Netflix’s ‘Boss Baby,’ ‘The Crown’ Top TV Time Charts

Netflix’s “Boss Baby: Back in Business” was the top rising show and the service’s “The Crown” was the top binge program on the TV Time charts for the week ended Nov. 22.

“The Crown,” season four of which debuted Nov. 15, chronicles the continuing saga of the British royal family with the addition of a new princess, Diana, and the marital problems that ensue with her husband and heir to the throne Prince Charles. It also follows the friction between Prime Minister Margaret Thatcher (Gillian Anderson) and Queen Elizabeth II (Olivia Colman). The series took the bronze on the rising show chart.

Coming in behind ABC’s long-running medical drama “Grey’s Anatomy” at No. 3 on the binge chart was “The Queen’s Gambit,” which debuted on Netflix Oct.  23. The limited series is a coming-of-age story following a young Beth Harmon (Anya Taylor-Joy), abandoned and entrusted to a Kentucky orphanage in the late 1950s, who discovers an astonishing talent for chess while developing an addiction to tranquilizers provided by the state as a sedative for the children. Netflix Nov. 23 announced that 62 million  households had watched “The Queen’s Gambit” in its first 28 days, making it the service’s biggest limited series ever.

Top rising show “Boss Baby: Back in Business,” season four of which hit Netflix Nov. 17, is a computer-animated series produced by DreamWorks Animation that is a follow-up to the 2017 film The Boss Baby, based on the book by Marla Frazee.

Hulu’s “Animaniacs” is a reboot of the beloved 1990s animated series. It debuted Nov. 20 and features the original cast voices.

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TV Time is a free TV viewership tracking app that tracks consumers’ viewing habits worldwide and is visited by more than 1 million consumers every day, according to the service. The weekly “Binge Report” ranks shows with the most binge sessions. A binge session is when four or more episodes of a show are watched and tracked in the app in a given day. The “Shows on the Rise” chart is calculated by determining the week-over-week growth in episodes watched for a given program. The network displayed is the network where the show first aired (e.g. “Friends” on NBC).

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Top Binge Shows Week Ended Nov. 22 by Share of Binges:

  1. “The Crown” (Netflix) — 5.72%
  2. “Grey’s Anatomy” (ABC) — 2.24%
  3. “The Queen’s Gambit” (Netflix) — 2.22%
  4. “Modern Family” (ABC) — 1.66%
  5. “How to Get Away With Murder” (ABC) — 1.58%
  6. “The Office” (NBC) — 1.41%
  7. “Friends” (NBC) — 1.38%
  8. “One Piece” (Fuji TV) — 1.35%
  9. “Dash & Lily” (Netflix) — 1.33%
  10. “Supernatural” (The CW) — 1.26%

 

Top “Shows on the Rise” Week Ended Nov. 22 by Rise Ratio:

  1. “The Boss Baby: Back in Business” (Netflix) — 95.9%
  2. “Animaniacs” (Hulu) — 94.2%
  3. “The Crown” (Netflix) — 76%
  4. “FBI” (CBS) — 74.9%
  5. “Wizards of Waverly Place” (Disney Channel) — 64.1%
  6. “Star Wars: The Clone Wars” (Disney+) — 45.3%
  7. “NCIS” (CBS) — 40.6%
  8. “His Dark Materials” (BBC One) — 35%
  9. “Ethos” (Netflix) — 30.8%
  10. “Adventure Time” (Cartoon Network) — 27.8%

Hulu Bowing $1.99 Monthly Promo at Midnight on Thanksgiving Through Cyber Monday

Hulu is set to launch a discounted $1.99 monthly promotion at midnight on Thanksgiving. The campaign pledges to give new and returning subscribers 12-month access to the ad-supported Hulu option, which amounts to a $48 savings over the recently reduced $5.99 monthly fee (from $7.99). The ad-free subscription plan remains priced at $11.99 monthly.

Hulu added 6.9 million subs to reach 32.5 million subs through Sept. 30 — up 27% from the previous-year period.

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Hulu’s ad-supported plan gives subscribers access to Hulu’s streaming TV library of shows such as “Family Guy,” “Law & Order: SVU” and “Golden Girls,” films like Trolls World Tour and Hulu Originals, including “Pen15,” “Little Fires Everywhere,” “Ramy,” “Animaniacs” and “The Handmaid’s Tale,” for a more than 66% savings compared the cost of a regular subscription.

New or returning subs can sign up for the limited time offer through 11:59pm PT on Cyber Monday (11/30) at Hulu.com. Disney, which owns Hulu, is also marketing the ad-supported option with Disney+ and ESPN+ for $12.99 monthly.

 

Streaming Wars: Big-Money Upstarts Battle Established Leaders

It has been a calamitous year on many fronts due to COVID-19. And yet the global pandemic, with its stay-at-home orders and shuttering of movie theaters, has been a boon for streaming video services such as Netflix and Disney+, the two leaders of opposing factions now doing battle for viewership — and subscriber dollars.

There are now seven major subscription VOD services, counting the rebranding of ViacomCBS’s CBS All Access into Paramount+ early next year.

Netflix, along with Amazon Prime Video and Hulu, represent the old guard, established streamers with healthy track records and steady, progressive growth. Disney+, which only launched in November 2019, leads a quartet of high-profile newcomers — Apple TV+, HBO Max, NBCUniversal’s Peacock and, soon, Paramount+ — seeking to unseat the incumbents by grabbing a dominant share of the spoils.

And the SVOD pie is getting bigger. Hub Entertainment Research found the average person is accessing 60% more streaming video services in 2020 than they did in 2018, while 90% of households with children living at home subscribe to more than one OTT video service.

