Data: U.S. Q2 SVOD Growth Cools, Except For Amazon Prime Video

With Netflix set to release second-quarter financials July 20, research firm Kantar suggests the fiscal period will be a wake-up call to U.S. subscription streaming video services when it comes to domestic growth.

Citing in-house data, London-based Kantar contends that a pandemic-related home confinement restrictions end, there has been a significant drop in the number of U.S. households taking out a new SVOD subscription in the past three months — down to 3.9% in Q2 2021 from 12.9% Q2 2020.

“This is the smallest growth in new subscribers we have recorded,” Jennifer Chan, consumer insight director at Kantar, wrote in a post.

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Among U.S. streaming platforms, Amazon Prime Video regained the top spot for new subscribers for the first time since Q3 2020. Prime Video gained market penetration, up three points to 58%, and ranked No. 1 in terms of new subscribers.

Kantar said Amazon is gaining subs through owned touchpoints such as offering a free trial and consumers visiting Amazon.com. Prime Video is currently among the highest for converted free trials at 31%, beaten only by Apple TV+ at 37%. Both factors indicate that Prime Video is still benefiting from the increase in Amazon Prime subscriptions taken out during lockdown.

Discovery’s branded SVOD platform, Discovery+, moved to No. 2 in terms of new subscribers, in just its second full quarter of operation. In Q2, Discovery+ generated one in 10 new SVOD subscribers according to the report.

The growth, combined with Prime Video, contributed to Netflix installed base declining to two-thirds of all U.S. subscribers — the behemoth’s lowest homeland penetration ever as streamer juggle increased competition. Meanwhile, the proportion of U.S. households who have a video subscription has remained consistent at 74.6%, meaning there are now 95.8 million households with subscriptions, as of June 2021.

Kantar said Disney+ series “WandaVision” was the top-rated title for the second quarter in a row, with Hulu’s “The Handmaid’s Tale” No. 2 and “Mare of Easttown” on HBO Max in third place.

Amazon Upping Pressure on Netflix

As well as gaining new subscribers, Prime Video’s average stacking of subscriptions increased from 2.6 to 2.8 year-over-year, compared with the market average of 3.1 to 3.8. This means there is less competition for viewership time and indicates that subscribers are getting what they need from fewer services.

When examining the reasons for satisfaction, the reports suggests Prime Video scores higher than the total market for touchpoints such as ease of use (48% vs 44%), the amount of original content (44% vs 41%) and value for money (44% vs 41%).

Over the past year, despite new entrants to the market such as HBO Max, Discovery+ and NBCUniversal’s Peacock, Amazon’s content acquisition has remained strong. This reflects the caliber of original content such as “The Boys” and “The Marvelous Mrs. Maisel.”

Kantar made no mention of Amazon’s $8.5 billion acquisition of MGM Studios.

“As people return to bricks and mortar stores, it will be interesting to see whether Prime Video’s original content can carry them through and prevent subscribers from canceling their Prime subscription,” Chan wrote.

Finally, Netflix’s share of SVOD-enabled U.S. households is at its lowest, down to 67%, from 74% in Q2 2020, and similarly its share of new subs hit 6% this quarter, down from 13% a year ago. Although the market share outranks the competition, the saturation of SVOD services may be resulting in Netflix subs trading the service in for a newer model, according to Kantar.

Whereas Disney+, Hulu and HBO Max take the top spots for content this quarter, Netflix comes in fourth and fifth position with “The Crown” and “Lucifer.”

“This is the first time they have missed out on a top three spot for content enjoyed for at least the past five quarters,” Chan wrote.

Indeed, Netflix went from having the lowest stacked subscriptions of the main services at 2.5 last year to three, meaning that Prime Video now has a lower average. This is another indication of Amazon managing to navigate the new landscape. In addition, the most common stacks for Netflix subs are Netflix, Prime Video and Hulu.

