Netflix Overcomes Brazil Hurdle

In 2011 Netflix launched service in 43 Latin America countries, beginning with Brazil. Expansion into Brazil — the fifth-largest media market in the world, after China, India, the U.S. and Indonesia, was fraught with challenges.

Consumers were less familiar with using credit cards to pay for recurring charges such as over-the-top video. In addition to spotty broadband penetration, the lack of localized content (at the time) on Netflix alienated potential subscribers.

“Brazilians enjoy different things, like UFC and stand-up comedies, while hating telenovelas that are made in other Latin American countries,” former chief communications officer Jonathan Friedland told the Brazilian press.

Long-time Netflix bear Michael Pachter, digital media analyst with Wedbush Securities in Los Angeles, went so far as to predict Netflix wouldn’t make it in Latin America.

“This just won’t work in Ecuador or Costa Rica or even Mexico as it has in the U.S.,” Pachter told the Associated Press. “It’s going to depend on how many households have broadband access and what the quality of the content will be like.”

Fast-forward to the present and Netflix is a shining star in Brazil.

Along with Google’s YouTube, Netflix is the first OTT video choice across all devices, according to new data from IHS Markit. About 28% of respondents claim they turn to Netflix first when looking for something to watch, followed by YouTube at 24%. More than 63% of Internet users in Brazil, between the ages of 18 and 64, had access to Netflix, of which 86% claimed to use the service at least once a week.

IHS says that along with growth in OTT video, the installed base of Internet-connected devices grew by 10%, rising to more than 310 million devices in 2018.

More than 40% of survey respondents said they have a personal computer connected to their primary TV screens, while 35% claim to mostly use their smart TV apps to access video content on their primary TVs.

IHS contends that with on-demand video becoming ubiquitous around the world, and Brazil is no exception.

“The country has been experiencing a significant economic slump in recent years and, like other Latin American markets, Brazil’s legitimate pay TV and OTT subscription video-on-demand (SVOD) service providers have seen subscriptions fall or suffer reduced growth,” Erik Brannon, associate director of research and analysis, wrote in a note.“Laptops, tablets, streaming sticks and other devices increasingly pose a threat to cable TV and other traditional TV services.”

In terms of perceived quality, Netflix and YouTube were significantly ahead of pay-TV providers in the following categories: ease of use, flexibility (i.e., “ability to watch what I want when I want”), largest catalog of content, quality of content, and value for the money.

Although this finding is a victory for OTT providers, Netflix and other OTT video services must focus on local language content to remain relevant in the long term, according to Brannon.

Despite the vast library of foreign content Netflix has to draw upon, the amount of Brazilian and Portuguese content remains minimal, which is why the company is now partnering with local producers to boost local content in its library.

As the Brazilian economy continues to improve, growth in pay-TV households is expected to resume. At the same time, a surge in growth is expected in the OTT market as well.

IHS found that pay-TV monthly average revenue per user (ARPU) can cost five times or more than the monthly ARPU of Netflix. Subscription sharing also seems to be a profound problem in Brazil, since nearly 63% of survey respondents reported having access to Netflix, while Netflix subscriptions penetrated less than 25% of all broadband households.

“Connected consumers in Brazil are interested in viewing content in non-traditional ways, which will put added pressure on traditional content and distribution systems when the economy recovers,” wrote Brannon.

 

 

CES: Speakers Discuss the Growing Pains and Promise of Direct-to-Consumer Entertainment

LAS VEGAS — Speakers discussed the variety and expansion of online services, as well as strategies to cut through the content clutter and engage the online entertainment consumer during the panel “Into the Zeitgeist — The Direct-to-Consumer Entertainment Economy” at CES Jan. 9.

The panel took place at the Variety Entertainment Summit during the Las Vegas show.

The advent of pending services from the Walt Disney Co., WarnerMedia and Apple “certainly makes our lives more interesting,” said Hulu’s Kelly Campbell, adding the question is if they can scale quickly.

Farhad Massoudi, of the AVOD service Tubi, said there was a limit to what average consumers will spend on subscription services and that it was “ludicrous” that average income folks would subscribe to a growing smattering of subscription video-on-demand services. That’s where ad-supported platforms such as Tubi, which sports a movie and TV library much bigger than Netflix, come in, he said.

“Most SVOD services are going to struggle,” he said.

FandangoNow’s Cameron Douglas doesn’t consider these services competitors to the company’s transactional VOD business.

“We’re really agnostic as to what people are consuming and where,” he said.

In fact, they successfully distribute Amazon’s “The Handmaid’s Tale” and would love to have a transactional offering of Netflix’s hit Bird Box.

“We do hope all of the studios, Netflix included, allow us to monetize those products,” he said. “There’s no reason that movie content that starts in the digital space can’t find a home on transactional.”

