New Disney-Charter Deal ‘Contemplates’ Disney+ Access

Chalk up another positive for Disney+: The Walt Disney Co.’s much-hyped new subscription video-on-demand (SVOD) service, set to launch in November, may be available to Charter Communications subscribers.

A new distribution deal between Disney and Charter, announced Aug. 14, calls for the country’s No. 2 cable operator to continue carrying Disney’s TV and ESPN programming to Spectrum TV subscribers.

The deal also “contemplates Charter’s future distribution of Disney’s streaming services, including Hulu, ESPN+ and the soon-to-be-launched Disney+,” according to a press release issued by Charter.

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The deal wouldl help Disney+ in its attempt to compete with established streaming titans Netflix and Amazon.com.

In addition, Spectrum TV will also offer customers access to ESPN’s upcoming ACC Network when it launches Aug. 22.

Under the deal, Spectrum TV will continue to provide its customers widespread access to ABC, Disney Channel, Disney Junior, Disney XD, Freeform, ESPN, ESPN2, ESPN3, ESPNU, ESPNEWS, ESPN Deportes, ESPN Goal Line, ESPN Bases Loaded, SEC Network, Longhorn Network, and the newly acquired networks of FX, FXX, FXM, Fox Life, National Geographic, Nat Geo Wild, Nat Geo Mundo and BabyTV.

“This agreement will allow Spectrum to continue delivering to its customers popular Disney content, makes possible future distribution by Spectrum of Disney streaming services, and will begin an important collaborative effort to address the significant issue of piracy mitigation,” said Tom Montemagno, EVP of programming acquisition for Charter.

Sean Breen, SVP of Disney Media Distribution, added: “Our new agreement with Charter allows us to continue serving Spectrum TV customers with the full value of the Walt Disney Television and ESPN networks, including the newly acquired FX and Nat Geo networks. ACC fans can also rest assured that they will be able to watch their favorite teams on Spectrum, one of the largest distributors across the ACC footprint, when ACC Network launches next week.”

Disney to Bundle Disney+, ESPN+ and Hulu for $12.99, on Par with Netflix

With costs increasing exponentially as Disney prepares for the Nov. 12 launch of a branded subscription streaming video service (Disney+), CEO Bob Iger on the company’s Aug. 6 fiscal call disclosed an aggressive pricing strategy aimed at Netflix.

In addition to offering Disney+ for $6.99 monthly, the media giant will bundle the SVOD with ESPN+ and Hulu for $12.99 — about on par with the most popular Netflix subscription.

“Nothing is more important to us than getting this right,” Iger said on the call.

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Indeed, with Disney not projecting a profit from Disney+ for five years, costs associated with the rollout and assimilation of 100% ownership of Hulu continue to escalate.

Disney’s Direct-to-Consumer & International segment increased Q3 operating loss to $553 million from an operating loss of $168 million during the previous-year period. Revenue increased from $827 million to $3.85 billion.

And Wall Street isn’t impressed as Disney shares are down almost 4% in aftermarket trading.

AVOD Service Tubi Targets Netflix, Hulu in Outdoor Branding Campaign

Tubi, the San Francisco-based ad-supported streaming video service, has rolled out what it says is its largest-ever outdoor branding campaign.

Beginning Aug. 5, billboards and high-res images, including, “Dear Netflix, I had my first freesome last night. Tubi was amazing,” and “Dear Hulu, I was with Tubi last night, but I only watched,” will be on display along high-traffic locations in New York, Los Angeles, Chicago and Detroit.

The creatives are a tongue-in-cheek campaign that takes into account the price hikes of current and growing number of soon-to-be-launched streaming services (i.e. Disney+, Apple TV+, HBO Max, etc.) in the coming year.

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Tubi says its marketing campaign comes at a time when consumers are experiencing “subscription fatigue,” contending AVOD offers premium streaming for free.

Other banners include, “Dear Netflix, I didn’t think you’d find out. I streamed Tubi last night”; “Dear Hulu, you’re cool and all, but I couldn’t take my eyes off Tubi last night”; and “Dear NYC. You free tonight? Because we are.”

Tubi features more than 15,000 library movies and television series from more than 200 content partners, including Warner Bros., NBC Universal, MGM and Lionsgate, among others.

The service in June announced that its monthly users topped 20 million in May with more than 94 million hours of content consumed.

As part of the campaign, San Francisco-based Tubi said it would take to the skies — which it apparently did in a midday flyover of Netflix’s Sunset Boulevard office in West Hollywood.