“We’ve seen the number of providers per [survey] respondent rise to an all-time high during the pandemic,” analyst Jon Giegengack said. “The average respondent had 4.8 services. That was going up anyway, but the pandemic turbocharged it.”

Leading the way: Netflix. Long a favorite on Wall Street, the SVOD market co-creator (with Roku) again this year quieted would be critics with outsized subscriber growth (projected 34 million additions through the end of the year), strong financials (revenue up 25% to $18.35 billion through the first nine months of this year) and weekly chart-topping content.

“We’ve been doing high 20s [in millions of net adds per year] for four years,” co-CEO Reed Hastings said on the company’s most recent fiscal webcast. “And this year [we are] setting all kinds of records,” he noted, adding that increased revenue translates into more content spending, which “tends to generate more sub growth over time.”

Indeed, while Netflix may have fallen short of its own sub growth projections in the quarter ended Sept. 30, in many ways Q3 was a solid quarter, particularly in terms of retention, according to Parrot Analytics. The data analytics company said the effects of the “extraordinary” operating conditions caused by the pandemic are still benefiting Netflix.

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Several demand metrics relevant to subscriber retention, such as the demand decay rate, are trending upward, according to Parrot. This shows that Netflix is improving on measures that keep subscribers coming back for more. Netflix, in its shareholder letter, noted that “retention remains healthy.”

A study by Bank of America Securities found churn among Netflix subs (not renewing) during the pandemic has dropped significantly. That is an improvement from the 4% monthly churn Netflix experienced prior to the coronavirus.

“Viewer loyalties are shifting as subscriptions to traditional pay-TV services decline,” said Steven Nason, research director at Bank of America Securities. “The average Netflix subscriber has had the service over 50 months … all other services have much shorter subscription histories.”

That loyalty was tested following backlash to Cuties, an award-winning French movie about pre-teen girls in a Paris dance troupe, which threatened to explode Netflix churn, and worse. The service continues to find itself in the crosshairs of a criminal prosecution in the state of Texas.

“It’s a film that is very misunderstood with some audiences, uniquely within the United States,” co-CEO Ted Sarandos said during the virtual French MIPCOM confab in October. “The film speaks for itself. It’s a very personal coming-of-age film; it’s the director’s story and the film has obviously played very well at Sundance without any of this controversy, and played in theaters throughout Europe without any of this controversy.”

Wells Fargo analyst Steven Cahall said he believes that while the controversy may have cost Netflix 2 million North American subs in Q3, the decline was short-lived.

“We think the [issue] and elevated churn was essentially a flash in the pan,” Cahall wrote.

Wedbush Securities media analyst Michael Pachter called the criminal indictment “idiotic,” arguing the case is a First Amendment issue that
Netflix should win easily.

“The case has no merit at all,” Pachter said.

Indeed, the day after the district attorney in Tyler County, Texas, issued a statement explaining his motive for filing charges against Netflix, shares of the company increased nearly 6%.

“Netflix should remain the dominant SVOD player for the foreseeable future,” wrote Pivotal analyst Jeffrey Wlodarczak.

Naturally, Hastings agrees. The executive characterized the pandemic’s impact on the OTT video industry as a one-time phenomenon. Hastings said Netflix continues to compete against myriad other entertainment distractions, including TikTok, YouTube and video games, among others. He said Netflix user engagement, subscriber churn and related trends remain on par with what management expected a year ago.

“There was temporary learning when there was no [live] sports, but it’s like, well, it [wasn’t] really that interesting of a finding because it’s just not relevant to the [non-pandemic] world,” Hastings said. “Now we’re back in a world with partial [TV] sports and that’s fine and we’re [still] growing.”

In November, Netflix began testing a linear channel in France streaming original programs like an old-school TV channel without a DVR. Available only to subscribers and on the website, the channel could be Netflix’s eventual foray into ad-supported content. With nearly 200 million subs worldwide, Netflix’s challenge is to sustain viewer interest.

“The limiter for us is what’s the quality of our service, how many nights can you say, ‘Oh my God, I want to go to Netflix and watch the next show?’” Hastings said.

Rising Tide Lifts All Streamers

To put Netflix’s meteoric year into perspective is to understand that 2020 has been a banner year for OTT video, including ad-supported VOD. That’s because there’s been a wave of opportunity spurred by a captive audience sequestered at home. The year saw the table set among streaming competitors with Fox Corp.’s $440 million acquisition of AVOD service Tubi and the launches of WarnerMedia’s HBO Max and NBCUniversal’s Peacock.

ViacomCBS will launch a reboot of CBS All Access, dubbed Paramount+, for global access in 2021. Peacock became the first SVOD platform to offer a free ad-supported VOD option at launch. Max is slated to bow an AVOD option in 2021.

ViacomCBS CEO Bob Bakish said Paramount+ would separate itself from other SVOD services by streaming the NFL, SEC college football, UEFA soccer, PGA Golf, live national CBS News and local affiliates, as well as news show “60 Minutes,” among others.

“It’s going to be a truly differentiated and compelling offering that’s unlike anything that’s really out there today,” Bakish said.

The lone anomaly: Quibi, the mobile-streaming SVOD app launched in early April by DreamWorks Animation founder Jeffrey Katzenberg and former HP boss Meg Whitman that lasted just six months before it was announced it was shutting down. The service targeted mobile-device users with original programming from five minutes to 10 minutes in length — and was backed by a $1.75 billion war chest. Despite the hype and big-name talent (Anna Kendrick, Chrissy Teigen, Christoph Waltz and Liam Hemsworth, among others) associated with content production, few consumers opted in beyond the free trial period.