The report found that the cost of SVOD service stacking can quickly add up and Netflix subs cited saving money as the top reason (31%) for canceling service.

Interestingly, Netflix has the highest proportion of subscribers who say that someone else pays (27.4%), compared with Disney+ (26.3%) and Hulu (23.1%), suggesting a lot of account sharing is taking place.

Perhaps media attention around Netflix clamping down on account sharing has cast the streamer in a negative light among some subscribers. This may explain why Netflix received its lowest NPS score over the last five quarters with a score of 37, according to Kantar.

Stacked Subscriptions Continue to Climb

With three-quarters of U.S. households now accessing SVOD services, growth is slowing as subs now seek content rather than standalone gateways to streaming. In addition, with the rise in ad-supported VOD platforms, price sensitive consumers now have more options to drive down subscription costs.

HBO Max is launching an ad-supported option this month. For those stacking multiple subscriptions, $9.99 for HBO’s ad-free version is more attractive to a subscriber already paying $30 to $40 a month for SVOD, than Max’s $14.99 ad-free offer.

“If the content is there and the interface is good, consumers are still satisfied with ad-supported services,” Chan wrote.

Vodafone Subs Get Free Six-Month Access to Discovery+ Streaming Service in Time For Tokyo Olympics

Ahead of the start of the 2020 Tokyo Summer Olympics on July 23, Vodafone on July 6 announced that it is offering six months’ free access to the Discovery+ subscription streaming service to its 17.5 million U.K. telecom subs on up to four devices.

At the end of the promotional period, subscribers will have the option to continue their subscription for £4.99 per month or cancel the service without any charge.

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Discovery+ launched in the U.S. in January, and is the streaming home of Eurosport, which has European multimedia rights to the Olympics. Parent Discovery recently acquired operational control of WarnerMedia, including HBO Max.

Vodafone subs will have access to 55 live event feeds and 3,500 hours of coverage, as well as 2,000 hours of on-demand action.

Olympic Games streaming hosts include Greg Rutherford MBE, Tour de France winner Sir Bradley Wiggins and Joanna Rowsell MBE, who will be joined by Orla Chennaoui, Reshmin Chowdhury and Radzi Chinyanganya.

In addition to the Games, Vodafone subs can access a variety of Discovery content, including “90 Day Fiancé,” “Aussie Gold Hunters,” “Gold Rush,” “Deadliest Catch,” “Ghost Adventures,” “Chris Watts: A Faking It Special,” “Michael Jackson: A Faking It Special,” “Meghan & Harry Recollections May Vary” and “The Devil Made Me Do It,” among others.

“The British summer of sport is going from strength to strength,” Max Taylor, consumer director, Vodafone U.K., said in a statement. “There’s also a wide range of content outside of sport that customers can enjoy, including documentaries and boxsets.”

Subscribers who want to redeem the offer can do so via the My Vodafone app) or through Vodafone’s dedicated Discovery+ landing page.

Discovery+ Launches Doc Series ‘Surge at Mount Sinai’ July 1

The non-fiction streaming service Discovery+ will exclusively bow the documentary series The Surge at Mount Sinai globally July 1.

The series, narrated by Jon Bon Jovi, with a track from Billie Eilish, follows three healthcare workers, two intimate patient journeys and experts from across the hospital in one of the world’s largest healthcare systems in the United States during an unprecedented global pandemic. With intimate access to those on the front lines, the film chronicles the race against time as New York City became the global epicenter of the COVID-19 outbreak and New York was experiencing more than 350 deaths per day.

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“We are honored to shine a light on the heroes who came to the world’s rescue during an unprecedented global pandemic,” Lisa Holme, group SVP of content and commercial strategy at Discovery, said in a statement. “At Discovery+, we take pride in bringing our subscribers the best real-life stories and there is no more important story from the past year than following the trials of our healthcare workers.”

