamed events included women’s figure skating, bobsledding, snowboarding, alpine skiing, ski jumping and freestyle skiing, according to MultichannelNews.com.

The data isn’t surprising considering Hulu is co-owned by NBC Universal parent Comcast. It also offered a Winter Olympics customized interface enabling users easier selection of their favorite events.

The $39.99 live TV service launched last May and reportedly has about 450,000 subs.

 

Comcast Offers $31 Billion in Cash for Sky

In a major consolidation move across the Atlantic, Comcast Feb. 27 announced a $31 billion cash offer for British satellite giant Sky. The $17.40 per share offer bests Rupert Murdoch’s $14.96 per share offer through 21st Century Fox.

Murdoch has sought to acquire the remaining 61% ownership of Sky after his initial 39% stake.

“Sky and Comcast are a perfect fit: we are both leaders in creating and distributing content,” Comcast CEO Brian Roberts said in a statement.

Sky provides sports programming, movies and broadband service to 23 million homes across Britain, Ireland, Germany, Italy and Austria.

Notably for home entertainment, Sky’s “Buy & Keep” platform last October began offering consumers of digital movies a Blu-ray copy sent separately in the mail. Sky previously only offered a DVD backup.

Comcast, which owns NBC Universal and DreamWorks Animation, is seeking to outmaneuver The Walt Disney Co., which has a $52 billion offer for select Fox assets, including Sky.

The cable giants contends the acquisition would enhance its entertainment, distribution, and technology prowess domestically, while expanding it international footprint to more effectively compete in the rapidly changing and competitive entertainment and communications landscape.

“We already have a strong presence in London, and Comcast intends to use Sky as a platform for our growth in Europe,” said Roberts.

In a statement, 21st Century Fox said it remained committed to its $15 billion cash offer for the remaining stake in Sky, announced Dec. 15, 2016.

“We note that no firm offer has been made by Comcast at this point. A further statement will be made if appropriate,” Fox said in a statement.

Media reports suggest Roberts is also considering another bid for Fox assets after Comcast’s original $60 billion offer was rejected in favor of Disney’s.

 

Report: Comcast Revisiting Disney Bid

Comcast reportedly is considering revising a previous bid for select assets of 21st Century Fox. The original $60+ billion bid was turned down in favor of Disney’s $52.4 billion offer largely due to antitrust concerns, according to The Wall Street Journal.

Rupert Murdoch, chairman of 21st Century Fox, owns WSJ parent News Corp.

While both companies’ bids for 20th Century Fox film and TV assets — which include Fox 2000, Fox Searchlight, majority control of Hulu, Star India, Sky, FX, Fox’s regional sports networks, including YES and $13.7 billion in Fox debt — were similar, Fox chose Disney’s lower offer due to regulatory concerns.

Indeed, when Comcast — one of the nation’s largest cable operators — acquired NBC Universal, it went to great lengths to assuage regulators’ concerns about unfair competition and monopolies. The company thus agreed to be a silent partner in Hulu, among other arbitration conditions that expired in January.

In acquiring Fox, Comcast seeks additional cable TV networks, in addition to content creation. It’s a strategy AT&T is following acquiring Time Warner. That deal’s future remains unknown and is now under litigation from the Department of Justice, citing antitrust issues.

Separately, Sen. Richard Blumenthal (D-Conn.) in December urged to the DOJ to re-investigate Comcast’s acquisition of NBC Universal following the end of government-imposed conditions.

“If your investigations determine that the Comcast-NBC acquisition will produce anticompetitive effects, even if the merger conditions are retained, you may need to reconsider separating Comcast and NBC universal in order to fully restore competition,” Blumenthal wrote Makan Delrahim, head of antitrust at DOJ.

Meanwhile, Fox has issues of its own. The company’s $16.3 billion attempt to acquire the remaining 61% stake in Sky — Europe’s largest satellite TV operator — was thrown a roadblock when the U.K. watchdog Competition and Markets Authority ruled the deal was not in the public interest.

“Media plurality goes to the heart of our democratic process,” Anne Lambert, chair of the CMA, said in a statement. “It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.”

Fox, in a statement, said it would “continue to engage with the CMA ahead of the publication of the final report in May.” Negotiations reportedly could include divesting Sky News from Murdoch’s influence.

 

Hulu Posted $920 Million Equity Loss for Corporate Owners in 2017

Hulu, the No. 3 domestic subscription streaming video service with 17 million subscribers, generated $920 million in combined 2017 equity losses for corporate parents Walt Disney Co., Comcast, 21st Century Fox and Time Warner.

The SVOD service, which is 30% owned by Disney, Fox and Comcast, with Time Warner holding a 10% stake, generated equity losses of $531 million during the 2016 fiscal period.

