Roku’s Rough Week

In an era of fake news allegations, manipulation of the media for market purposes can be just as insidious.

Take Roku, the streaming media device manufacturer and platform that invented the subscription video-on-demand market ecosystem with Netflix more than 11 years ago.

Last week after Comcast announced it would begin rolling out a free streaming media device to promote its Xfinity Plex over-the-top video platform, shares of Roku began to decline — ending last week down about 30% and the worst stock performance for the company since it went public in 2017.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Of course, Wall Street always waxes extreme at the slightest wind change. Research firms notes now disseminated over the Internet with maximum ease — and effect.

But CNBC and CBC.com went further, speculating Roku shares could plummet this week.

“Roku shares could fall another 30% before finding a bottom, chart suggests” screamed the Sept. 23 Hearst-like headline.

Buried at the bottom of the story: “Disclosure: Comcast is the owner of NBC Universal, parent company of CNBC and CNBC.com.”

The internal rationale suggests that the more Roku suffers, the better possible scenarios play out for Comcast and its budding Xfinity OTT plans.

After years of eschewing streaming video for its traditional pay-TV business model, Comcast has recognized that the streaming video ecosytem cannot be stopped.

That reality prompted Comcast Cable a few years ago to embrace direct access for its Xfinity subscribers to Netflix, YouTube, Amazon Prime Video and most recently: ad-supported Tubi TV.

Roku, in addition to manufacturing Chinese-made streaming devices — including Comcast-owned Now TV devices in the United Kingdom — operates its own AVOD service, The Roku Channel — a direct competitor to Plex and the pending Peacock streaming video platform.

“It could get even worse [for Roku],” Craig Johnson, chief market technician at Piper Jaffray, told CNBC.

To its credit, CNBC cited separate market analysis from Quint Tatro, founder of Joule Financial, who said Roku would bounce back.

Indeed, Roku last week rushed out a series of press releases touting revamped streaming devices.

“I’m a Roku user,” Tatro told CNBC. “I own six of them in our home and office. I have not had cable for years so I would not switch to a cable device.”

 

Financial Streaming Video Service ‘Asset TV’ Hires Bloomberg News Reporter

Wall Street has long been a favorite genre for television and the Internet with myriad programs devoting real-time coverage to market transactions, fluctuations and news.

Now, U.K.-based digital media company Asset TV is looking to raise its profile in the United States with the hiring of Bloomberg News business reporter Laura Keller to lead its editorial coverage.

In a newly created role – Americas head of content and editor at large – Keller will act as the lead anchor of Asset TV, responsible for broadening and strengthening the streaming service’s video offerings, editorial content and partner programming. Keller will also manage talent development, including overseeing on-air talent and guest contributors in the U.S., Canada and Latin America.

She reports to Neil Jeffery, EVP and head of Americas at Asset TV.

“When I began our search to fill this new senior role I knew it would be a tall order to find one person with the right combination of journalism experience, a deep understanding of financial markets, and the skills to effectively manage teams and develop alliances,” Jeffery said in a statement. “Laura Keller is the perfect fit.”

At Bloomberg News, Keller was a frequent contributor to programming, including its television and radio networks and conference series. She has also been a periodic guest of C-SPAN, CBSN, NPR, Cheddar TV, CBS Radio, and NBC. Keller has become known for her stories about work life and culture on Wall Street, including at large banks like Bank of America Corp., Credit Suisse and Wells Fargo.

Keller earned a master’s degree in journalism with a concentration on broadcast in 2012 from Columbia University, where she also studied credit derivatives at Columbia Law School. She holds a dual bachelor’s degree in economics and print journalism from the University of Southern California, where she was editor-in-chief of The Daily Trojan.

MoviePass Annual Subs Now Limited to Three Movies Monthly

With its stock hovering around two cents per share, Helios and Matheson Analytics — corporate parent of MoviePass — is now restricting annual subscribers to three theatrical screenings per month — down from a daily screening.

In an email to the service’s $89.95 annual subscribers, the company said the switch would help maintain lower overhead costs, while affording subs with greater access to content.

“After experimenting with different models and options, we believe that our current monthly plan captures the need of our community — keeping prices low while continually striving to offer a wider selection of films,” said MoviePass.

In effect, MoviePass is now subjecting annual subscribers to the same three-title screening restrictions it imposed upon month-to-month subs earlier this year. Subs are also restricted to select titles and screening titles.