Analysts suggested just 8% of initial free Quibi trial users converted to paying subs in the first month. Katzenberg, in media interviews over the summer, attributed the sluggish start to the coronavirus pandemic, maintaining that many potential subscribers were stuck at home watching TV instead of streaming video on their mobile devices. Quibi didn’t help itself at launch when content was available only on portable devices and not televisions.

The app lasted just a fraction as long as Verizon Communications’ $1 billion mobile-based video misstep, go90, which shuttered in 2018 after three underwhelming years.

Trendsetters

Like most markets, first movers typically hold the advantage. OTT video is no different as viewership on Netflix, YouTube and Amazon Prime Video accounted for 64% of the time consumers spent on Internet-connected TVs in July, according to Comscore. When adding Hulu and Disney+ to the mix, the five apps accounted for 83% of all streaming video consumption. The data underscores the fact that the TV ecosystem has embraced digital platforms, with streaming video at the center of an ever-more-dynamic path to content distribution.

There’s more good news ahead. Despite approaching market saturation, the number of U.S. SVOD subscriptions is projected to climb from 203 million in 2019 to 317 million by 2025, according to Digital TV Research. Even Netflix, with 12 years of service under its belt, is projected to add 10 million domestic subs in the period. This growth is overshadowed by projected gains at newcomer Disney+ (27 million sub additions) and Hulu’s expanding profile (22 million). Peacock, HBO Max and CBS All Access/Paramount+ will each add more subs than Netflix during the period, according to DTV Research. The six platforms will account for 82% of the 114 million total U.S. subscriber additions. Separately, All Access and sister service Showtime OTT ended the Sept. 30 fiscal period with nearly 18 million combined subs — up 72% year-over-year from 10.4 million.

“The depth of choice in the U.S. will not be replicated in any other country,” said analyst Simon Murray. “Eight U.S. platforms will have more than 10 million paying subs each by 2025.”

Murray predicts that SVOD subscriptions will increase by 529 million worldwide through 2025 to 1.17 billion. By 2025, one-third of the world’s TV households will have at least one SVOD subscription — up from a quarter at the end of 2019. China and the United States together will account for 51% of the global total. This is down from 63% in 2019 — suggesting SVOD growth in other countries is growing quickly.

Direct-to-Consumer Push

Disney in its Nov. 12 fiscal call reported that Disney+ had reached  73.7 million global subs, well ahead of company projections on the one-year anniversary of the service’s launch. It had passed 60 million in August. Thanks to a global brand, the service is expected to be the biggest SVOD mover in subscriber growth over the next five years, generating 142 million subs between 2019 and 2025 to reach 172 million, according to Digital TV Research. Netflix, by comparison, will add 91 million subscribers to total 263 million.

“We believe that Disney+ will have a huge impact,” said analyst Simon Murray.

At the same time, Murray lowered his Disney+ sub forecast through 2025 by 30 million, contending the streamer’s June results showed a deceleration of sub additions following international launches in the United Kingdom, Ireland, Germany, Austria, Italy, France, Spain and Switzerland. The service is also available in Australia, New Zealand, Holland and Puerto Rico.
Disney+ will roll out in Latin America beginning on Nov. 17.

“We expect this trend to be repeated elsewhere,” Murray said.

Indeed, with Disney+ now a year old, many subscribers who received free 12-month service deals as part of a Verizon promotion will have to start paying or cancel the service. Some analysts contend the Verizon promotion accounts for 15% of Disney’s subscribers. To stave off a possible uptick in churn, Disney just launched the second season of “Star Wars” spinoff “The Mandalorian,” in addition to original series “The Right Stuff” and The Lego Star Wars Holiday Special movie, among other content.

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Keeping consumers interested in Disney+ remains a priority for CEO Bob Chapek and key investors as much of the company’s business units remain idle due to the coronavirus pandemic. In a recent letter to Chapek, minority stake holder Dan Loeb said he wanted the board to re-direct annual dividends to content spending on Hulu, ESPN+ and Disney+.

“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote Chapek. “The ability to drive subscriber growth, reduce churn and increase pricing present the opportunity to create tens of billions of dollars in incremental value for Disney shareholders in short order, and hundreds of billions once the platform reaches larger scale.”

Chapek continues to put digital distribution at the core of his corporate strategy. In October, Chapek formed a new Media and Entertainment Distribution group, led by Kareem Daniel, that is tasked with putting a “focus on developing and producing original content for the company’s streaming services.”

That move was preceded by Disney moving erstwhile Pixar Animation feature film Soul from the theatrical slate to Disney+ for Dec. 25 access. The film was previously scheduled for theatrical release on Nov. 20. Mulan, another Disney release intended for theaters, became the studio’s first “premier access” VOD experiment, affording Disney+ subs the ability to pay $29.99 to access the film months before it was due to become available on the service.

In crossing the PVOD line in the sand, Chapek dealt a major blow to exhibitors who had come to count on Disney movies luring moviegoers and concession sales. It was just over a year ago that Disney’s market share of the domestic movie box office reached 35% ($1.88 billion) — surpassing the next two studios combined.

“Over the last six months, marketplace conditions created by the ongoing pandemic, while difficult in so many ways, have also provided an opportunity for innovation in approaches to content distribution,” Disney said in a statement. “The Disney+ platform is an ideal destination for families and fans to enjoy a marquee Pixar film in their own homes like never before.”

