Roku Bowing 23 New Original (Quibi) Programs Aug. 13

Roku Aug. 9 announced a new slate of Roku Originals will be available to stream on The Roku Channel beginning Aug. 13. The lineup features 23 titles, including four all-new premieres, available exclusively on the free ad-supported platform in the U.S., Canada and the U.K. 

The series come from shuttered streaming service Quibi, whose 75-program portfolio Roku reportedly acquired for around $100 million earlier this year. Among programs launching are the Emmy-nominated show “Mapleworth Murders from writers Paula Pell, John Lutz and J.B. Smoove.

“While it’s only been a few months since the launch of Roku Originals, the response has been overwhelming,” Brian Tannenbaum, head of alternative programming at Roku, said in a statement.

Pell said making “Mapleworth Murders” was a “glorious crime procedural romp through a field of pure nutbaggery.”

“We are so incredibly excited that … millions of viewers can watch a lesbian spinster and dipstick sheriff and deputy try to solve some of the most ridiculous daily murders in an otherwise charming town,” Pell said. “Full disclosure, we wrote almost all of it in a melatonin twilight.”

Roku Originals continue to help drive strong viewer engagement for The Roku Channel since its launch in May. The top five streamed TV programs by unique view on The Roku Channel this summer (from May 20 to July 18) were all originals. The Roku Channel saw strong growth with streaming hours more than doubling year-over-year in Q2 2021. According to Nielsen streaming reach ratings for the month of June, The Roku Channel was the No. 6 streaming channel by household reach in America, coming in after Disney+, Hulu, Amazon, YouTube and Netflix.

The complete lineup: “&Music,” “The Andy Cohen Diaries,” “Benedict Men,” “Elba vs. Block,” “Eye Candy,” “Fierce Queens,” “Floored,” “Gone Mental with Lior,” “Mapleworth Murders,” “Memory Hole,” “Nice One!,” “Nikki Fre$h,” “Run This City,” “The Sauce,” “Sex Next Door,” “Singled Out,” “Skrrt with Offset,” “Squeaky Clean,” “The Stranger,” “Survive,” “Thanks a Million” (Season 2), “What Happens in Hollywood” and “Wireless.”

Roku Launching Original Talk Show With Demi Lovato

Roku June 29 announced that the original series “The Demi Lovato Show” will premiere on The Roku Channel on July 30. Lovato promises a lineup of celebrity guests and experts addressing some of today’s edgiest social topics. The new show will be the first of more than a dozen former Quibi shows rebranded “Roku Originals” to premiere on the ad-supported The Roku Channel.

Each 10-minute episode features a special guest and covers topics including activism, feminism, gender identity, sex and body positivity, mental health, and even interplanetary visitors. Episode guests will be announced at a later date. ​​

“Some conversations can be difficult, but I’ve never been one to shy away from speaking candidly about things,” Lovato said in a statement.

Lovato said the show aims to create a space that normalizes living “your own truth,” where guests can speak, engage and learn together.

“There’s something therapeutic about having raw discussions that people can relate to and with,” Lovato said.

Brian Tannenbaum, head of original alternative programming at Roku, said the times call for a talk show like Lovato’s.

“There’s never been a better time to have honest, frank discussions in a fun, approachable and unfiltered format,” he said.

Roku recently announced performance updates relating to Roku Originals in the first two weeks following its May launch. The Roku Channel has seen record growth this year, reaching U.S. households with an estimated 70 million people in Q1 2021. Roku expects to release an additional 45 Roku Originals this year to complement The Roku Channel’s expansive library of 40,000+ free movies and television programs and 190+ live linear channels already offered to viewers.

Launched in 2017, The Roku Channel licenses and distributes content from more than 175 partners. In addition to Roku devices, The Roku Channel is available on Web, iOS and Android devices, Amazon Fire TV and select Samsung TVs and can be accessed internationally in the U.S., Canada and the U.K.

The Roku Channel to Debut 30 ‘Roku Originals’ on May 20

Roku May 13 announced it will debut Roku Originals on the Roku Channel on May 20, a.k.a. “Streaming Day,” which commemorates the launch of the very first Roku streaming player (with Netflix) in 2008.

The originals, which Roku acquired from shuttered SVOD app Quibi, features 30 titles, including award-winning scripted series, such as “Die Hart,” #FreeRayshawn” and “Reno 911!”; documentaries, such as “Blackballed” and “Big Rad Wolf”; and alternative and reality programming, including “Punk’d” and “Chrissy’s Court.”

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“The launch of Roku Originals will bring incredible, premium entertainment that has breadth, depth and diversity to the millions of streamers who regularly visit the Roku Channel and to many new viewers who may not even have a Roku device,” Sweta Patel, VP of engagement growth marketing, said in a statement.