Whatever the distribution model, engaging the consumer is key, panelists said.

“We always want to super serve the super fans,” said Discovery Networks’ Peter Faricy. Discovery along with the PGA Tour created the Golf TV brand, which underpins a new live and on-demand international video streaming service specifically for golf fans.

Another way to attract consumers is by offering products that serve their needs.

“Consumers want choice, flexibility and control,” Hulu’s Campbell said. To that end, Hulu offers the choice of live, ad-supported and ad-free subscription options.

FandangoNow’s Douglas said the VOD service leverage’s its relationship with online movie ticketing platform Fandango by “taking 60 million Fandango uniques every month” and touting availability of transactional digital movie and TV offerings for home viewing.

“The [transactional] space is growing about 10% each year, and we are tripling that growth,” he said.

The service also attracts consumers with superior content quality, such as 4K UHD titles and — through a deal just announced — Imax content.

YouTube’s Neil Mohan said the online behemoth, which adds 400 hours of content a minute every single day, serves its viewers with recommendations that cater to them.

“The recommendations that we give to you should really speak to you,” he said.

Tubi, too, uses recommendation algorithms to serve its audience, Massoudi said.

The content itself should also engage consumers, said Conde Nast Entertainment’s Oren Katzeff. His company, which he said has some of the most binged shows on Netflix, creates content in a way that makes viewers want to watch more episodes.

He said engaging consumers also requires looking at data to see not just what they want, but when they want it and how they want it.

Ideally, content should build a relationship with consumers.

“From a creation standpoint, how do you create content that people not only want to watch [but to comment on and engage with further],” he said.

‘Multiplatform Entertainment’ Innovators Feted at 2018 Variety Hall of Fame

Paramount Pictures president of worldwide home media distribution Bob Buchi, YouTube global head of content Susanne Daniels, Incredibles 2 director Brad Bird and “Insecure” creator and star Issa Rae were honored at Variety’s Hall of Fame dinner Dec. 4.

The digital movie sales and storage service Movies Anywhere and digital retailer FandangoNow were also acknowledged with awards at the event “celebrating innovation in multiplatform entertainment,” which benefited City Year.

See our exclusive photos from the Variety Hall of Fame ceremony here.

Buchi noted his first job working for a studio was as a sweeper at Disneyland. The rule was if he saw $20 on the ground he could sweep it up and go backstage and put it in his pocket. “Here I am 20 years later, and I’m still trying to coax $20 at a time out of consumers’ pockets,” he joked.

Saying he was “very honored and humbled” by the award, he praised the industry’s collaborative nature. “We’re all competitors but we all rally around technical advancements,” he said.

Karin Gilford, SVP and GM of Movies Anywhere, accepted the Deloitte Media and Entertainment Innovation Award for one of those advancements, Movies Anywhere. The digital movie collection service backed by five major studios launched in October 2017 with industry teamwork, she said. “Movies Anywhere is a collaborative endeavor and the success that we’ve achieved this year reflects the boundless energy, amazing creativity and commitment to teamwork that we continue to see from our partners and colleagues at Disney, 20th Century Fox, Sony Pictures, Universal and Warner Brothers,” she said, noting that the service is backed by six, “soon to be seven,” major retail partners.

“We continue to believe Movies Anywhere is a game changer,” she said. “Digital ownership has tremendous value.”

Director Brad Bird gave a nod to the home entertainment industry, while also extolling the virtues of the theatrical experience. “Watching something uninterrupted with strangers in the dark, there’s nothing like it,” he said. Still, home entertainment widens the audience, he noted.

“It’s also a wonderful time for movies because there are so many ways to see them thanks to all the people in this room, and when movies go to that ethereal place that they all go to, they can be viewed at any time and that’s a wonderful thing and people can be comforted by stories and watch them conveniently,” he said.

YouTube’s Daniels counted herself lucky “to work with incredibly talented people who tell compelling stories that resonate with audiences young and old.” “I’m also lucky be part of YouTube, a platform that gives people across the globe a way to share their experiences and their voice,” she added.

Rae, who got her start on the web, noted, “I’m here because of the Internet, because of YouTube.” She acknowledged entertainment executives who allowed her “space to suck.”

“Sometimes as people of color, as minorities, we can be crippled by fear of failure because we know we only get one chance,” she said.

Cameron Douglas, VP of home entertainment, Fandango, accepted the Variety Innovation Award for the digital service FandangoNow.

He created an elaborate, comedic backstory for the retailer starting with the “Fandango brothers,” who lost their dance studio in San Francisco’s 1906 earthquake. They decided to create a digital movie service, he said.

“They didn’t know what that meant at the time, but they were determined,” Douglas joked.

