Why Apple made the unusual move to sell its streaming service for next to nothing

Key details for Apple TV+:
1) 
No ads
2) Available in 100+ countries
3) $4.99 per month after free trial
4) $6B+ in original content spend
5) 9 original shows
6) No 3rd party content

Smart: The lower entry price and free trial should allow Apple to quickly gain subscribers.  For example, they are projected to sell 70M+ iPhones this holiday season, and each of those customers would get their first year free.

Apple devices that qualify for a free year of Apple TV+:
1) 
iPhone
2) iPad
3) Mac
4) Apple TV box

Apple plans to launch with nine original shows:
1) 
The Morning Show
2) See
3) For All Mankind
4) Dickinson
5) The Elephant Queen
6) Helpsters
7) Snoopy in Space
8) Ghostwriter
9) TBD show w/ Oprah

Flashback: Here’s How We’d Handle the Rollout for Apple TV+

Video: Apple has advantage with customer base in streaming wars

More #1: The iPhone and Apple’s Services Strategy

More #2: Apple TV+ is a bit of an afterthought

More #3: Apple Says TV+ Service Won’t Harm Results, Rebutting Goldman

J.J. Abrams Officially Closes Sizable WarnerMedia Film, TV Partnership

 

Key details for J.J. Abrams deal:
1) 
Runs through 2024
2) Starting value of ≈ $250M
3) 
Non-exclusive

Multiple companies were in the mix, including:
1) 
Apple
2) Disney
3) Comcast
4) Sony
5) Netflix
6) Amazon

Apple reportedly offered $500M but wanted full exclusivity.  The deal with WarnerMedia allows Abrams and Bad Robot to continue working on existing projects (sequels to Star Wars/Star Trek, etc.) along with selling new projects to 3rd party outlets.

The deal covers:
1) 
Movies
2) Television shows
3) Video games
4) Consumer products
5) Music
6) Digital content

Flashback: J.J. Abrams Bidding War Won By WarnerMedia as Bad Robot Nears $500M Partnership

More #1: Beyond Netflix: Showrunners Testing Waters With Multiple TV Overall Deals

More #2: ‘Game of Thrones’ Creators Narrow Overall Deal Suitors to Netflix, Amazon and Disney

NBC local TV group will no longer use ratings to sell ads

Big news: All NBC and Telemundo-owned local TV stations will begin measuring campaign performance with impressions rather than ratings.

Background: Advertisers have been using impressions to measure campaign performance for several years but had to convert everything back to age/gender ratings for pricing/reconciliation.

Two big opportunities for local TV from moving to impressions:
1) Sell more linear – 
Consistent measurement w/ all video advertising to maximize share of linear buy.

2) Sell more digital – Digital (CTV/OTT, etc.) inventory can be packaged with linear and sold to both traditional and digital media buyers.  Twice the demand = higher prices.

FYI: This will be a topic in my talk tomorrow at RampUp 😎

This move helps local TV with #1 and #3 since impressions are the preferred currency for digital video buyers.

TVB also announced that they are working w/ 800+ member stations to move toward impressions.

Quote from Perry Sook – CEO @ Nexstar Media Group:
“By simplifying the way we evaluate media across platforms, we think we will enable local TV to be included more in the decision-making process”

Television news consumption, according to Pew:
1) 
Local – 37%
2) 
Cable – 28%
3) 
Network – 26%

Podcast: Local media’s last lover

More #1: No Standing Still For Lougee And Tegna

More #2: Survey: Local TV Station Execs Frustrated, Want Faster, Streamlined Ad Transaction

More #3: Streaming: Friend or Foe to Local Markets?

TiVo Video Trends Report: 2019-Q2

Streaming pay-TV (vMVPD) subscription share according to TiVo:
1) 
YouTube TV – 9%
2) 
Hulu Live – 7%
3) 
DirecTV Now – 4%
4) 
PlayStation Vue – 3%
5) 
Sling TV – 3%

Ad-supported streaming (AVOD) adoption by service:
1) 
Pluto TV – 19%
2) 
Tubi TV – 16%

% of customers who are “very satisfied” by service:
1) 
AVOD – 35%
2) 
SVOD – 35%
3) 
Traditional pay-TV – 27%
4) 
Streaming pay-TV – 17%
5) 
Broadcast TV – 14%

Other key findings:
1) $33 
is the ideal monthly amount
2) 21 is the ideal number of channels

More: Virtual Pay TV Services ‘Use’ Down Versus A Year Ago

RIAA Releases 2019 Mid-Year Music Industry Revenue Report

Mid-year revenue for the music industry according to the RIAA (YoY growth):
1) 
2017-1H – $4.2B
2) 
2018-1H – $4.6B (↑ 10%)
3) 2019-1H – $5.4B (↑ 17%)

Streaming now accounts for 80% of total music revenue!