Programs available on May 20 include:

  • “#FreeRayshawn”
  • “About Face”
  • “Bad Ideas with Adam Devine”
  • “Barkitechture”
  • “Big Rad Wolf”
  • “Blackballed”
  • “Centerpiece”
  • “Chrissy’s Court”
  • “Cup of Joe”
  • “Die Hart”
  • “Dishmantled”
  • “Dummy”
  • “Fight Like a Girl”
  • “Flipped”
  • “The Fugitive”
  • “Gayme Show”
  • “Iron Sharpens Iron”
  • “Last Looks”
  • “Let’s Roll with Tony Greenhand”
  • “Most Dangerous Game”
  • “Murder House Flip”
  • “Murder Unboxed”
  • “Nightgowns”
  • “Prodigy”
  • “Punk’d”
  • “Reno 911!”
  • “Royalties
  • “Shape of Pasta”
  • “Thanks a Million”
  • “You Ain’t Got These”

Roku will debut additional shows on the Roku Channel later this year.

“As the Roku Channel grows, we will continue to be even more creative and expansive in sourcing content that will perform well in an advertising-supported streaming model,” Patel said.

Roku Unveils ‘Roku Originals,’ Repurposing Quibi Content to The Roku Channel

Roku April 21 announced that the content from its Quibi acquisition in January will be re-branded as “Roku Originals,” and will be launched on The Roku Channel. “Roku Originals” will also be the brand name for future original programming for The Roku Channel for viewers in the U.S., the U.K. and Canada. Additional details on the launch of Roku Originals will be shared in May.

More than 75 Roku Originals, including a dozen unreleased series, will debut for the first time this year. The addition of Roku Originals comes at a time of incredible growth for The Roku Channel, which reached U.S. households with an estimated 63 million people in Q4 2020, up more than 100% year-over-year.

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“We’re [are introducing a] diverse portfolio of entertainment under the Roku Originals brand [that’s] relevant, fun and thought-provoking TV that has something for everyone,” Sweta Patel, VP of engagement growth marketing at Roku, said in a statement.

Roku Originals join The Roku Channel’s lineup of more than 40,000 free movies and programs and 165+ free live linear television channels. The Roku Channel licenses and distributes content from more than 175 partners. In addition to Roku devices, The Roku Channel is available on Web, iOS and Android devices, Amazon Fire TV and select Samsung TVs, and can be accessed internationally in the U.S., Canada and the U.K.

Roku Acquires Quibi’s Global Content Distribution Rights

Roku Jan. 8 announced that its ad-supported branded streaming platform, The Roku Channel, will become the exclusive home to more than 75 shows and documentaries shuttered SVOD service Quibi created in conjunction with Hollywood studios and production companies. Roku acquired the exclusive global distribution rights to the award-winning shows and will make the content available for free to all Roku users.

Following an internal restructuring by Quibi, Roku acquired Quibi Holdings, LLC, the company that holds all of Quibi’s content distribution rights. Financial terms of the transaction were not disclosed.

Launched last April by DreamWorks Animation founder Jeffrey Katzenberg and eBay founder Meg Whitman, the $1.75 billion-backed service featuring short-form video no longer than 10 minutes, announced after just six months it was ceasing operations — citing in part consumer indifference.

The Quibi content includes Emmy award-winning scripted series, alternative and reality programming and documentaries featuring stars such as Idris Elba, Kevin Hart, Liam Hemsworth, Anna Kendrick, Nicole Richie, Chrissy Teigen, and Lena Waithe. In addition to the full range of titles that had previously premiered on Quibi, more than a dozen new programs will make their exclusive debut on The Roku Channel.

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The Roku Channel is the AVOD home for free and premium news and entertainment and in Q4 2020 reached U.S. households with an estimated 61.8 million people. The Roku Channel experienced rapid growth in Q4 2020 doubling household reach year over year and was a top 10 channel in both streaming hours and active accounts.

The transaction aims to deliver a distinctive array of premium content geared towards the highly coveted 18-35 age demographic, further building out The Roku Channel’s lineup of more than 40,000 free movies and programs and 150 free live linear TV channels.

“The Roku Channel is one of the largest and fastest growing channels on our platform today and we are consistently expanding the breadth and quality of our free, ad-supported content for our users,” Rob Holmes, VP of programming at Roku, said in a statement. “Today’s announcement marks a rare opportunity to acquire compelling new original programming that features some of the biggest names in entertainment.”

“Quibi championed some of the most original ideas and inventive storytelling, and I’m so proud of what I was able to create for the platform,” said Veena Sud, creator, writer, director and executive producer of the series “The Stranger.”


Roku Looking to Acquire Quibi Content

Quibi, the short-lived subscription streaming video platform shuttered after six months last year, is reportedly in discussions with Roku to sell its catalog of original short-form video.