(L-R): Cameron Douglas, Bob Buchi, Issa Rae, Susanne Daniels, Brad Bird and Karin Gilford at Variety Hall of Fame 2018. (Photo by Todd Williamson/Variety)

Comcast Adds Amazon Prime Video to X1 Platform

Comcast Dec. 5 announced that Amazon Prime Video will launch over the next week on its broadband-based Xfinity X1 platform. Prime Video joins Netflix and YouTube as major third-party over-the-top video services afforded direct access to Comcast subscribers.

The move underscores Comcast’s ongoing tug-of-war between branching out into branded OTT video and staying true to its pay-TV legacy.

“Prime Video is a fantastic extension of the programming choices available to our customers,” Matt Strauss, EVP, Xfinity Services, Comcast Cable, said in a statement.“By integrating hundreds of thousands of live and on demand choices from the best networks, studios and streaming services, our customers can instantly search, control and watch all of their entertainment in one place with their voice.”

X1 subs will be able to search Prime Video original programming, including Homecoming with Julia Roberts, Tom Clancy’s Jack Ryan, The Marvelous Mrs. MaiselThe RomanoffsGoliath, Bosch, The Man in the High Castle, The Grand Tour  and a growing library of Prime Video programming in 4K Ultra HD and HDR.

Comcast users can launch the Prime Video app by saying “Amazon Prime Video” into the voice remote or by navigating to the X1 apps menu.They can also search an entire genre of programming, such as saying, “Watch The Americans, ”Show me Sneaky Pete,” or “Find comedies” into the voice remote.

“The launch arrives just in time for Season 2 of Emmy-winning “The Marvelous Mrs. Maisel, Season 3 of “The Grand Tour” and holiday classics like It’s A Wonderful Life, which is now available exclusively on Prime Video,” said Greg Hart, VP of Amazon Prime Video.

In addition to the thousands of titles included with a Prime Video subscription, subscribers can access titles for rental or purchase, or choose from more than 150 Prime Video Channels to add to their video service, including Showtime and Starz.

 

YouTube Streaming Ad-Supported Hollywood Movies

YouTube has quietly begun offering catalog studio movies for free on its website, including titles such as Legally Blonde, Rocky IV, Zookeeper and The Terminator, among others.

The ad-supported streams appeared last month alongside new releases promoted to buy or rent on YouTube.com (i.e. Google Play).

“We saw this opportunity based on user demand, beyond just offering paid movies. Can we do ad-supported movies, free to the user?” Rohit Dhawan, director of product management at YouTube, told AdAge. “It also presents a nice opportunity for advertisers.”

Indeed, with most of the titles already cycled through retail channels, including DVD, Blu-ray Disc, transactional VOD and SVOD, marketing the IP through the broadcast TV model online to more than 1 billion users offers incremental revenue opportunities for all parties involved.

With targeted advertising seen as a new way for marketers to reach select demographics, eMarketer estimates YouTube could generate billions in revenue annually from ad-supported movies.

“This is a huge business opportunity,” said Farhad Massoudi, CEO of ad-supported Tubi TV. “There’s a lot of consumer traction and I expect all the major companies will jump in at some point.”

Indeed, to help market the Feb. 9, 2019, theatrical release of The Lego Movie 2: The Second Part, Warner Bros. Pictures and YouTube offered free streaming access to the original Lego Movie on Black Friday embedded in an online ad.

The promotion marked the first time YouTube rolled out a full-length movie within an ad.

 

Cinedigm’s Dove Channel Launches on Comcast Cable

Cinedigm Nov. 26 announced that its subscription video-on-demand service, Dove Channel, is now available similar to Netflix and YouTube via direct access on Comcast’s broadband-based Xfinity X1.

X1 subscribers can access Dove Channel’s library of family friendly movies, children’s programs, documentaries, and TV series, including new and noteworthy titles such as “A Christmas Kiss,” “1500 Steps,” and “Letters to God,” among others.

Xfinity X1 subscribers can access the service by saying “Dove Channel” into their X1 voice remote control or by finding it within the networks section of Xfinity on Demand. Dove Channel can be added to X1 customers’ service for $4.99 per month and included in the monthly cable bill.

Launched in September 2015, Dove Channel was created to offer programming, including children’s fare, that meets the content standards of The Dove Foundation, a non-profit organization whose mission is to encourage and promote the creation, production, distribution and consumption of wholesome family entertainment.

“Cinedigm is pleased to bring our top-tier family-focused content to X1 and to reach even more viewers from coast-to-coast,” Bill Sondheim, president of Cinedigm Entertainment Group, said in a statement. “Dove Channel offers unique values-based films and programs that are safe for the whole family and Xfinity X1 is the perfect home for this vast library of inspiring content.”

