Sports-TV Fans: Your Rebate Check Is Not in the Mail

Big news: Sports are (hopefully) back!!!

Quote from Mark Cuban – Owner @ Dallas Mavericks:
“Once we start to turn the corner and can start playing games, everyone who has ever had an interest in sports will be craving to watch games, to root for their team, to cheer with friends, to have something that takes our minds away from everything that has happened.  We need that release.”

Why this matters: ≈ 23% of the average monthly pay-TV bill goes to sports, and the natives customers were getting restless with no live games to watch.

Source of monthly fees (% of total) that make up monthly cable bill according to Kagan:
1) 
Entertainment – $30 (35%)
2) Sports – $20 (23%)
3) News – $4 (5%)
4) Other – $30 ($31)

Quick math on pay-TV subscriber fees for sports networks:
1) ≈ 80M 
pay-TV subscribers
2) $20/month in fees
3) $1.6B in monthly fees
4) $19.2B in annual fees

Source of monthly fees by network (% of total) that make up monthly cable bill according to Kagan:
1) RSNs – $10.70 (55%)
2) ESPN – $7.69 (39%)
3) Fox Sports – $0.71 (4%)
4) NBCSN – $0.42 (2%)

Big question: What could have potentially happened if sports were canceled for the rest of 2020?

Quick Answer:
1)
 Pay-TV customers demand refunds from pay-TV providers

2) Pay-TV providers demand refunds from networks

3) Networks demand refunds from sports leagues

4) Sports leagues stop paying players

YoY average daily prime-time viewership change according to Nielsen:
1) NBCSN – ↓ 58%
2) ESPN – ↓ 54%
3) Fox Sports 1 – ↓ 31%

Buckle up: Sports rights fees could rise between 26% and 100% in the upcoming renewals!

Video: “Impacts of the Sport Hiatus on the Sports Business”

More #1: Sudden vanishing of sports will cost at least $12 billion, analysis says

More #2: ESPN Not Close To Breaching Affiliate Deals

More #3: Sports-TV Fans: Your Rebate Check Is Not in the Mail

Spotify Strikes Podcast Deal With Joe Rogan Worth More Than $100 Million

Big news: Spotify has reached a deal to become the exclusive home for The Joe Rogan Experience in a deal valued at $100M+.

Key details for The Joe Rogan Experience:
1) 
Started in 2009
2) 1,400+ episodes
3) 190M+ downloads/month

Wow: Spotify’s stock rose $1.7B within 23 minutes of the deal announcement!

Why this matters: Joe Rogan is the highest-earning podcaster, and he will be exclusive to Spotify as of September 1st.

Highest earnings podcasters in 2019, according to Forbes:
1) Joe Rogan – $30M
2) Karen Kilgariff and Georgia Hardstark – $15M
3) Dave Ramsey – $10M
4) Dax Shepard – $9M
5) Bill Simmons – $7M

FYI: It would take a musical artist on Spotify 23B streams to generate $100M.

Big question: How much more could Joe Rogan have earned by going direct-to-consumer?

Quick answer: $110 – $334M via Andrew Wilkinson.

Average time spent listening to podcasts (YoY growth) according to Edison Research:
1) 2015 – 4h 27m
2) 2016 – 4h 10m (↓ 6%)
3) 2017 – 5h 7m (↑ 23%)
4) 2018 – 6h 37m (↑ 29%)
5) 2019 – 6h 29m (↓ 2%)
6) 2020P – 6h 39m (↑ 3%)

Share of U.S. population that listens to podcasts weekly:
1) 12-34 – 49%
2) 35-54 – 40%
3) 55+ – 22%

More #1: Bill Simmons Just Wants to Win

More #2: How the ‘Call Her Daddy’ Feud Boiled Over

More #3: Amazon Wants to Build Your Favorite Podcast

How HBO Took on the Streaming Wars

Key details for HBO Max:
1) 
Launching today
2) $14.99 monthly cost (*free for current HBO subscribers)
3) 10,000 hours of content
4) 1,800 movies
5) No Roku/Amazon app at launch

Big question #1: How will the (relatively) high price impact new subscriptions beyond the current 34M?