Launched by DreamWorks Animation founder Jeffrey Katzenberg and eBay founder Meg Whitman last April with a $1.75 billion war chest, Quibi targeted millennials seeking original content less than 10 minutes in length on their portable devices, and featuring stars such as Anna Kendrick, Liam Hemsworth and Sophie Turner, among others. The service in October announced it was shutting down after attracting fewer than 1 million subs.

Roku would use programs such as “Most Dangerous Game,” “Dummy,” “Murder House Flip,” “Eye Candy” and “Chrissy’s Court” — the latter two staring Chrissy Teigen, the former Sports Illustrated Swimsuit Issue model — as viewer lures to the Roku Channel, according to The Wall Street Journal, which first reported the potential deal.

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Content and money is king to Roku, which remains a major consumer gateway to both subscription and ad-supported third-party video platforms. Roku has sought acquiring rights to content a component of distribution agreements with recent SVOD services such as WarnerMedia’s HBO Max and NBCUniversal’s Peacock. WarnerMedia refused to comply, which contributed to the protracted delay in Max being available on the Roku platform, according to The Journal.

NBCUniversal reportedly licensed Roku some library programming, including “Magnum P.I.” and “Xena: Warrior Princess,” as well as 45 movies.

The Roku Channel ended the most-recent fiscal period with an estimated 54 million people. The company added 2.9 million incremental active accounts in the quarter to reach 46 million. Streaming hours increased by 200 million hours over last quarter to 14.8 billion.

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.


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 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.”

Quibi Shutting Down Six Months After Launching

Quibi, the short-form subscription video service launched in April by DreamWorks Animation founder Jeffrey Katzenberg and eBay founder Meg Whitman, is ceasing operations.

Katzenberg informed investors Oct. 21 about the shutdown, according to The Wall Street Journal, which cited people familiar with the situation.

Later that day, after the Wall Street Journal report, Quibi confirmed the shutdown on the Medium website, in “an open letter to the employees, investors, and partners who believed in Quibi and made this business possible.”

“It is with an incredibly heavy heart that today we are announcing that we are winding down the business and looking to sell its content and technology assets,” Katzenberg and Whitman said in the letter, which bore both of their signatures.

Katzenberg has hired a reorganization firm to help sell Quibi assets after the entertainment mogul was unable to sell the platform to NBCUniversal — which acquired DreamWorks Animation in 2016 for $3.8 billion. Quibi reportedly didn’t own most of its original programs, which undermined sale efforts.

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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 content war chest. Despite the hype and big-name talent (Anna Kendrick, Chrissy Teigen, Christoph Waltz and Liam Hemsworth, etc.) 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 and the fact many potential subscribers were stuck at home watching TV instead of their mobile devices. Even worse, Quibi content was only available on portable devices — not televisions — at launch.

The app lasted a fraction of the time of Verizon’s $1 billion cellphone-based video misstep, go90, which shuttered in 2018 after three underwhelming years.

In the letter, Katzenberg and Whitman wrote, “Quibi was a big idea and there was no one who wanted to make a success of it more than we did. Our failure was not for lack of trying; we’ve considered and exhausted every option available to us. … We opened the door to the most creative and imaginative minds in Hollywood to innovate from script to screen and the result was content that exceeded our expectations. We challenged engineers to build a mobile platform that enabled a new form of storytelling — and they delivered a groundbreaking and delightful service. And we were joined by ten of the most important advertisers in the world who enthusiastically embraced new ways for their brands to tell their stories. With the dedication and commitment of our employees and the support we received from our investors and partners, we created a new form of mobile-first premium storytelling.

Jeffrey Katzenberg, Meg Whitman at a PGA event June 8 in Los Angeles

“And yet, Quibi is not succeeding. Likely for one of two reasons: because the idea itself wasn’t strong enough to justify a standalone streaming service or because of our timing. Unfortunately, we will never know but we suspect it’s been a combination of the two. The circumstances of launching during a pandemic is something we could have never imagined but other businesses have faced these unprecedented challenges and have found their way through it. We were not able to do so.

“We want you to know that we got up every day and genuinely loved coming to work with the most remarkable and passionate team that we have ever assembled. We will be forever proud of the extraordinary partnership we were able to forge between the best of Hollywood and Silicon Valley. All that is left now is to offer a profound apology for disappointing you and, ultimately, for letting you down. We cannot thank you enough for being there with us, and for us, every step of the way.”

Report: Quibi Exploring Sale/Merger Options

Quibi, the mobile-centric subscription streaming service launched in April by Jeffrey Katzenberg and Meg Whitman, is reportedly looking to go on the sale block or seek acquisition with a private equity group.

The Wall Street Journal, citing sources familiar with the situation, reported Katzenberg, who co-founded and sold DreamWorks Animation, and Whitman, former CEO of eBay, are exploring all options after the service failed to meet subscriber and advertising goals.