“This film explores the emotional journey of individuals who responded to the pandemic in unimaginable ways,” stated David A. Feinberg, SVP, chief marketing and communications officer at Mount Sinai Health System, dean of marketing and communications at Icahn School of Medicine, and co-executive producer on the documentary. “The heroism and innovative spirit by the scientific and medical community is awe-inspiring. The unprecedented challenges that we faced, the many lives that we saved, and the scientific breakthroughs that were identified gives the viewer a unique view of how we found our way through one of our darkest periods. We hope audiences will be moved and inspired by the bold actions taken by the heroes in this film and will come away understanding who we are as an organization. We are forever changed by this period, and our relentless pursuit of knowledge, understanding, and answers to the world’s most complex health challenges continues.”

“Our purpose for this film was to give the world a glimpse into what life was like for the heroic frontline workers during the height of the pandemic,” Peter Maiden, founder and CEO of production studio Convicts and executive producer on the documentary, said in a statement. “These individuals went above and beyond and dedicated an extraordinary amount of time and energy to saving the lives of NYC residents. Capturing their perseverance through the pandemic felt like the most important story that could be told during this time. We are grateful for Mount Sinai for the opportunity to engage with their staff and excited to partner with discovery+ to bring these stories to the forefront. We hope the film will inspire audiences to find the goodness in humanity, even in the dark, and to keep purpose at the heart of all they do.”

CFO: Verizon to Up Free Entertainment Offers on 5G, Sticking With Fios TV

Verizon has made news in recent years offering its wireless subscribers free 12-month access to Apple Music, Disney+, Discovery+ and most recently, Apple Arcade and Google Play Games. As the telecom expands its 5G Network nationwide, expect to see enhanced third-party entertainment options, according to CFO Matt Ellis.

Verizon CFO Matt Ellis

Speaking this week on the virtual Credit Suisse Communications Conference, Ellis didn’t have any new entertainment partners to announce, except to say that with the enhanced distribution options available with 5G, the entertainment options in the future would reflect the next-generation mobile phone and data communication standards.

“We got into video initially with Disney+ and it’s been a good one-and-a-half years now, right?,” Ellis said. “So we’ve had that out there and then, obviously, Discovery+ earlier this year. And so gaming was the obvious next piece to come there. And obviously, we’ve had that in the past couple of weeks with the Apple Arcade and Google Play. Too soon to already kind of see anything huge in the numbers, but certainly, the initial feedback is very much in line with expectations.”

Ellis said Verizon is analyzing what entertainment options, including live events, it could offer subscribers in a 5G world that wouldn’t be as possible in a 4G world.

“It is in line with how we’re thinking about it,” he said. “I’m not going to give anything away at this point, but certainly fair to say we expect there to be more to come.”

Separately, when asked whether Verizon might meld Fios TV into an online service in order to reduce content/distribution costs, Ellis said the telecom would be sticking with the pay-TV brand, which includes a broadband-only option.

“What we do in that space is we give customers choice,” Ellis said. “If a customer wants broadband only, we absolutely will do that for them. We love that proposition. We saw our customers who want the traditional TV package. We have that as well. It may not be as valuable to us as when we launched Fios over 15 years ago, but it’s also not a negative to the business either.”

 

HBO Max GM Andy Forssell: Nothing Changes for at Least a Year — Except Movie Distribution

On the heels of AT&T’s $43 billion spin-off of WarnerMedia in a merger with Discovery, and pending corporate name change, life for the brand’s flagship streaming video platform, HBO Max, continues unchanged.

That’s the message from Andy Forssell, former interim CEO of Hulu, who was tapped last year by former Hulu boss Jason Kilar to be EVP and GM of Max.

Speaking June 3 on the virtual Barclays Future of Media Conference, Forssell said the mission at the SVOD/AVOD Max remains to produce compelling content and grow standalone subscribers — the latter totaling 11.1 million subs over the service’s first year.