Based on Comcast’s 10K regulatory filing, the media giant recorded an equity loss of $276 million in 2017, up 64.2 % from an equity loss of $168 million loss in 2016, and $106 million loss in 2015.

Comcast said the losses were driven by higher programming and marketing costs.

Indeed, Disney Feb. 6 revealed it expects more than $250 million in equity losses on Hulu in 2018. The revised projection is up from a previously anticipated loss of $100 million. Disney is on the hook for about $450 million in capital contributions to Hulu in 2018, according to a regulatory filing.

Disney, along with other Hulu corporate owners, expect to recoup the losses through content sales delivered by proprietary channels.

Regardless, BTIG Research analyst Rich Greenfield believes Hulu’s fiscal losses could reach $1.7 billion in 2018 – on top of an additional $1.5 billion in combined capital investment.

Greenfield says when Hulu’s relatively low loss to corporate owners was manageable, fiscal bean counters could spin the results. But as the losses deepen, Greenfield – in a blog note – wrote, “We have virtually no disclosure on the positive impact Hulu’s spending is having on its parent companies.”

 

 

 

Disney Ups Hulu 2018 Equity Loss to $250 Million

The Walt Disney Co. Feb. 6 revealed it expects more than $250 million in equity losses on Hulu in 2018. The revised projection is up from a previously disclosed loss of $100 million.

Disney co-owns (30%) Hulu, which has about 17 million subscribers, with 21st Century Fox (30%), Comcast (30%) and Time Warner (10%).

Disney would become majority owner of Hulu should its $52.4 billion acquisition of select Fox assets pass regulatory muster.

On the fiscal call, CFO Christine McCarthy said about a third of the loss ($82.5 million) would impact second quarter (ending March 31) financial results.

The executive said the increased losses are due to content licensing between Hulu’s equity owners. As a stake holder, Disney expects to recoup the loss through Disney-ABC Television Group content sales as well as various affiliate network revenue.

Disney is on the hook for about $450 million in capital contributions to Hulu in 2018, according to a regulatory filing.

On the fiscal call, Disney CEO Bob Iger said following the end of Netflix’s exclusive pay-TV distribution of its original Marvel, Pixar and Lucasfilm movies, all titles released in 2019 would be distributed through proprietary digital channels, including possibly Hulu.

“Hulu has an existing output deal with HBO that will last longer by a few years the deal we have with Netflix,” Iger said.

He said it remains Disney’s intention following closure of the Fox deal to grow the global direct-to-consumer business taking advantage of combined studios’ production output.

“We fully hope to expand our production of intellectual property under those [Fox, Disney] umbrellas — studio and television to feed multiple direct-to-consumer businesses that we own,” Iger said.

 

 

DreamWorksTV Looking Beyond Ad-Supported Business Model

With more than 3.7 million “subscribers” streaming ad-supported myriad content, including 100 original programs on its YouTube channel, DreamWorksTV has been a hit for children ages 6-12.

Now, the platform is trying to expand the revenue potential (i.e. sustainability) by launching fee-based SVOD service through Amazon Channels.

The $4.99 monthly platform includes a free seven-day trial period for Amazon Prime members, which costs $99 per-year separately.

Original programs “Schneck & Eck Crack the Case,” “Action Figures in Action,” “Secret Agent Challenge,” and “Neighborhood Super Watch.”

The platform is the brainchild of AwesomenessTV, which was founded in 2012 and acquired by Comcast in 2016 as part of the DreamWorks Animation deal for $3.8 billion.

“As we continue to grow the DreamWorksTV brand, this is an exciting step for us to explore revenue streams and brand engagement across platforms,” Brik Rawlings, head of DreamWorks TV, said in a statement.

But transforming a viewer base predicated on free access to paying subscriber could be a challenge.

YouTube – the world’s largest video streaming service – launched $10 monthly SVOD service YouTube Red in 2015. To date, it has just 1.5 million paying subs, including another 1 million trial subs.

“While we don’t release or comment on speculative numbers, we’re seeing strong engagement of the service in the four countries we’ve launched, leading us to invest in more originals series and movies,” a YouTube spokesperson told The Verge in 2016.

Comcast Lost 186,000 Video Subs in 2017

Comcast Cable Jan. 24 reported a loss of 38,000 video subscribers in the fourth quarter, ended Dec. 31, 2017.

The nation’s largest pay-TV operators lost 186,000 video subscribers last year as consumers increasingly move toward Web-based home entertainment distribution options. Comcast ended the year with 21.3 million video subs.

Meanwhile, Comcast added 350,000 high-speed Internet customers in the quarter, and more than 1.1 million for the year. It now is the largest ISP in the country with almost 26 million Internet subs.

“Our best-in-class products and continued focus on the customer experience drove healthy [pre-tax] growth balanced with strong customer relationship net additions,” Comcast Corp. CEO Brian Roberts said in a statement.