Separately, ESPN+ added 6.8 million subs in the quarter to bring its total to 10.3 million. Hulu added 6.9 million subs to reach 32.5 million, up 27% from the previous-year period. Online TV service Hulu with Live TV added 1.2 million subs to end the period with 4.1 million. Disney ended the period with 120.6 million combined subscribers to its OTT platforms.

“The real bright spot has been our direct-to-consumer business, which is key to the future of our company,” Chapek said.

Hulu Eyeing Disney+ Future?

Long a runner-up to Netflix and Amazon Prime Video, Hulu has quietly increased subscribers while majority-owner Disney directs much of its focus to Disney+. More than three-quarters (78%) of all U.S. households have a subscription to Netflix, Prime Video and/or Hulu, according to the Leichtman Research Group. That’s up from 69% in 2018, and 52% in 2015. More than half (55%) of U.S. households now have more than one of these SVOD services, an increase from 43% in 2018 and 20% in 2015.

Hulu, over the summer, began offering a new discounted yearly plan for current subscribers to its $5.99 per month plan. Subscribers to that ad-supported plan have the option to get a one-year subscription for $59.99, or 12 months for the price of 10. The option will roll out to new ad-supported Hulu subscribers later this year, the company announced.

But to what end? Disney, under former CEO Bob Iger, had planned to expand Hulu overseas. But with Disney+ already doing that — including launching co-branded service with Disney-owned Star in India in 2021, Hulu’s international trajectory seems unsure. Indeed, a planned Hulu strategy meeting regarding international expansion was never held, according to Bloomberg, which cited sources familiar with the situation.

“In terms of the general entertainment offering internationally, we want to mirror our successful Disney+ strategy by using our Disney+ technical platform, bringing in content we already own and distributing it under a successful international brand that we also already own, which is, of course, Star,” Chapek told investors in August.

‘Coming 2’ Free Shipping

Amazon Prime Video made news in October when it reportedly paid $125 million to Paramount Pictures for streaming rights to the Eddie Murphy sequel Coming 2 America. The movie, featuring original headliners Murphy and Arsenio Hall, in addition to co-stars Tracy Morgan, Wesley Snipes, Leslie Jones and Jay Pharaoh, is slated to bow on Prime Video March 5, 2021. The 1988 original Coming to America was a blockbuster for Paramount, generating $128 million at domestic screens and $288 million worldwide, just behind Who Framed Roger Rabbit and Rain Man.

Amazon has been relatively quiet on content spending in 2020 compared with rivals Netflix, Disney+, HBO Max and Apple — reportedly on the hook for “only” $6 billion this year before the coronavirus hit. The Paramount deal represented another high-profile transaction for Amazon Studios under the direction of Jennifer Salke, following agreements for Sasha Baron Cohen’s second “Borat” flick and Dave Bautista’s My Spy.

Yet the movies mask an original content slate that saw just seven TV shows trickle out of Amazon through three fiscal quarters, including, most recently, the dystopian drama “Utopia.” By comparison, Netflix released more than 70 original programs through Oct. 9.

“The pace in which Amazon releases content does not place it in close competition with other streaming services,” Wedbush Securities’ Michael Pachter wrote in a note. “However, most of the 105 million Prime members did not sign up specifically for video content, but rather for the free shipping, and to enjoy movies and TV shows as an added perk to the service.”

Speaking on a recent fiscal call, CFO Brian Olsavsky said the number of Prime members who stream Prime Video outside the U.S. grew by more than 80% year-over-year in the third quarter, and international customers more than doubled the hours of content they watched on Prime video compared with last year. Prime Video expanded globally in 2016 to more than 200 countries.

While Prime Video, like Netflix, remains ad-free, Amazon is not turning its back on ad-supported content and incremental revenue opportunities. The company owns and operates ad-supported IMDb TV and is working with third-party apps on Fire TV for advertising opportunities.

“We’re seeing some good momentum with [AVOD],” Olsavsky said. “I won’t say too much about what we’ll look like next year, but that gives you kind of sense of priorities where we’re spending our time and focused on.”

‘Max’ Challenges

Backed by a $4.8 billion content war chest, HBO Max aims to expand the HBO brand beyond its usual offering of niche series such as “True Detective” and “Game of Thrones,” with the “Harry Potter” movies; cartoon libraries from Looney Tunes, Merrie Melodies and Hanna-Barbera; original movies, TV shows and multi-topic podcasts; and re-runs of “Friends,” the iconic sitcom for which WarnerMedia “paid” itself (Warner Bros. Television) $425 million for exclusive streaming rights.

But there remains a problem. Max’s goal to secure 50 million new subscribers by 2025 remains optimistic, as app adoption among existing HBO subscribers remains sluggish. The service has generated just 8.6 million new subs through Sept. 30, despite the fact that more than 30 million existing HBO subs qualified for a free Max upgrade.

Max and HBO totaled 38 million combined subs through Sept. 30 when factoring in existing HBO subs able to access Max (for free) via third-party pay-TV operators. They had 36.2 million combined subs on July 23, exceeding the year-end goal of 36 million. Domestic HBO and Max subscribers do not include customers who are part of a free trial. The lack of sub growth at Max is glaring, considering rival Disney+ generated 22 million sign-ups in its first four weeks. A leading culprit hindering Max sub growth could be an ongoing stalemate with Roku and Amazon over placement of the Max app on their respective platforms.

The app is available on Apple, Google and Samsung devices, but not yet on Roku or Amazon Fire TV devices or connected TVs. This severely impacts Max since the two services combined are the primary way 70% of consumers connect to streaming video services, according to Comscore. Fire TV, with 40 million registered users, and Roku, with more than 43 million, are key platforms for the survival of third-party SVOD services. Indeed, Max predecessor HBO Now generated the bulk of its 8 million subs through Prime Channels, Fire TV and Roku. The platforms typically take a cut of subscription revenue, in addition to controlling user data — requirements WarnerMedia reportedly dislikes.