HOLLYWOOD, CALIFORNIA Photo by Jerod Harris/Getty Images for Tubi

 

 

Analyst: Marvel/Disney+ to Help Disney Double Earnings by 2024

Expect an increase in Marvel-related content by Disney across all distribution channels, including the branded $6.99 Disney+ subscription streaming video platform launching on Nov. 12.

The latter strategycould lead to Disney doubling its earnings by 2024, according to Benjamin Swinburne, analyst at Morgan Stanley.

Indeed, Marvel Studios – not Disney – was on major display at the recent San Diego Comic-Con 2019.

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The studio’s panel presentation featured surprise appearances by Oscar winners Natalie Portman and Mahershala Ali touting their separate roles in upcoming movies (Thor: Love and Thunder and Blade) reportedly generated some of the confab’s biggest buzz.

To Swinburne, Marvel’s outsized presence on Disney+ could help double Disney’s stock earnings from $6.50 per share in fiscal 2020 to upwards of $12 per share in 2024.

“For all the complexities of Disney’s business model transition and the stock’s investment case, the durability of its content underpins everything,” Swinburne wrote in a note.

Specifically, the analyst contends Marvel has successfully transcended the narrowly defined superhero genre to mass appeal.

Swinburne cites this year’s theatrical release Avengers: Endgame, last year’s release, Captain Marvel, and pending Disney+ exclusives, “The Falcon and The Winter Soldier,” starring Anthony Mackie, Sebastian Stan and Daniel Brühl; “WandaVision,” featuring Elizabeth Olsen and Paul Bettany; “Loki” with Tom Hiddleston, and “Hawkeye,” starring Jeremy Renner, among others, as proof of Marvel’s expanding impact on Disney investors.

With Disney+ targeting 60 million to 90 million subs globally by 2024, the analyst contends more than 60% of that subscriber base will come from Marvel’s growing worldwide appeal.

“Marvel has broken beyond fanboy demand to mass market,” Swinburne wrote, adding the aforementioned streaming series will “lock in Marvel fans between theatrical releases.”

AT&T Boss: HBO Max to Offer Live Sports, News — in the Future

HBO Max, WarnerMedia’s pending subscription streaming service, will “ultimately” offer live sports and news, in addition to original and catalog programming, Randall Stephenson, CEO of parent AT&T, told investors.

Speaking July 24 on the fiscal call, Stephenson said the branded OTT service would be revealed in further detail to investors in a presentation on the Warner studio lot in Burbank, Calif., on Oct. 29.

“You should assume that ultimately HBO Max will have … live sports and premium sports,” Stephenson said. “Those are going to be really, really important elements for HBO Max. The same with news.”

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The live programming and sports elements would significantly differentiate HBO Max from Netflix, Amazon Prime Video, Disney+ and Hulu, which cater to original and catalog programming.

AT&T CEO Randall Stephenson

In fact, Netflix remains adamant it will not offer live sports, a market Prime Video dabbles in with Major League Baseball and Premier League soccer in the United Kingdom.

WarnerMedia, the media successor to Time Warner, last week revealed the management team behind HBO Max, which is slated to launch in Spring 2020.

While banking on the HBO brand, the streaming service will borrow liberally throughout the WarnerMedia business portfolio, which includes Turner and Warner Bros.

Indeed, Turner has pay-TV carriage license agreements with MLB, the NBA and NCAA March Madness men’s national championship tournament. How those contracts would relate to HBO Max remains to be seen. But Stephenson doesn’t see a problem.

“There’s a lot of opportunity to take advantage of the unique content deals that we have within WarnerMedia,” he said.

The CEO said the recently-ended HBO series “Game of Thrones” significantly increased HBO digital subscribers – a trend he hopes will continue with Max.

“HBO Max will be a key part of this wireless strategy as we get into next year pairing unique premium video content with our wireless, TV and broadband business,” Stephenson said. “[It] is going to be something special in the marketplace. And the implications of that to profitability, we think, are pretty important.”

 

 

Disney Names Justin Connolly President of Media Distribution, Combines Units

The Walt Disney Co. will combine all of its media sales and channel distribution into one organization under Justin Connolly, who has been named president of Media Distribution. Based in New York, Connolly will report to Kevin Mayer, chairman of Disney’s Direct-to-Consumer and International segment.

Connolly’s appointment comes just days after the abrupt departure of Disney veteran Janice Marinelli from her position as president of Global Content Sales & Distribution for The Walt Disney Company’s Direct-to-Consumer & International (DTCI) segment, ending a 34-year career at the media giant.