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HBO and HBO Max ended the most-recent fiscal period with 44 million combined subs.

“Our mission today is the same as it was a couple of weeks ago: Run the business,” Forssell said. “We’re at least a year away from anything happening [with the merger]. So, certainly big news and one that we pay attention to — but it doesn’t change what we do.”

With Discovery CEO David Zaslav tapped to run the renamed Warner Bros. Discovery company, leaving Kilar and Forssell’s roles going forward in question, Forssell made no mention of his job future.

“Eventually, we’ve got to figure out how do you combine [Max] with Discovery [and Discovery+ SVOD] and what does that mean,” he said. “But for the [Max] team, it seems quite a ways off because we’ve got to wait for the Department of Justice and that type of [regulatory approval] process to play out.”

In the meantime, Forssell said you should expect the company to continue to rejigger the theatrical window through 2022. WarnerMedia made industry shockwaves announcing it would release the Warner Bros.’ 2021 theatrical slate concurrently on Max for 31 days — after doing so with Wonder Woman 1984 on Christmas Day 2020.

That singular streaming strategy will be tweaked next year to re-embrace exhibitors, but the days of the traditional theatrical window are not likely returning, said the executive.

“You’re going to see in 2022 a lot of experimentation that’s going to be far more wide-ranging than it would have been without COVID,” Forssell said.

Specifically, the executive said studios would apply a mixture of PVOD/SVOD and theatrical distribution depending on the movie, current events and market conditions.

“We’ll see experimentation across the board,” Forssell said. “You’ll see everybody trying almost all [distribution] models next year.”

He said the simultaneous release of WW84 on Max saw two-third of the movie’s streaming audience also watch the entire first season of original series “The Flight Attendant” starring Kaley Cuoco.

Forssell said that the streaming audience for the second Warner movie release on Max, The Little Things, attracted a wider audience via Max than it would have strictly through theatrical.

“In other words, The Little Things really enjoyed the benefit of a huge wave of audience,” he said. “So we look at that very closely.”

Indeed, Max’s latest original series, “Mare of Easttown” starring Kate Winslet, has generated strong consumer responses on both on the service and linear television.

“It’s a record setter on Max,” Forssell said.

The executive thinks that as streaming access accelerates, transactional distribution of movies “probably drops” over time. He thinks that when combining SVOD with ad-supported VOD, the possibility of penetrating the equivalent 100 million households reached during pay-TV’s peak is not unreasonable.

“By the end of [next year], I think we’ll have a really clear signal on how does that evolution move,” Forssell said. “We believe there’s a place for theaters in the long term. Super important to us that something like that thrive and survive. But again consumers will tell us.”

WarnerMedia Getting New Name: ‘Warner Bros. Discovery’

Following the merger of Discovery and WarnerMedia, the former Time Warner is getting yet another name change. The new company will be called Warner Bros. Discovery, according to Discovery CEO David Zaslav, who notified staff in a June 1 town hall. The new name is dependent upon regulatory approval of the $43 billion merger.

Time Warner’s name was changed to WarnerMedia in 2018 after it was acquired by AT&T, which is now spinning off the company with the new merger agreement. In addition to Turner and Warner Bros., WarnerMedia and Discovery’s prized assets include streaming platforms HBO Max and Discovery+.

The initial “Warner Bros. Discovery” wordmark for the proposed company.

The initial wordmark for the proposed company includes the iconic line from the Maltese Falcon, “the stuff that dreams are made of,” an additional homage to the rich legacy of Warner Bros. and the focus of what the proposed company will be about.

“Warner Bros. Discovery will aspire to be the most innovative, exciting and fun place to tell stories in the world — that is what the company will be about,” Zaslav said. “We love the new company’s name because it represents the combination of Warner Bros.’ fabled 100-year legacy of creative, authentic storytelling and taking bold risks to bring the most amazing stories to life, with Discovery’s global brand that has always stood brightly for integrity, innovation and inspiration.