Streaming service price comparison (ad-free):
1) HBO Max – $15
2) Netflix – $13
3) Hulu – $12
4) Amazon Prime Video – $9
5) Disney+ – $7
6) Apple TV+ – $5

Average monthly streaming spend according to Corus:
1) $0 – $10 – 30%
2)
 $25+ – 26%
3)
 $11 – $15 – 21%
4)
 $16 – $20 – 14%
5)
 $21 – $25 – 9%

HBO Max domestic subscriber projections (YoY growth):
1) 2019 – 34M
2) 2020P – 36M (↑ 6%)
3) 2021P – 38M (↑ 6%)
4) 2022P – 41M (↑ 8%)
5) 2023P – 44M (↑ 7%)
6) 2024P – 47M (↑ 7%)
7) 2025P – 50M (↑ 6%)

Big question #2: Will the combination of HBO and the larger WarnerMedia library (CNN, Warner Bros., etc.) drive significant interest as a bundle?

Content that is driving the most excitement according to Morning Consult:
1) 
HBO – 34%
2) 
Warner Bros. – 32%
3) 
Cartoon Network – 28%
4) 
DC Comics – 27%
5) 
Turner Classic Movies – 25%

Video: WarnerMedia CEO John Stankey | Full interview | Code Media 2019

More #1: As HBO Max nears launch, its purpose remains unclear

More #2: HBO Max Is Here to Take On Netflix. Is It Too Late?

More #3: HBO Max Launch: How to Get the Streaming Service (and How You Can’t)

TikTok Boom! How the Exploding Social Media App Is Going Hollywood

Key details for TikTok:
1) 
Launched in 2016
2) U.S. launch in Summer 2018
3) Part of Chinese company ByteDance
4) $75B estimated valuation
5) ≈ 2B app downloads
6) 700M daily users
7) 69% of users are 14-26

Wow: TikTok was downloaded 199M times in March, which is the highest monthly total for any app ever!

TikTok global app downloads by quarter according to SensorTower:
1) 
2017-Q1 – 22.4M
2)
 2017-Q2 – 26.6M
3) 
2017-Q3 – 33.6M
4) 
2017-Q4 – 46.8M
5) 
2018-Q1 – 110.3M
6) 
2018-Q2 – 156.0M
7) 
2018-Q3 – 183.8M
8) 
2018-Q4 – 205.7M
9) 
2019-Q1 – 187.3M
10) 
2019-Q2 – 155.9M
11) 
2019-Q3 – 175.9M
12) 
2019-Q4 – 199.4M
13) 
2020-Q1 – 315.0M

TikTok app downloads (share of total) by country:
1) 
India – 611M (30%)
2) China – 197M (10%)
3) United States – 165M (8%)
4) Other – 843M (52%)

TikTok users in the U.S. according to eMarketer:
1) 
2018 – 18.8M
2) 
2019 – 37.2M ( 97%)
3) 2020P – 45.4M ( 22%)
4) 2021P – 52.3M ( 15%)
5) 2022P – 55.8M ( 7%)
6) 2023P – 58.4M ( 5%)
7) 2024P – 60.3M ( 3%)

Big hire: TikTok tapped former Disney exec Kevin Mayer to be CEO.  At Disney, he oversaw streaming efforts, including the launch of Disney+.

Senator Hawley marked the occasion by offering a free trip to DC…

Video: TikTok?!  Clout-Chasing Millennial Learns About Memes and More

More #1: TikTok Is Preparing For An Ad War

More #2: The Promise—and Risk—of a Career in TikTok

More #3: ‘If You Can Get Famous Easily, You’re Gonna Do It’: How TikTok Took Over Music

From PepsiCo to GM, Big Advertisers Set to Cancel Commitments to TV Networks

Big news: Major advertisers are now able to cancel up to 50% of their Q3  upfront commitments.

What are the upfronts?  The upfronts are an annual event where the networks showcase their planned programming for the upcoming season.  Advertisers purchase advertising “upfront” at a negotiated price versus later in the scatter market, which can cost 6%+ more.