“By combining all of our media, affiliate, content and syndication sales, and distribution efforts into the Direct-to-Consumer and International segment, we continue to transform the ways in which we distribute the great stories and characters created by The Walt Disney Company’s studios and media networks,” said Mayer in a statement. “I’ve had the great pleasure of working with Justin for many years and believe his experience makes him well-suited to drive Disney’s media sales and distribution efforts. He is a consummate professional, a fantastic dealmaker, and a great leader.”

“I am excited to have the opportunity to lead the industry’s best multi-platform sales and distribution teams,” said Connolly in a statement. “Through our combined efforts we will achieve the company’s vision for an even stronger, more agile organization that is better able to pivot and capitalize on the many opportunities present in today’s fast-changing and increasingly complex global marketplace.”

In his new role, Connolly will spearhead global app distribution deals for Disney’s direct-to-consumer streaming services — including Disney+, ESPN+ and Movies Anywhere. Connolly will also be responsible for the distribution of film and television programming via home entertainment, broadcasting platforms, digital platforms, SVOD and pay networks.

He will continue to oversee all aspects of North American distribution, affiliate marketing and affiliate-related business operations for all the services provided by Disney and ESPN media networks including, among other services: ESPN, ESPN2, ESPNEWS, ESPN Deportes, ESPNU, SEC Network, ACC Network, Disney Channel, Disney Junior, Disney XD, Freeform, FX, FXX, FXM, National Geographic and Nat Geo Wild, and related WATCH, HDTV, video-on-demand, interactive television and retransmission consent agreements for Disney’s eight-owned ABC stations. He will also continue to have oversight of the ABC Affiliate Relations and Marketing team.

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To ensure alignment between content licensing and direct-to-consumer priorities, a Disney release stated Connolly will work closely with DTCI’s international content sales teams who now report directly into their respective regional leaders. Connolly will have final approval on all content sales agreements for Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, 20th Century Fox Film, Fox Animation, Disneynature, ABC Studios, ABC Entertainment, National Geographic, FX Productions, 20th Century Fox Television, WABC, Freeform, Disney Channel, Disney XD and Disney Junior.

Connolly previously served as EVP, affiliate sales and marketing, Disney and ESPN Media Networks — overseeing all aspects of domestic distribution, ABC affiliate relations, affiliate marketing and affiliate-related business operations for all the services provided by Disney and ESPN media networks. In June 2017, he added oversight of ESPN’s strategy and business development teams to his portfolio.

Prior to that, Connolly served as SVP, college networks, and under his direction, SEC Network was the most successful network launch in cable history. Before working with the college networks, Connolly served as SVP, national accounts for Disney & ESPN Media Networks. He was responsible for all domestic distribution and licensing efforts for Disney’s linear networks, broadband and VOD content within the Media Networks Group.

He joined ESPN in 2003 and served in various capacities including director, ESPN strategy and operations, where he helped ESPN with its long-term affiliate negotiations. In August 2004 he was promoted to VP, distribution strategy. Prior to joining ESPN, Connolly worked in the corporate finance group for Disney’s corporate treasury department in Burbank, Calif.

Connolly, a Boston native, graduated from Harvard University with a Bachelor of Arts degree in Economics in 1998 and earned an MBA from Harvard Business School in 2003.

Disney’s Direct-to-Consumer and International segment includes Disney’s international media operations stretching from Europe to Asia to Latin America and the company’s direct-to-consumer streaming businesses, including Hulu, Hotstar, ESPN+, and the upcoming Disney+ service set to debut in the United States Nov. 12. DTCI also houses global advertising sales and ad technology for Disney media properties, which include ABC, ESPN, Freeform, FX Networks, National Geographic, and the Disney Channels. The company’s media distribution operations — including global distribution of film and TV content to Disney+, Hulu and other third-party platforms, as well as Movies Anywhere — are also part of the Direct-to-Consumer & International business segment.

EMA Event Spotlights Digital Delivery

The over-the-top market is exploding, and the Entertainment Merchants Association this year at its annual Los Angeles conference gave it a starring role.

The OTT_X conference, focusing on the OTT market, ran July 16-17 concurrent with the eighth annual Los Angeles Entertainment Summit presented by the EMA. In addition to OTT panels and spotlight presentations, the EMA facilitated OTT business meetings in addition to meetings scheduled for LAES participants. The joint event attracted about 400 attendees.

The new focus is part of a bigger shift for the EMA.

“It was really apparent last year that the event needed to change,” said EMA CEO and president Mark Fisher July 16 in opening remarks, adding “as the industry changes so does the EMA.”

“We’ve intentionally shed our support and income from the video game segment,” he said, to be more focused. The organization has also shed physical retail members and distributors.

“It’s a pivot,” he said, but “we’re not going to leave behind the TVOD space.”