The imbroglio resulted in launch confusion whereby an HBO pay-TV subscriber, or HBO Now/HBO Go user, automatically upgraded to Max, but could only watch catalog content unless separately downloading and registering on the Max app.

“We believe Amazon looks at that consumer experience as subpar and overly complicated. And we agree,” Rich Greenfield, analyst with Lightshed Partners, said in a note.

Regardless, AT&T management says Max consumer engagement is 60% higher than for SVOD predecessor HBO Now.

“We continue to grow and scale Max, with total domestic HBO and Max subscribers … well ahead of our expectations for the full year,” said AT&T CEO John Stankey. The telecom giant has spent $2 billion on the launch of Max.

While Stankey put a positive spin on sub growth, activation figures underscore Max’s ongoing struggle to capture consumers. New subs were only about twice that of Netflix’s sluggish Q3 sub additions, which ended the quarter with 195 million paid subs.

WarnerMedia CEO Jason Kilar said he believes Max sub growth is not a sprint win in the first 24 hours of launch, but rather a steady progression over the course of a marathon.

“If you look at last year at where we hoped we would be at the end of 2020, which is 36 million HBO and Max subscribers … obviously the number is going up every day,” said Kilar.

The former Hulu co-founder, who was hired in April to jumpstart Max-based initiatives across Warner Bros., HBO and Turner, brought in former Hulu colleagues (Jean-Paul Colaco to head sales; Andy Forssell as GM of direct-to-consumer) while cleaning house companywide. In August, Kilar cut about 500 positions at Warner Bros., with plans to eliminate another 20% of the WarnerMedia workforce. Through it all, analysts say Max’s impasse with Amazon and Roku, and confusing consumer options stand out as missteps in a market dominated by Netflix, Disney+, Hulu and Prime Video.

“There’s a reasonable shot that AT&T management will screw up HBO Max as a SVOD competitor,” said Pivotal’s Wlodarczak.

Peacock Spreads Its Wings

When NBCUniversal’s Peacock and Roku announced an agreement enabling the former’s app placement on the Roku platform, it was a big win for the industry’s newest SVOD service. The deal followed months of  negotiations that saw Peacock (like HBO Max) enter the market without distribution on Roku and Amazon Fire TV — both must-have distribution points in the OTT video ecosystem.

“Roku customers are engaged streamers, and we know they’ll love access to a wide range of free and paid content,” Maggie McLean Suniewick, president of business development and partnerships at Peacock, said in a statement.

The agreement came on the heels of Comcast chairman and CEO Brian Roberts disclosing Peacock had attracted 15 million subscribers (without Roku distribution) since launching nationwide in July. A closer look revealed that most of the subs opted for the free ad-supported option, featuring more than 13,000 hours of content.

“That’s 50% more subs than just six weeks ago,” Roberts said in September at the virtual Goldman Sachs 29th Annual Communicopia Conference. The CEO said the convergence of entertainment distribution between media and tech companies across multiple platforms has become a reality — driven by broadband and streaming video.

“We saw this coming and feel we are one of the best companies to play offense in this environment,” Roberts said.

In addition to current-season programming from NBC and Telemundo, Peacock offers access to Universal Pictures movies and live sports, including Premier League soccer and the delayed 2020 Tokyo Olympics.
“Across the board, we’re better than expectations,” Jeff Shell, CEO of NBCUniversal, said on Comcast’s most-recent fiscal call. “We didn’t expect this many sign-ups, we didn’t expect people to come back as frequently as they’re coming back, and we didn’t expect people to watch as long as they’re watching once they come back.”

Apple TV+ Battles Negative Media Mojo

Since its launch a week before Disney+ in 2019, Apple TV+ has struggled to achieve the same media support afforded Disney’s SVOD platform. Despite Apple’s record market valuation of $2 trillion, Apple TV+ is viewed by some observers as an ongoing missed opportunity. The $4.99 monthly service was recently judged as having the worst content (60%), the least amount of variety (64%) and the most unfriendly user interface (64%), according to a Flixed.io survey of 1,300 respondents. By comparison, the same respondents hailed Netflix for the best content (89%), content variety (88%), user interface (85%) and viewing recommendations (69%).

Bernstein analyst Toni Sacconaghi estimates that fewer than 10 million people have signed up for the free 12-month Apple TV+ subscription in the company’s most-recent fiscal quarter. He characterized the tally as “surprisingly low” for a brand as well-known as Apple. The company hasn’t officially released any video subscriber data. Apple just announced it would extend the free Apple TV+ trial period 90 days through 2021 for new Apple device consumers.

Research firm Antenna said Apple realized a 10% spike in new subs from March 14 to 16 as the coronavirus spread in the United States. The firm said the increase was the lowest of any major streaming service. Apple was reported to be spending $6 billion on original content in 2020 (before COVID-19), buttressing an original slate that includes “The Morning Show,” “Dickinson,” “See,” “Ghostwriter,” “For All Mankind,” “Helpsters,” “Hala” and “Little America,” among others.

“[Apple is] still not in [OTT video] with both feet,” media executive Barry Diller told a podcast. “They’ve put some capital in, but relatively little [for Apple]. They’re not making a major effort.”

Wedbush Securities analyst Michael Pachter contends that despite a major marketing effort around Apple TV+, the finished product thus far has been wanting.

“Apple TV+ only has a handful of original shows and no catalog,” Pachter said.