Advertisers considering cancelations include:
1) 
PepsiCo
2) General Motors
3) General Mills

Big question #1: Will these cancelations surpass the $1.0B – $1.5B that the Wall Street Journal story predicts?

Big question #2: How much money will advertisers hold back from the 2020-21 upfront?

TBT: The 2009-10 upfronts were down 13% YoY, according to Media Dynamics.

Upfront ad spend by year (% growth YoY) according to eMarketer:
1) 2008-09 – $16.8B ( 1%)
2) 2009-10 – $14.7B ( 13%)
3) 2010-11 – $16.6B ( 13%)
4) 2011-12 – $17.9B ( 8%)
5) 2012-13 – $18.7B ( 4%)
6) 2013-14 – $19.2B ( 3%)
7) 2014-15 – $18.4B ( 4%)
8) 2015-16 – $17.8B ( 3%)
9) 2016-17 – $18.6B ( 5%)
10) 2017-18 – $19.7B ( 6%)
11) 2018-19 – $20.8B ( 5%)
12) 2019-20 – $21.3B ( 2%)
13) 2020-21 – $21.6B ( 2%)

Share of national TV ad revenue sold at the upfronts:
1) 
Normal – 70%
2) 
Anticipated – 40%

Why this matters #1: If the above holds, then there would be ≈ 2X the normal amount of national TV inventory in the scatter market.

Why this matters #2: Additional inventory going to the scatter market means additional inventory that advanced TV targeting can be applied to.  This would bring in new advertisers beyond the ≈ 4K who typically buy national TV advertising each year.

Flashback: As TV Industry’s $20 Billion Week Starts, Signs That Streaming Isn’t King Yet

Video #1: Axios’ Fischer: Advertisers are holding off on committing dollars to the big TV networks

Video #2: Horizon CEO on managing through a crisis and the state of the TV upfronts

More #1: This Would Have Been Upfront Week, If Not For COVID

More #2: COVID-19 Will Forever Reshape The Upfront

More #3: The TV upfronts will never be the same again

Political Ads Expected to Explode, Even as Economy Tanks

Key details for political video ad spending according to Advertising Analytics/Cross Screen Media:
1) 2020 vs. 2016 – ↑ $4.3B (↑ 200%)
2) 2020 vs. 2018 – ↑ $2.6B (↑ 67%)
3) 4-5% of the entire U.S. video ad market
4) 17% of all video ad growth is from politics

Quote from Kyle Roberts – CEO @ Advertising Analytics:
“In terms of political spend, [the coronavirus] has not impacted it negatively.  These dollars can’t be allocated to the ground game right now. That does open up more dollars that are getting appropriated to the air war.”

Presidential cycle political video ad spending (% growth):
1) 
2016 – $2.2B
2) 
2020P – $6.5B (↑ 200%)

Midterm cycle political video ad spending (% growth):
1) 
2014 – $1.6B
2) 
2018 – $3.9B (↑ 142%)

Wow: The political video ad market is growing (CAGR) at a rate of 26% compared to 5% for the general video ad market!

Share by platform in 2019-20P:
1) 
Local Broadcast TV – 55% (↓ 9%)
2) Digital Video – 27% (↑ 8%)
3) Local Cable TV – 18% (↑ 1%)

Local broadcast TV spend by cycle (% growth):
1) 
2014 – $1.3B
2) 
2016 – $1.7B (↑ 33%)
3) 2018 – $2.5B (↑ 46%)
4) 2020P – $3.6B (↑ 42%)

Local cable TV spend by cycle (% growth):
1) 
2014 – $320M
2) 
2016 – $450M (↑ 41%)
3) 2018 – $660M (↑ 47%)
4) 2020P – $1.2B (↑ 75%)

Digital video spend by cycle (% growth):
1) 2018 – $740M
2) 2020P – $1.8B (↑ 145%)

The big question: Do you want to sell more political ads in 2020?  If yes, then download our FREE 8-page report, and let’s get started!