A leader in that transactional VOD market, FandangoNow chief Cameron Douglas, also chair of the EMA board, noted the annual confab “used to be an event with meetings between retailers and studios.”

Now, the EMA, via its Ultimate Movie Weekend promotion, is promoting cooperation between studios and digital retailers.

“Who would have thought there would be a major studio backed campaign — except Fox and Disney — that was focused on rental instead of EST,” Douglas said.

Erick Opeka, president of Cinedigm Digital Networks and chair of the OTT_X  conference, explained the name in opening remarks.

“The X in the name really reflects the core mission of why we’re all here today,” he said. “It’s an exchange. First and foremost, it’s an exchange of ideas.”

Such collaboration is crucial in an era of fast digital disruption.

“These changes are happening so frequently and at such a precipitous pace, the only way we can come out of this is by fostering a community,” he said.

Key challenges for OTT video platforms are customer acquisition and retention, monetization and content discovery, according to speakers at OTT_X.

Having original content is one way OTT platforms are meeting these challenges, said presenter Kathi Chandler-Payatt, executive director and entertainment analyst, The NPD Group. Using Netflix Originals as a case study, she noted that while both original movies and episodic shows are a small percentage of content on Netflix, they garner an outsized share of viewing. Originals made up 16% of new seasons vs. licensed in 2019, but those originals garnered a prodigious 24% of minutes watched. The same holds true for original movies, which are 11% of content and 22% of minutes.

Part of the reason for the uptake of originals is preferential marketing, she noted.

“It’s very smart from a platform perspective to push originals,” she said because the platform owns it. Thus, making a show with Netflix may give content producers a leg up in discovery.

“People think content is king, but discovery is king,” she said.

Originals have a short window to prove themselves, she said. She quoted Netflix VP of originals Cindy Holland as saying that the service generally knows within 28 days whether a new show or season meets Netflix’s expectations in terms of audience reach. In addition to viewership during that period, metrics such as season completion also figure in renewal.

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OTT_X event chair Opeka moderated the panel “Monetization Trends in OTT.” Ad-supported VOD streaming services, such as Xumo, whose CEO Colin Petrie-Norris was on the panel, are ascendant, many speakers noted. Xumo has 160 curated channels and 40 million households in the United States, Petrie-Norris said.

AVOD “can generate very high yield per consumer” with advertising, he said.

Tubi chief content officer Adam Lewinson also cited the growth of AVOD in a keynote presentatoin. AVOD aggregator Tubi has 20 million monthly active users, with 100 million minutes streamed in June and well over 15,000 titles or 44,000 hours of content, “more than double the content volume of Netflix,” he said. June yielded its largest revenue month ever, he said.

“AVOD is for real,” he said.

There are challenges, however.

“The biggest challenge in streaming right now … in all VODs, it’s really about customer acquisition, retention and churn,” he said. “A subset to that is content discovery. Once you crack those problems, that’s when you get to scale.”

A seamless experience on the platform is also “incredibly important,” he said, “just having a seamless experience where the tech fades away.”

“You also want to be ubiquitious,” he said. “You do want to be everywhere that people are streaming.”

Tubi has also employed machine learning in its proprietary content personalization engine.

“The more data that we have on our viewers the more we are able to personalize,” he said.

A key advantage to AVOD is the “barrier to entry is so low” because viewers don’t have to pay, he said.

As for Tubi getting into original programming like its paid SVOD counterparts, “we have no intention of going down that road,” he said. “It’s tremendously competitive. You wind up overpaying for content.”

There is already too much content, he noted.

“Original series are just whizzing by at an epic pace,” he said.

That doesn’t mean Tubi isn’t willing to spend on content.

“I have a nine-figure content budget for the year, and we’re spending it,” he said.

On a panel about windowing of content, Paul Colichman, CEO of Here Media, said he was “worried that [AVOD is] the emperor’s new clothes,” a false hope of a monetary savior, noting the amount of revenue that trickles down to content producers who license their titles to such services is small.

Still, competition from increased content is pushing content owners to find new outlets.

“It used to take years for us to put up content on AVOD,” said Cinedigm’s Natasha Pietruschka, adding that now, “Where else can we fill those revenue gaps?”

Transactional digital retailers took the stage during the LAES session. Panelists noted that since consumers are paying directly for content, whether for rental or purchase, the key concern for TVOD platforms is making that experience seamless and easy and the quality top notch.

“The bar is so high because you have paid specifically for that title whether rental or purchase,” said FandangoNow’s Douglas, who was on the transactional panel. “It better play.”

He said FandangoNow has concentrated on making the viewing experience top-quality with extensive 4K offerings and a living room app that rivals any.