AVOD Comes of Age

Subscription streaming video’s rival, advertising-supported VOD, continues to gain traction among consumers — and advertisers. New data from eMarketer suggests AVOD revenue will grow more than 25% in 2020 compared to 2019.

The AVOD market, which is spearheaded by The Roku Channel, Hulu, Peacock, Redbox TV, IMDb TV, Pluto TV and Tubi, among others, saw ad revenue leap 31% to $849 million in the most-recent quarter, according to MoffettNathanson Research.

“AVOD advertising benefited from heightened usage and a mix shift in advertising budgets to OTT platforms, growing sizably in the quarter,” Nathanson wrote in a note.

Speaking Aug. 20 on the DEG: The Digital Entertainment Group Mid-Year 2020 Digital Media Entertainment Report webcast, Nathanson called AVOD the underreported streaming video story of the year. He said AVOD’s 28% market share behind Netflix and the other services reinforces the idea free access to VOD is gaining the most traction among consumers.

“That 28% of streaming minutes is where we think the streaming wars are actually happening,” Nathanson said.

With four of the five AVOD platforms owned by major media conglomerates, much of the ad growth is likely due to shifting third-party ad dollars from linear TV to connected televisions. The 31% rise in AVOD revenue among the top platforms compares with an estimated 28% decline in national broadcast and cable TV ad spending in Q2, according to eMarketer.

Eric Haggstrom, forecasting analyst at eMarketer, said he believes that while marketers are warming to AVOD, much of the revenue revolves around media giants pushing advertisers to proprietary streaming platforms.

“Some advertisers who bought ads in the TV network upfronts are shifting money within the same media company to streaming services,” Haggstrom said.

Indeed, Tubi earlier this year added all episodes of Fox’s “Gordon Ramsay’s 24 Hours to Hell and Back,” in addition to 300 hours of separate Ramsay content, which includes “Hell’s Kitchen,” “Kitchen Nightmares” and “The F Word.”

“Making this show available on Tubi, alongside Gordon’s other series, will only grow his footprint while also further promoting his programs on Fox,” said Rob Wade, president of alternative entertainment and specials at Fox Entertainment.

Tubi also added Fox’s music competition show “The Masked Singer.”

Ampere Analysis found that nearly one in five U.S. Internet users are using AVOD. Citing Q3 data, the London-based research firm said 17% of domestic Internet households used one or more AVOD services in the prior month, up from 13% in the previous-year period.

“The VOD market continues to expand and fragment, offering viewers more choice of platforms,” Minal Modha, consumer research lead at Ampere, said in a statement. “Free ad-funded platforms will find themselves well-positioned to attract an audience that is either unable or unwilling to pay for multiple subscriptions.”

The growth in AVOD seemingly contradicts some consumer sentiment about too much advertising on broadcast television. Ampere found that 44% of consumers surveyed in the U.S. said they don’t mind seeing advertising on TV.

Interestingly, Ampere doesn’t believe AVOD and SVOD are competing for the same audiences. Active AVOD users, according to Modha, tend to be older than SVOD subscribers, and are more likely to be from lower-
income households. About 25% of AVOD users are between the ages of 45 and 54, compared with 22% of SVOD viewers. And 19% of AVOD users are between the ages of 55 and 64, versus 14% of SVOD subscribers.

Nearly half of U.S. AVOD users have an annual household income of less than $30,000 per year, compared with a third of SVOD users. Almost 20% of AVOD viewers live in households with annual earnings of less than $15,000 per year.

“With distinct audiences, we believe that these two offerings aren’t competing directly with each other but rather can coexist,” Modha said. “We have seen some companies offer both a free and paid-for tier, such as Prime Video and IMDb TV, Hulu and Peacock. In the current climate, with both economic uncertainty and a greater need for people to stay at home, we expect the use of AVOD services to continue to rise as more consumers will be turning to these platforms as they seek entertainment without increasing their financial outlay.”

Parks: Netflix Top SVOD Service in 2020

Despite renewed competition from Disney+ and upstarts HBO Max and NBCUniversal’s Peacock, industry pioneer Netflix remains the top SVOD service, according to Parks Associates.

Dallas-based Parks said that recent entrants such as HBO Max, Apple TV+, and Disney+ have re-arranged the Top 10 list. Sling TV dropped out of the list, and with MLB.tv falling off as well, ESPN+ is the only sports-based service in the list. Despite all these changes, the Top 3 included pioneers Netflix, Amazon Prime Video, and Hulu. Parks noted that NBCUniversal’s Peacock is starting to make inroads in terms of paid subscriptions, but currently the base for that service is mainly comprised of users of the free ad-supported tier.

 

“For many years, Netflix, Prime Video and Hulu have ruled the top of the subscription-based OTT service space,” Research director Steve Nason said in a statement. “However, with newer entrants and expanded offerings, that trend may be about to change. The Big 3 and their main challengers have gone to market with varying content and distribution strategies, with the same goal in mind: reach elusive consumers with a compelling content offering and user experience to be a foundational essential service in an OTT subscriber’s service stack.”

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Parks Associates’ OTT Video Market Tracker tracks the content offerings, business strategies, and subscription numbers for OTT services in North America. The research firm reports that 78% of U.S. broadband households subscribe to at least one OTT service, up from 71% the previous year. The new report evaluates the emergence of new SVOD services recently launched and their potential impact on the market penetration and revenue of the current dominant services.

“The Walt Disney Company announced 10 million subscribers upon initial launch, which put Disney+ as fourth on the list, where it has remained for almost a year,” Nason said. “That shows how difficult it will be for any service to break into the ‘Big 3’ for OTT services. Partnerships are essential. For example, HBO Max will get a boost from its deal with Amazon to roll out its service on Amazon Fire TV devices.”