 

 

 

Vanessa Hudgens Plugs New Netflix Holiday Movie on Black Friday

Move over Hallmark and Lifetime. Netflix, which is streaming original winter holiday-themed romantic comedy The Princess Switch, starring Vanessa Hudgens (Spring Breakers), upped public awareness of the title Nov. 23 by releasing a YouTube video featuring the High School Musical star sharing her holiday traditions and behind-the-scenes moments.

The movie, which finds a duchess switching places with an ordinary woman (both played by Hudgens) from Chicago and they each fall in love with each other’s beaus — co-stars British actor/musician Sam Palladio (“Nashville”). It was filmed in Romania.

YouTube Streaming ‘The Lego Movie’ Free on Black Friday

To help market the Feb. 9, 2019 theatrical release of The Lego Movie 2: The Second Part, Warner Bros. Pictures and YouTube will include free streaming access to the original Lego Movie on Black Friday (Nov. 23) embedded in an online ad.

The promotion marks the first time YouTube has rolled out a full-length movie within an ad. For 24 hours, anyone checking out the trailer for the upcoming Lego movie can stream a full-length feature showing of the original film.

To launch their own personal screening, users should enter the YouTube search keyword “Brick Friday” and select the promoted video for The Lego Movie 2: The Second Part at the top of the search results.

The Lego Movie 2: The Second Part stars the voices of Chris Pratt, Elizabeth Banks, Tiffany Haddish, Will Arnett, Stephanie Beatriz, Charlie Day and Alison Brie, among others.

 

 

Video Remains Double-Edge Sword for Facebook

Facebook ended its most recent third-quarter (ended Sept. 30) fiscal period with 2.3 billion people worldwide using the social media platform monthly, including 1.5 billion every day. Revenue grew 33% to $13.7 billion.

Facebook Watch, the ad-supported VOD service, was launched Aug. 10, 2017, followed by Instagram TV (IGTV) this past June. Both platforms targeting YouTube continue to pose challenges to Facebook’s business model structured around user exposure to advertising. Indeed, streaming video could actually hurt revenue, Facebook founder/CEO Mark Zuckerberg said on the Oct. 30 webcast.

“Video monetizes significantly less well per minute than people interacting in [community] feeds,” Zuckerberg said. “So, this means that even though we’ve made video more community-oriented and minimized displacement of social interactions, as video grows it will still displace some other services where we’d probably make more money.”

In other words, as Facebook users consume video, they interact with “friends” less — and in turn deprive advertisers (which account for more than 90% of Facebook revenue) channels to pitch products and marketing campaigns.

“Video is a critical part of the future, it’s what our community wants, and as long as we can make it social, I think it will end up being a large part of our business as well,” said Zuckerberg.

Indeed, the executive admitted Facebook has had to “rate-limit” video growth on the platform. Characterizing video consumption as “passive” compared to users aggressively engaging in community, political and social conversations, Zuckerberg said Facebook Watch is working with advertisers to better fit their marketing and ad-buying process for video.

In Q3, Facebook introduced a way for advertisers to buy video ads from specific content categories and pay only for ads that are watched to the end.

“The biggest thing that we need to do is make sure that the video experience is people-centric, and that we’re helping content creators [and advertisers] build a community and we’re helping people interact with each other,” Zuckerberg said.  “We build social products that help people interact. There are lots of places in the world that you can go to consume content, but we’re the Internet service that people use to help connect with other people, and we’re not going to let passive consumption get in the way of that.

“We needed to figure out a way so that video can grow, but people can also keep on interacting and doing what they tell us that they uniquely want from Facebook,” he said.

Zuckerberg said Facebook Watch user growth has tripled in the past few months.

“I think that’s a very exciting opportunity ahead,” he said. “And that’s one of the reasons that I’m very optimistic about the Watch growth.”

Comcast Q3 Pay-TV Subs Continue to Decline

Comcast Cable maybe slowly embracing third-party over-the-top video service such as Netflix, YouTube and Sling TV, but it continues to jettison pay-TV subscribers.

The cable operator Oct. 25 disclosed it lost 106,000 subscribers in the third quarter (ended Sept. 30), and improvement from the 125,000 subs lost in the previous-year period.

In reality, Comcast ended the quarter with 22 million video subs – down 375,000 subs from 22.39 million last year.

At the same time, Comcast is one of the nation’s largest ISPs, adding 334,000 residential broadband customers in the quarter – up 83.5% from 182,000 customer additions last year. The company ended the period with more than 24.7 million residential high-speed Internet customers, compared to 23.5 million customers last year.

It was the best Q3 for broadband additions in 10 years. Indeed, broadband revenue increased 9.6% in the quarter to $4.3 billion. Revenue is up 9.1% to $12.7 billion through the first nine months of the fiscal year.

“Comcast Cable’s pre-tax earnings growth was the fastest in six years, and customer relationship growth accelerated,” Brian Roberts, CEO of Comcast Corp., said in a statement.