While Redbox has made its name on physical disc rentals, Chris Yates, GM of Redbox On Demand, said the new digital sales and rental arm doesn’t cannibalize that core business, it supplements it. It offers a choice when consumers don’t want to go to a kiosk and has resulted in “improved affinity for our brand,” he said.

Speakers at both events discussed the looming launch of new SVOD services, including Walt Disney Co.’s $6.99 Disney+.

Disney is “out in front of the others,” said IHS Markit’s Sarah Henschel during a research presentation. Awareness of the service jumped from 24% in Q1 to 35% in Q2 even before the Disney marketing machine really gets rolling, she said.

The firm expects upcoming services to add 36.7 million paying domestic subs by 2023.

“I think Disney and Apple [with its pending SVOD service Apple TV+] have a leg up because they are already consumer facing brands,” Henschel said. “Disney has the strongest hold in my opinion right now.”

When asked how many in the audience would buy the new service when it launches, the majority of attendees raised their hands.

Disney’s Pending Streaming Video Service Has Broad Consumer Awareness in the U.S. – Less So in the U.K.

Disney’s upcoming Nov. 11 launch of branded subscription streaming video service, Disney+, has been the media company’s primary focus in 2019.

New data from a survey of 2,500 Internet users in the United States by GlobalWebIndex found 35% of respondents cite remakes and sequels of noted Disney film brands for wanting to subscribe to Disney+.

Most coveted sequels include The Lion King (50%), Frozen II (34%) and Star Wars: The Rise of Skywalker (29%).

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More than 60% are willing to pay upwards of $20 monthly for the new $6.99 service, with 71% expecting Disney+ will offer family-friendly programming.

Other drivers include Pixar (46%), nostalgic content from childhood (42%), Marvel (38%) and exclusive content exclusive to the platform (38%).

Meanwhile, across the pond in the United Kingdom, consumer awareness of Disney+ is less evident.

The same study found just 35% of respondents in the region were aware of the platform. Of those who knew about it, about 51% said they would be willing to pay £10 monthly ($12.40) — about half what respondents said they currently pay for all combined over-the-top video services.

Indeed, 71% of potential Disney+ subs currently subscribe to Netflix and another 37% use Amazon Prime Video. Of Netflix U.K. subs, 25% said they would try Disney+.

“With Pixar proving most appealing among content that could entice consumers to subscribe to Disney Plus, the recent success of Toy Story 4 in the box office will give Disney a lot of confidence in their ambition to win a strong foothold in the U.K. video streaming market,” Chris Beer, senior trends analyst at GlobalWedIndex, said in a statement. “The most important focus for the new service will be paying close attention to the content demands of its diverse, family-oriented audience.”

Disney Shuttering FX+ Streaming Service

To make room for its pending Disney+ subscription streaming video service and global expansion of Hulu, Disney — as expected — has begun informing subscribers that 20th Century Fox’s FX+ streaming service will shut down Aug. 21.

Launched in 2017 as a $6 monthly add-on to pay-TV subscribers, Disney says FX+ viewers can still access catalog programing and catch-up shows on the FXNow app or at FXNetworks.com.

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With Disney’s $71.3 billion acquisition of 20th Century Fox, merger synergies are affecting more than Fox personnel. And Disney clearly is putting its resources behind Disney+ and Hulu, which it now owns outright.

That much was clear during Fox’s upfront presser in May.

“I think the possibilities of a platform like Hulu are much more exciting to us in the long run than trying to scale up a stand-alone version,” John Landgraf, CEO of FX, told the media. “It really expands the dimensions and what we can do.”

Analyst: Demand for Disney+ Streaming Service Stronger Than Expected

Disney’s branded subscription streaming video service, Disney+, is launching on Nov. 12.

Wall Street investment bank UBS is the latest to jump on the self-serving bandwagon championing the pending Netflix rival.

The research firm said that 43% of respondents in an internal survey said they were interested in subscribing to the $6.99 Disney+ service. That tops UBS’ previous 20% to 30% market penetration prediction by 2030 for Disney+.

“Marketing for the service has yet to hit critical mass,” analyst John Hodulik wrote in a note.

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Morgan Stanley projects the SVOD service could help Disney generate more than 130 million subscribers when combining Disney+ with ESPN+ and Hulu.

Analyst Ben Swinburne contends Disney+ will have upwards of 90 million subs within five years, including 13 million subs by the end of 2020.

“We believe the market has often overstated the risk and underappreciated the reward of the transition to streaming,” Swinburne wrote in a June 13 note. “Investing in Disney shares is a play on the durability of its IP.”