The company is allowing annual subs to cancel their membership for a prorated refund if they choose.

Departing annual subs is the least of MoviePass’ issues, which have dogged the once-promising service after Wall Street grew leery of a business model that enables subs to essentially watch a theatrical screening daily for free.

After cutting the monthly subscription price to $9.95 a year ago, MoviePass took off among consumers, attracting three million subs. At the same time, the service was unable to leverage its sub base with exhibitors in exchange for lower ticket prices.

With MoviePass paying exhibitors face value for every ticket consumed by subscribers, fiscal losses have mushroomed – more than $200 million through June 30.

Despite a 1-for 250 shares reverse stock split and the company buying/selling hundreds of millions of shares to boost the stock price, HMNY’s stock continues to plummet – leaving initial investors with virtually nothing except a desire for revenge.

Numerous shareholder lawsuits have been filed against HMNY, and founder/CEO Ted Farnsworth, among others.

Online Trading App Halts MoviePass Parent Stock Purchases

With its stock worth about a nickel, Helios and Matheson Analytics – parent of fiscally-challenged ticket subscription service MoviePass – has been a draw to entry-level investors.

That worries Robinhood, an upstart online trading app with a business model that pledges to help first-time investors navigate Wall Street.

The firm operates on margin trading charging subscribers from $6 monthly to buy and sell stock. This week, Robinhood reportedly sent an email to subscribers announcing it had suspended new purchases of HMNY stock.

“In order to protect our customers from the risks associated with some low-priced stocks, we remove the buy option for stocks like HMNY that consistently trade under $0.10 [per share],” said the company, as reported by Business Insider.

HMNY stock, which underwent a 1-for-250 shares reverse stock split last month, has lost 99.99% of its value since the split. The stock is reportedly held by more than 74,000 Robinhood subscribers, who can still hold and sell the company’s shares.

Robinhood’s move is in stark contrast to Maxim Group and Canaccord Genuity, two Wall Street investment firms that have profited from marketing shrinking HMNY shares.

The firms worked with HMNY pushing the stock on investors since last August after the latter acquired controlling interest in MoviePass. In return, they reportedly made millions on commissions while holding a “buy” rating on HMNY stock.

“We see numerous ways to monetize a large user base and drive profitability, such as movie promotions, profit sharing, rebates, concessions, data sales and advertising,” Brian Kinstlinger, analyst at Maxim, wrote in an October note.

Kinstlinger set a price target of $20 per share for HMNY stock.

Of course, HMNY shares have only declined over the past 10 months as MoviePass hemorrhaged millions more than it generated. The service reportedly spent upwards of $45 million monthly in June and July reimbursing exhibitors for tickets redeemed by subscribers.

An investor buying $100,000 worth of HMNY stock last October, would now hold about $1.85 in value.

Indeed, axiom “buyer beware,” is a mainstay on Wall Street precisely because investment banks’ ratings on third-party stock are often undermined by their cozy relationship with the same clients.

“Human nature being what it is, no CEO is likely to throw business to a bank whose analyst is negative on the CEO’s company,” Erik Gordon, professor at the University of Michigan’s Ross School of Business, told Business Insider.

“There are examples of analysts reiterating ‘buy’ ratings 30 days before a company went under,” said Gordon.

Black Friday: MoviePass Parent Market Value Dips Below $100K

A company’s future as a publicly traded stock is undeniably bleak when Wall Street values it less than $100,000.

That’s the reality Helios and Matheson Analytics, parent of MoviePass, found itself Aug. 10 when shares fell to 5.5 cents per share in midday trading, leaving HMNY with a market valuation of just $96, 200.

By comparison, AMC Theatres and Cinemark Theatres, which each have competing ticket subscription services, have $2.2 billion and $4.3 billion market caps, respectively.

The book has pretty much been written on MoviePass, a populist business model that enables subscribers to see a theatrical screening daily (now three times monthly) for $9.95 fee.

Indeed, 3 million people signed up to the service essentially to watch movies for free, leaving MoviePass to pay the bill. The company thought its scale and self-proclaimed user data would convince exhibitors to become partners and split costs.

Exhibitors had different ideas. Such as enjoying the MoviePass fiscal windfall, high-margin concession revenue for themselves, and then building a more economically prudent subscription service.

That might sound unfair and exploitive. But that’s capitalism. A reality HMNY should have known.