“There are so many wonderful, creative and journalistic cultures that will make up the Warner Bros. Discovery family. We believe it will be the best and most exciting place in the world to tell big, important and impactful stories across any genre — and across any platform: film, television and streaming.”

 

Discovery+ June Programming Slate Includes True Crime Series, Weight-Loss Doc

Streamer Discovery+ has announced new and original programming that will be available in June.

The lineup includes “Pushing the Line,” focusing on an extreme, high-intensity sport known as “highlining”; the true crime series “Relentless,” which documents a filmmaker and her involvement in the case of a missing young woman; and “Too Large,” a docu-series that follows seven 400- to 800-pound people on a weight-loss journey.

Other new series include Bryan and Michael Voltaggio in “Battle of the Brothers” and Michelle Buteau in “Weekend Getaway with Michelle Buteau,” executive produced by Queen Latifah.

“Pushing the Line,” which premieres June 5, gives viewers a taste of what it is like to walk on a line, hundreds of feet above the ground, on a one-inch rope that’s thinner than your belt. The series follows the top highliners and the up-and-comers of the sport, both in action and behind the scenes.

“Relentless,” which debuts June 28, follows the case of 21-year-old Christina Whittaker, whose disappearance in the small town of Hannibal, Mo., triggered a frantic search. Eight months later, filmmaker Christina Fontana met Whittaker’s mother when filming a documentary about the families of missing persons — and her focus changed to explore the intricacies of that one case. Using more than 400 hours of footage from field investigations and video diaries filmed over 11 years, this documentary follows not only a complex search for a missing person, but the journey of a filmmaker who becomes dangerously ensnared by the story she’s documenting.

“Too Large,” launching June 2,  introduces viewers to seven desperate hopefuls, each weighing between 400 and 800 pounds, who seek the help of renowned bariatric surgeon Dr. Charles Procter as they attempt to lose weight and change their lives forever.

“Battle of the Brothers” (June 17) pits Bryan and Michael Voltaggio against one another as they each lead a team of aspiring chefs in a culinary competition.

And “Weekend Getaway With Michelle Buteau” (June 10) finds the comedian, actor and author hitting the road for a few weekends of fun, food and wild times, from the Gulf Coast of Mississippi with Tig Notaro to New Orleans with Sasheer Zamata to Malibu with Chelsea Peretti.

Other new shows include “Shock Docs: The Devil Made Me Do It” (June 11), which follows a bizarre murder case in which a Connecticut man insists “the devil made me do it”; “90 Day Journey: Pride Month” (June 6), a curated miniseries of “90 Day” couples’ love stories from the beginning to the present day; and “The House My Wedding Bought” (June 16), which follows designer and real estate expert Breegan Jane (from “Extreme Makeover: Home Edition” as she helps couples on a budget who want to pay for a dream wedding as well as put a down payment on a house.

CEO Stankey Says AT&T Key to HBO Max Success

AT&T just announced it is spinning off a 30% minority stake in WarnerMedia for $43 billion, the latter including Warner Bros., Turner, HBO and HBO Max. AT&T CEO John Stankey contends the Max subscription streaming platform launched last summer would not be “where it is today” without the assistance and support of the telecom giant.

Speaking May 24 on the virtual JPMorgan 49th Annual Global Technology, Media and Communications Conference, Stankey said vertical integration of the former Time Warner media giant (a.k.a. WarnerMedia) helped the telecom expand its brand while validating Max on a global scale.

HBO and HBO Max ended the most-recent fiscal period with 44.2 million combined subscribers. That tally could expand to 63.9 subs worldwide when Max launches in Latin America and the Caribbean in June. A less-expensive ad-supported tier is slated to a launch next month as well.

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“I think realistically, HBO Max would not be where it is today, if not for the strength of the two combined companies, what AT&T was able to bring both in distribution as well as some of the economic clout — market clout, to be able to normalize agreements, and get the product and service off the mark,” Stankey said.