Publicly, the two executives say they remain confident in the platform and a “new form” of storytelling.

Indeed, the $4.99 monthly service with ads ($7.99 without ads), backed by $1.75 billion in venture funding, launched with a series of original short-form videos, including Emmy-winning “#FreeRayshawn,” a drama about a black Iraq War veteran (Stephan James) who finds himself the target of a SWAT team for a crime he didn’t commit.

Yet, data firm Sensor Tower has suggested the service will generate less than 2 million subcribers by the end of the year — a fraction of the company’s 7.4 million year-end goal.

“We are committed to continuing to build the business in the way that gives the greatest experience for customers, greatest value for shareholders and greatest opportunity for employees,” Katzenberg and Whitman said in a joint statement.

SVOD Pushing LGBTQ Programming, Demand

TV shows and movies featuring gay and/or transsexual characters have seen a boom on subscription streaming video services. New data from Ampere Analysis suggests SVOD platforms are leading the way in commissioning LGBT+ content. Between Q1 2019 and Q2 2020, 12 services globally ordered multiple LGBT+ movies or series. 80% of those commissions were destined for on-demand platforms, with public broadcasters such as the BBC and France Télévisions also favouring on-demand delivery for series with LGBT+ themes.

Linear TV operators were more likely to opt for one-off TV specials on LGBT+ topics than commit to long-form series. While SVOD services such as Netflix and Amazon have the advantage of global reach when it comes to finding an audience for LGBT+ shows, their LGBT+ catalogs remain majority U.S.-sourced, but this looks set to change as LGBT+ content produced internationally catches the attention of the major SVOD players.

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“Netflix and Amazon Prime Video’s originals ‘Orange Is the New Black’ and ‘Transparent’ confirmed the appeal of LGBT+ themed content beyond the LGBT+ community,” analyst Alice Thorpe said in a statement. “Now queer content is an expected part of new SVOD services’ offerings, as we’ve seen with newly launched platforms like HBO Max, Peacock and Quibi.”

London-based Ampere found 18- to 34-year-olds are the most likely to identify as part of, and be accepting of, the LGBT+ community. This audience also over-indexes for subscribing to SVOD services. HBO Max has commissioned as many series about LGBT+ people in the past 12 months as its pay-TV channels have in the past three years.

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These titles include comedy drama series “Beth & Sam” and “Drama Queen.” The platform also has LGBT+ movies in the pipeline, such as YA novel adaptation “I’ll Be the One” and “We Were There, Too,” from Gloria Calderón Kellett and Natasha Rothwell.

With three upcoming series, “Expecting,” “Clean Slate,” and a reboot of the iconic British series “Queer as Folk,” Peacock’s LGBT+ content equates to 7% of its entire original commissions slate to date.

Although Netflix and Amazon have seen the proportion of their global TV catalogs that is sourced from U.S. producers decline to around 29% and 31%, respectively, this is not the case for LGBT+ TV content.

LGBT+ TV shows on Netflix skew 65% American-produced. On Amazon it’s 58%. One of the reasons for this is likely to relate to the risks associated with producing such content overseas. For instance, recently the Turkish Netflix original, “If Only,” was denied filming rights by the country’s government because it featured a gay supporting character.

In general, however, LGBT+ shows resonate across many territories and offer great potential for international distribution.

“One aspect of LGBT+ content’s specific appeal is its ability to travel across territories and inspire fandom,” Thorpe said. “This allows characters to travel into spin-off series as we’ve seen in Spain and Mexico. The international players are staring to acquire some of this locally produced content and we expect to see more of it on the SVOD platforms in the coming quarters.”

Indeed, Spain’s Atresmedia’s long-running series, “Amar es para siempre” spawned modern-day drama “#Luimelia.” Commissioned for the group’s premium SVOD tier, Atresplayer Premium, it has already been renewed for a further two seasons. HBO Max recently acquired the platform’s original bioseries “Veneno,” about the life of the Spanish singer and trans icon.

In Mexico, Televisa’s “Mi marido tiene familia” spawned “El corazon nunca se equivoca,” a series about a young gay couple aimed at a teen audience. Elsewhere, Colombia’s RCN has “Lala’s Spa,” starring trans actress Isabella Santiago in production. In Brazil, Globoplay is working on a bioseries about Marielle Franco and Amazon has original September in the works.

The Korean market has been more conservative than APAC countries like Thailand and Japan where LGBT+ content is more common. However, the tide is changing and recently more well-rounded LGBT+ characters have appeared, for instance in jTBC’s “Itaewon Class.” This became the third-most-watched show in the broadcaster’s history in Q1 2020. The international platforms have spotted untapped potential in Korean content, with series such as “Where Your Eyes Linger,” recently acquired by Netflix for its Korean service.