More #1: Knock, Knock, Who’s There? No Political Canvassers, for the First Time Maybe Ever

More #2: How Political Advertisers Are Adapting to the Coronavirus Pandemic

More #3: Fewer Political Ads Now, Doesn’t Mean Less Advertising Later

Spotify Gains 6 Million Paid Subscribers in Q1 as COVID-19 Disrupts Listening Patterns 

Spotify paid subscribers (YoY growth):
1) 2017-Q1 – 52M
2) 2018-Q1 – 75M (↑ 44%)
3) 2019-Q1 – 100M (↑ 33%)
4) 2020-Q1 – 130M (↑ 30%) 

Spotify subscription revenue (YoY growth):
1) 2017-Q1 – $828M
2) 2018-Q1 – $1B (↑ 25%)
3) 2019-Q1 – $1.4B (↑ 34%)
4) 2020-Q1 – $1.7B (↑ 23%)

Spotify revenue per subscriber (YoY growth):
1) 2017-Q1 – $15.92
2) 2018-Q1 – $13.83 (↓ 13%)
3) 2019-Q1 – $13.85 (↑ 0%)
4) 2020-Q1 – $13.08 (↓ 6%)  

Spotify ad-supported users (YoY growth):
1) 2017-Q1 – 82M
2) 2018-Q1 – 102M (↑ 24%)
3) 2019-Q1 – 123M (↑ 21%)
4) 2020-Q1 – 163M (↑ 33%)

Spotify advertising revenue (YoY growth):
1) 2017-Q1 – $74M
2) 2018-Q1 – $102M (↑ 38%)
3) 2019-Q1 – $126M (↑ 24%)
4) 2020-Q1 – $148M (↑ 17%)

Spotify revenue per ad-supported user (YoY growth):
1) 2017-Q1 – $0.90
2) 2018-Q1 – $1.00 (↑ 11%)
3) 2019-Q1 – $1.02 (↑ 2%)
4) 2020-Q1 – $0.91 (↓ 11%)

Spotify share of total revenue from advertising:
1) 2017-Q1 – 8%
2) 2018-Q1 – 9%
3) 2019-Q1 – 8%
4) 2020-Q1 – 8%

Big news: In 2019, Spotify passed Pandora for most listeners in the U.S.

Monthly listeners in the U.S. (YoY growth) according to eMarketer:
1) 
Spotify – 65M (↑ 26%)
2) Pandora – 63M (↓ 8%)

Video #1: Spotify CEO on earnings, changes in consumption patterns and more

Video #2: WFH Webinar Series: The Future of Podcasting

More #1: Spotify is testing video podcasts with two YouTube stars

More #2: Spotify’s Daniel Ek Talks ‘Explosion’ in Home Listening, Opportunities to Convert Radio Listeners During Lockdown

Cord-Cutting Explodes in Q1 as Pay-TV Sector Delivers Worst-Ever Losses

QoQ change in pay-TV subscribers according to MoffettNathanson:
1)
 Traditional pay-TV – ↓ 1.8M
2) 
Streaming pay-TV – ↓ 341K
3) Total pay-TV – ↓ 2.1M

YoY change in subscribers:
1) 
Traditional pay-TV – ↓ 8%
2) 
All pay-TV – ↓ 5%
3) 
Satellite pay-TV – ↓ 14%
4) 
Streaming pay-TV – ↓ 5%
5) 
Cable pay-TV – ↓ 4%

QoQ subscriber change for Comcast:
1) 
Traditional pay-TV – ↓ 409K
2) Broadband – ↑ 477K

Bottom line: Broadband subscribers are more profitable compared to traditional pay-TV subscribers.  The future for companies like Comcast is broadband, targeted advertising, and D2C video services (Peacock, etc.).

More #1: TV Cord-Cutting Hits Record as Coronavirus Shuts Businesses

More #2: Cord-cutting accelerates as empty restaurants, bars ditch cable

More #3: The Impact of COVID-19 on Pay-TV and OTT Video

Roku Streaming Hours Surged 80% in April, Hits Nearly 40 Million Accounts in Q1

Key numbers from Roku’s earnings:
1) 2.9M
 active accounts added in Q1
2) 39.8M total active accounts
3) 73% YoY increase in advertising revenue
4) 48% YoY increase in streaming hours

Quote from Steve Louden – CFO @ Roku:
“We anticipate that our ad business will continue to grow substantially on a year-over-year basis, albeit at a slower pace and lower gross profit than we originally expected for the year.  We believe the behavioral changes by TV ad buyers are likely positive for us in the longer term — and that with more time spent at home, and many households curtailing spending in light of economic hardships, cord-cutting and the shift to streaming will continue to accelerate.”