He said AT&T’s continued push of wireless distribution and high-speed Internet, helped more than pave the way toward consumer adoption of HBO Max.

“We had a strong belief that we could help our domestic connectivity business significantly,” Stankey said. “And that started us down the path of the direct-to-consumer evolution.”

The executive contends Max will help AT&T expand high-speed Internet and fiber connections in markets around the world.

“Our connectivity business is kind of captive to the United States for the most part,” Stankey said. “And as a result, when you start looking at the opportunity to grow a fantastic subscriber base … we kind of look at this and say, ‘it’s time to unleash the media assets to go and seize, you know, multi $100 billion opportunity and become one of the premier assets for distributing content,'” he said.

Discovery CEO David Zaslav will be tasked with operating WarnerMedia and Discovery+, the latter the five-month-old SVOD service featuring largely reality-based DIY programming. Stankey contends the combined companies’ synergies can help fund growth in the new OTT video business.

“It’s a deeper content library that can carry forward. And it brings exactly some of that heft in the international side of things, [which is] going to be necessary to scale up [Max and Discovery+] worldwide.”

Discovery CEO David Zaslav Exits Lionsgate Board

On the heels of hammering out control of WarnerMedia from AT&T, Discovery CEO Davis Zaslav has announced he is leaving his seat on the board of directors of Lionsgate, effective immediately.

Zaslav’s resignation is not the result of any disagreement with Lionsgate on any matter relating to its operations, policies or practices, according to the May 19 regulatory filing.

Also leaving the board is businessman David Sanchez, nephew of media mogul John Malone, who replaced his uncle on the board in 2018.

Zaslav’s departure comes after he signed a six-year extension to remain CEO at Discovery through 2027. He is also heading the combined media assets of WarnerMedia and Discovery following the latter’s $43 billion majority stake purchase of the former Time Warner, which includes Warner Bros., Turner and HBO. Current WarnerMedia CEO Jason Kilar is reporting planning his exit strategy after little more than a year on the job.

Lionsgate, along with Paramount Pictures, is seen as a potential acquisition target due to its deep movie and TV show content portfolios and streaming assets. Lionsgate operates the Starz pay-TV platform, as well as multiple Starz-branded streaming services. Paramount+, of course, is the brand name of the former CBS All Access SVOD platform owned and operated by ViacomCBS.

 

CEO Jason Kilar Reportedly Seeking WarnerMedia Exit

WarnerMedia CEO Jason Kilar reportedly was kept out of the loop until near the end of AT&T’s announced $43 billion spin-off of the former Time Warner to Discovery Inc.

With Discovery CEO David Zaslav in charge of the new unnamed company, Kilar, who joined WarnerMedia only last year, is looking to exit the company and his contract, according to The New York Times, which cited sources familiar with the situation.

Kilar’s name was noticeably missing from the May 17 morning press release announcing the mega merger, despite both Zaslav and AT&T CEO John Stankey heaping praise on the former co-founder/CEO of Hulu.

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“Jason is a fantastic talent,” Zaslav said on the conference call. Kilar also likes to be charge, especially when it involves streaming video and digital distribution. Kilar exited Hulu in 2013 after five years when he felt a loss of control on senior management decisions.

Earlier this month, Kilar cited as his biggest regret at Hulu his inability to convince Hulu co-owners, which included 20th Century Fox, Disney, Comcast/NBCUniversal and later Time Warner, the wisdom of global distribution.

“I think it’s totally fair to bash, candidly, Hulu’s lack of global footprint that could have been possible starting in 2008,” Kilar said on the MoffettNathanson Media & Communications Summit.

“This is ultimately a global business. I think it was very hard for the board members of Hulu to feel that this new, small thing called Hulu was going to disrupt their existing businesses across the globe. Now, that happened anyway because of Netflix and others, so that’s why I regret it.”