 

‘A Teacher,’ ‘The Queen’s Gambit’ Top TV Time Charts

FX’s “A Teacher” was the top rising show and Netflix’s “The Queen’s Gambit” was again the top binge program on the TV Time charts for the week ended Nov. 15.

“A Teacher,” available on Hulu beginning Nov. 10, is a drama series examining the complexities and consequences of an illicit sexual affair between a young teacher (Kate Mara) and her student (Nick Robinson).

“The Queen’s Gambit,” which debuted on Netflix Oct.  23, is a coming-of-age story following a young Beth Harmon (Anya Taylor-Joy), abandoned and entrusted to a Kentucky orphanage in the late 1950s, who discovers an astonishing talent for chess while developing an addiction to tranquilizers provided by the state as a sedative for the children.

TV Time is a free TV viewership tracking app that tracks consumers’ viewing habits worldwide and is visited by more than 1 million consumers every day, according to the service. The weekly “Binge Report” ranks shows with the most binge sessions. A binge session is when four or more episodes of a show are watched and tracked in the app in a given day. The “Shows on the Rise” chart is calculated by determining the week-over-week growth in episodes watched for a given program. The network displayed is the network where the show first aired (e.g. “Friends” on NBC).

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Top Binge Shows Week Ended Nov. 15 by Share of Binges:

  1. “The Queen’s Gambit” (Netflix) — 2.78%
  2. “Dash & Lily” (Netflix) — 2.49
  3. “Grey’s Anatomy” (ABC) — 2.04%
  4. “How to Get Away With Murder” (ABC) — 1.87%
  5. “Modern Family” (ABC) — 1.82%
  6. “The Office” (NBC) — 1.47%
  7. “Friends” (NBC) — 1.43%
  8. “One Piece” (Fuji TV) — 1.38%
  9. “Supernatural” (The CW) — 1.09%
  10. “Lucifer” (Netflix) — 1.05%

 

Top “Shows on the Rise” Week Ended Nov. 15 by Rise Ratio:

  1. “A Teacher” (FX) — 99.9%
  2. “Balthazar” (TF1) — 92.2%
  3. “His Dark Materials” (BBC One) — 79.9%
  4. “Uomini e donne” (Canale 5) — 73.4%
  5. “NCIS: New Orleans” (CBS) — 68.9%
  6. “Manifest” (NBC) — 65.5%
  7. “S.W.A.T.” (CBS) — 64.5%
  8. “Undercover” (een) — 59.5%
  9. “NCIS: Los Angeles” (CBS) — 56.9%
  10. “Station 19” (ABC) — 52.5%

Nielsen: Netflix Up ‘Schitt’s Creek’ for Second Straight Week

Rank Service Title Number of Episodes Minutes Streamed (in Millions)
1 Netflix “Schitt’s Creek” 80 1,456
2 Netflix “The Haunting of Bly Manor” 9 1,175
3 Netflix Hubie Halloween 1 969
4 Netflix “The Office” 192 862
5 Amazon “The Boys” 16 752
6 Netflix “Emily in Paris” 10 676
7 Netflix “Greys Anatomy” 361 668
8 Netflix “The 100” 100 664
9 Netflix “Criminal Minds” 277 656
10 Netflix “The Blacklist” 152 644
Source: Nielsen SVOD Content Ratings (Amazon Prime, Disney+, Hulu, and Netflix), Nielsen National TV Panel, U.S. Viewing through Television.

Hulu Acquires U.S. Rights to ‘Happiest Season’

Streaming service Hulu has acquired U.S. rights to Clea DuVall’s holiday romantic comedy Happiest Season, which will debut as a Hulu Original film on Nov. 25.

Sony Pictures and eOne co-financed the film and will retain distribution rights in Canada and the rest of the world. Overseas plans, including potential theatrical releases, will be finalized in the coming weeks.

The film stars Kristen Stewart, Mackenzie Davis, Alison Brie, Aubrey Plaza, Daniel Levy, Mary Holland, Burl Moseley, Victor Garber and Mary Steenburgen. In the film, when Abby (Stewart) learns that Harper (Davis) has kept their relationship a secret from her family, she begins to question the girlfriend she thought she knew.

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“This holiday season — more than any other — we could all use a little happiness. It was essential to Sony Pictures and to the filmmakers that Clea’s marvelous and fresh holiday-themed romantic comedy come out when the lights are on the trees,” Nicole Brown, president of TriStar Pictures, said in a statement. “We are excited that Hulu is geared up to make this happen in the U.S. and grateful that they love the movie as much as we do.”

“With its all-star cast and modern storytelling, Happiest Season brings yet another breakthrough film to Hulu that we know our viewers will love,” Brian Kendig, Hulu director of content acquisition, said in a statement. “We are honored to be the streaming home of this fresh and funny romantic comedy that explores love, family and acceptance this holiday season.”

“I am beyond grateful to Hulu for providing an incredible home for Happiest Season, and I’ll forever cherish my journey with Sony Pictures who felt just as strongly as I did about the value of bringing the first major LGBTQ+ holiday rom-com to audiences,” writer-director DuVall said in a statement. “I’m hopeful that this universal story, told through a unique lens, will join the long list of holiday classics that continue to bring all of us so much joy and happiness.”

Disney Reorganizes With Focus on Streaming Video

With much of its business units idled due to the coronavirus pandemic, Disney CEO Bob Chapek Oct. 12 announced internal restructuring that puts the focus on what is working: streaming video.