 

 

Post Reverse-Stock Split, MoviePass Parent Shares Plummet 50%

Helios and Matheson Analytics tried to pull a magic trick at the market close July 24, transforming company shares – worth 8.5 cents – into $21.25-per-share valuation following a 1-for-250 shares reverse stock split.

After-market naysayers sent shares of the MoviePass’ parent tumbling further to open July 25 at $14.23 per share.

The stock plummeted another 50% to close July 25 at $10.60 as badgered investors turn their back on HMNY’s last-ditch effort to resuscitate a business model that essentially enables subscribers to go to the movies – for free – 30 days out 31 days each month (with 31 days).

The other “day,” subscribers pay $9.95.

HMNY was forced into the reverse stock split to gets its moribund stock above the Nasdaq minimum $1 valuation for 10 straight business days to avoid being delisted.

“You do the reverse split and get over $1, but I don’t think that will attract [investors],” Erik Gordon, assistant professor University of Michigan’s Ross School of Business, told Business Insider. “I mean, theoretically there could be somebody stupid enough to go, ‘Wow, it went from $0.09 to [$14].’”

Gordon believes HMNY’s biggest challenge remains convincing investors to continue throwing money at a stock that lost 97% of its value before the split. Convincing subscribers is easy. The service expects to have 5 million members by the end of the year to break even.

Ted Farnsworth, HNMY’s ever-optimistic CEO, told Business Insider MoviePass is resilient.

“Wall Street understands how we operate,” he said. “They love the story. They think we’re the next unicorn company.”

Wall Street: Netflix Top Choice for TV Entertainment

Consumers in the United States are increasingly choosing Netflix for their TV entertainment, according to a new Wall Street survey.

Investment firm Cowen & Co. found that 27% of 2,500 respondents in a recent survey chose Netflix, compared with 20% opting for basic cable and 18.1% for broadcast television.

Among the younger 18-24 demo, the percentage of respondents choosing Netflix increased to 40% — ahead of perennial favorite YouTube.

Cowen analyst John Blackledge said the survey underscores how important Netflix has become to the average household, especially among millennials.

The analyst said the subscription streaming pioneer upped original content releases 51% in the second quarter (ending June 30) to 452 hours compared to the previous-year period. Netflix is on tap to spend $8 billion on original content this year.

“[Netflix] continues to ramp its original content offering, including local originals in many international markets,” Blackledge wrote in a note as reported by MarketWatch.

Indeed, Netflix is projected to grow its international subscriber base from 83.6 million subs at the end of 2018 to 255.2 million in 2028.

Daniel Ives, chief strategy officer at GBH Insights, says the cord-cutting phenomenon is continuing to accelerate.

“It’s really about content,” Ives told Al Jazeera. “Netflix [has] really created a content arms war and you’ve sort of seen this across the board with the consolidation across the sector between AT&T, Time Warner, Disney and Comcast … it all speaks to ‘content is king’ in this cord-cutting world.”

“Ultimately, the only way you drive international sub growth is international content,” Ives said. “Whether it’s the Middle East, Africa or other parts of the world you’re trying to penetrate … it has created a new age for content and Netflix recognizes that as they expand internationally, content is the key.”

Netflix announces Q2 results July 16.

Netflix Worth More Than Comcast, Disney on Wall Street

Thanks to a record stock price, subscription streaming video behemoth Netflix quietly ended May 23 with a market value exceeding Comcast for the first time.

The same Comcast that owns NBC Universal, DreamWorks Animation and wants to own 20th Century Fox Film and British satellite TV operator Sky.

Netflix ended the day with market capitalization of $149 billion, which bested Comcast’s $147 billion market cap. Netflix opened May 24 up to $151.8 billion, which passed Disney’s $151.7 billion market cap.

With more than 125 million subscribers globally, Netflix continues to grow. The service expects to add 6.2 million subs in the second quarter ending June 30.

The service also continues to expand its creative product with the bow of “Dear White People,” “The Break with Michelle Wolf” on May 27, and announcement of future projects with former President Barack Obama and First Lady Michelle Obama.

The latter drew some pushback on social media, with several subscribers saying on Twitter they would cancel their service, according to Fortune.

Apparently, President Obama’s desire to “cultivate and curate the talented, inspiring, creative voices who are able to promote greater empathy and understanding between peoples and help them share their stories with the entire world,” being an affront to some.

Chief content officer Ted Sarandos said the Obamas are “uniquely positioned to discover and highlight stories of people who make a difference in their communities and strive to change the world for the better.”

And Wall Street agrees — for now.