Roku active accounts (YoY growth):
1) 2017-Q1 – 14.2M
2) 2018-Q1 – 20.8M (↑ 46%)
3) 2019-Q1 – 29.1M (↑ 40%)
4) 2020-Q1 – 39.8M (↑ 37%)

Roku advertising revenue (YoY growth):
1) 2017-Q1 – $36M
2) 2018-Q1 – $75M (↑ 106%)
3) 2019-Q1 – $134M (↑ 79%)
4) 2020-Q1 – $233M (↑ 73%)

Roku advertising revenue per account (YoY growth):
1) 2017-Q1 – $2.56
2) 2018-Q1 – $3.61 (↑ 41%)
3) 2019-Q1 – $4.61 (↑ 28%)
4) 2020-Q1 – $5.84 (↑ 27%)

Roku total streaming hours (YoY growth):
1) 2017-Q1 – 3.3B
2) 2018-Q1 – 5.5B (↑ 67%)
3) 2019-Q1 – 8.9B (↑ 62%)
4) 2020-Q1 – 13.2B (↑ 48%)

Roku streaming hours per account (YoY growth):
1) 2017-Q1 – 232
2) 2018-Q1 – 264 (↑ 14%)
3) 2019-Q1 – 306 (↑ 16%)
4) 2020-Q1 – 332 (↑ 8%)

Roku advertising revenue per streaming hour (YoY growth):
1) 2017-Q1 – $0.011
2) 2018-Q1 – $0.014 (↑ 24%)
3) 2019-Q1 – $0.015 (↑ 10%)
4) 2020-Q1 – $0.018 (↑ 17%)

Video: Roku Unveils TV Ad Buying Solution

More #1: Behind Roku’s Ad-Supported Streaming Strategy

More #2: Roku Relaunches Dataxu As OneView, Marrying Its User Data To The DSP

Extreme Reach: 2020-Q1 Video Benchmarks

Share of impressions by length (YoY share change) according to Extreme Reach:
1) 30s – 77% (↑ 8%)
2) 15s – 22% (↓ 6%)
3) 60s – 1% (↓ 1%)
4) 6s – < 1% (↓ 1%)

Share of impressions for 6s:
1) 2017-Q1 – 0.04%
2) 
2017-Q2 – 2%
3) 
2017-Q3 – 3%
4) 
2017-Q4 – 5%
5) 
2018-Q1 – 3%
6) 
2018-Q2 – 1%
7) 
2018-Q3 – 2%
8) 2018-Q4 – 1%
9) 2019-Q1 – < 1%
10) 2019-Q2 – 1%
11) 2019-Q3 – 1%
12) 2019-Q4 – 1%
13) 
2020-Q1 – < 1%

Share of impressions by device (YoY share change):
1) 
Connected TV – 37% (↓ 12%)
2) Mobile – 33% (↑ 8%)
3) Desktop – 23% (↑ 6%)
4) Tablet – 5% (↓ 2%)
5) Other – 2% (↓ 0%)

Wow: This was the first share drop for CTV since 2018!

Big question: What impact did COVID-19 have on the CTV share drop?

Quick answer: Unclear.  February/March was lower than January, but January was 7% lower than December.

Share of impressions for CTV by month:
1) Oct-19 – 46%
2) Nov-19 – 46%
3) Dec-19 – 48%
4) Jan-20 – 41%
5) Feb-20 – 35%
6) Mar-20 – 36%

Completion rate by device:
1) 
Connected TV – 97%
2) 
Tablet – 89%
3) 
Mobile – 78%
4) 
Desktop –  74%

Average view time by length:
1) 30s  – 26s (87%)
2) 15s  – 13s (87%)