Kareem Daniel

Disney is combining ad sales with distribution into a new Media and Entertainment Distribution group led by Kareem Daniel, who has served as president of consumer products, games and publishing. The media giant said the move is to put a “focus on developing and producing original content for the company’s streaming services.”

The new group will be responsible for all monetization of content — both distribution and ad sales — and will oversee operations of the Company’s streaming services. It will also have sole P&L accountability for Disney’s media and entertainment businesses.

This means that while Alan Horn and Alan Bergman, Peter Rice, and James Pitaro will continue to lead Disney’s studios, general entertainment and amusement parks, respectively, they will do so separate from streaming video.

Rebecca Campbell

Rebecca Campbell, who headed direct-to-consumer operations, which includes Disney+, ESPN+, Hulu, and pending Disney+ Hotstar, was upped to chairman of international operations and direct-to-consumer. All five executives report directly to Chapek, with Campbell reporting directly to Daniel.

“Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” Chapek said.

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The CEO said separating content creation from distribution would allow Disney to be more effective in making the content consumers want most, delivered in the ways they prefer it, i.e. over-the-top video, transactional VOD and PVOD.

Indeed, Disney+ had more than 60 million subscribers in August. The bundle of Disney+ with Hulu and ESPN+ has 105 million.

“Our creative teams will concentrate on what they do best–making world-class, franchise-based content — while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including the coming Star international streaming service,” Chapek said.

“It’s a tremendous privilege to work with the talented and dedicated teams that will comprise this group, and I look forward to a close collaboration with the outstanding and incredibly successful team of creative content leaders at the company, as together we build on the success we’ve already achieved in our DTC and legacy distribution business,” Daniel said in a statement.

A 14-year Disney veteran, Daniel has held leadership positions across a variety of businesses, including consumer products, games and interactive experiences, publishing, studio distribution, and Walt Disney Imagineering. Prior to that, Daniel was VP of Distribution Strategy at Walt Disney Studios, where he worked closely with the leadership in developing the company’s film content distribution strategy across multiple platforms and played a key role in the commercialization of the studio’s films.

“As we now look to rapidly grow our direct-to-consumer business, a key focus will be delivering and monetizing our great content in the most optimal way possible, and I can think of no one better suited to lead this effort than Kareem,” Chapek said. “His wealth of experience will enable him to effectively bring together the company’s distribution, advertising, marketing and sales functions, thereby creating a distribution powerhouse that will serve all of Disney’s media and entertainment businesses.”

Disney reports fourth-quarter (ended Sept. 30) fiscal earnings Nov. 5.

Activist Investor Urges Disney to Increase SVOD Spending

Billionaire investor Daniel Loeb continues to see opportunity in the pandemic-throttled entertainment sector — most notably at The Walt Disney Co.

Loeb’s Third Point Management, which has more than $10.8 billion in assets, has spent much of the COVID-19 era buying up a depressed Disney stock undermined by amusement park and cruise ship closures, and waylaid studio releases, among other issues, that were reportedly costing the company $30 million in daily overhead.

Now Loeb, who is one of Disney’s largest single investors, is calling on Disney CEO Bob Chapek and the board not to authorize the company’s annual $3 billion dividend — a surprising stance considering most activist investors implore companies to give back more to stock holders; not less.

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In an Oct. 7 letter to Chapek, Loeb wants the board to re-direct dividend funds to content spending on Hulu, ESPN+ and Disney+, the latter Disney’s high-profile subscription streaming video-on-demand platform the investor contends has a legitimate shot at usurping market behemoth Netflix — both in subscribers and content.

“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote. “The ability to drive subscriber growth, reduce churn, and increase pricing present the opportunity to create tens of billions of dollars in incremental value for Disney shareholders in short order, and hundreds of billions once the platform reaches larger scale.”

Specifically, the investor contends Disney+ has largely outdistanced subscriber growth projections by offering classic Disney, Pixar and “Star Wars” movies, with little spent on original programming except for “The Mandalorian,” among other content. Disney ended the most-recent fiscal period with more than 60.5 million subscribers. The company had originally projected 60 million to 90 million subs by 2024.

Indeed, while Disney is spending about $1 billion on original content in 2020, Netflix is reportedly spending nearly $17 billion, with plans to spend upwards of $28 billion by 2028.

“A more aggressive content roadmap will distinguish Disney as the only traditional U.S. media company able to thrive in a world beyond the box office and the cable TV ecosystem, alongside digital-first businesses like Netflix and Amazon,” Loeb wrote.

Hulu Launches Watch Party Promo for ‘Pen15’ Season Two Premiere

To celebrate the Sept. 18 premiere of season two of “Pen15,” for the next 10 days, Hulu users will be able to stream the Emmy-nominated comedy together through a series-branded Hulu Watch Party feature.

In keeping with the theme of the show, the Watch Party experience resembles a classic online chat room, complete with screen names taken from the series.

Viewers can launch the Hulu Watch Party through the details page for the series on Hulu.com. Clicking on the Watch Party icon will trigger a shareable link that a user can then share with their friends or family. Hulu Watch Party supports up to eight people per session and viewers must be 18 years of age or older to access the feature.

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Viewers can also call 1-855-HULU-FAN to hear a pre-recorded conversation between the show’s lead characters Maya and Anna. Callers can listen in on a conversation between the two best friends, provide their cell phone number when prompted and receive a link to download a digital pack complete with Zoom backgrounds, GIFs, exclusive behind-the-scenes footage and phone wallpapers. Fans (who are 18 years or older) can dial 1-855-HULU-FAN starting at 11 a.m. PT/2 p.m. ET through Sept. 30.