Mid-year streaming revenue for the music industry (YoY growth):
1) 
2016-1H – $1.7B
2) 
2017-1H – $2.7B (↑ 59%)
3) 2018-1H – $3.4B (↑ 26%)
4) 2019-1H – $4.3B (↑ 26%)

Mid-year streaming subscribers for the music industry (YoY growth):
1) 
2016-1H – 20M
2) 
2017-1H – 32M (↑ 55%)
3) 2018-1H – 47M (↑ 49%)
4) 2019-1H – 61M (↑ 30%)

First-week album sales for Taylor Swift according to Nielsen:
1) 
1989 (2014) – 1.3M
2) 
Reputation (2017) – 1.2M
3) 
Red (2012) – 1.2M
4) 
Speak Now (2010) – 1.1M
5) 
Lover (2019) – 679K
6) 
Fearless (2008) – 592K
7) 
Taylor Swift (2006) – 39K

More #1: Is TikTok a time bomb?

More #2: Taylor Swift Confirms Plans to Rerecord Her Early Songs Following Scooter Braun Deal

Sports Betting Has Arrived to Transform the NFL. Or Not.

The NFL is slowly moving into the sports betting space with a recent data deal with Sportradar.

Who is Sportradar?  Sportradar is a Switzerland based company that collects and analyzes sports data for use in betting.  Their customer base includes 500+ sportsbooks, and they work with the NFL, NBA, MLB, and NHL.

Coming soon: This new data will allow for new types of bets such as how fast a running back will run on the next play since they will have trackers in their shoulder pads…

Quote from Hans Schroeder – EVP and COO @ NFL Media:
“Our partner will be situated in the stadium and with collection availability on really low-latency video that has the opportunity to be market-differentiated and not have to wait to collect a [data feed] from outside of the stadium,” 

Flashback: Nielsen projects NFL could make billions annually from gambling market

A recent study projects that legalized sports betting could add $2.3B per year in additional revenue to the NFL’s bottom line.

Estimated % increase in revenue:
1) Media rights – ↑ 18%
2) Sponsorship – ↑ 8%
3) Ticket sales – ↑ 7%

The big shift: Sports betting has been legal in New Jersey for less than a year, but it has already had a month where it outpaced Nevada.

Sports bets by state placed in May:
1) 
New Jersey – $318.9M
2) 
Nevada – $317.4M

More #1: As sports gambling becomes more mainstream, publishers place their own bets

More #2: Murdoch’s Fox launches sports betting with FOX Bet

More #3: Redskins to offer gambling-focused preseason telecast

A Look at the Data the NFL Is Using to Decide What Game to Broadcast in Your Area

Criteria used for selecting NFL games to broadcast include:
1) 
Past TV ratings
2) Local affiliate insights
3) Geographic rules
4) A few tbsp of “instinct”

Flashback: Why People in Mississippi Have to Watch the Giants

Why this matters: CBS, NBC, Fox, and ESPN will pay the NFL $5.6B this year for the right to air these games which makes maximizing viewership important.

Change in the couch: AT&T will pay the NFL $1.5B for the exclusive rights to NFL Sunday Ticket this year.

Average audience by season (YoY growth):
1) 
2015 – 18.7M
2) 
2016 – 16.5M (↓ 12%)
3) 2017 – 15.0M (↓ 9%)
4) 2018 – 15.8M (↑ 6%)

Average audience in 2018 by network:
1) 
Sunday Afternoon (Fox) – 23.1M
2) 
Sunday Afternoon (CBS) – 22.2M
3) 
Sunday Night (NBC) – 19.2M
4) 
Monday Night (ESPN) – 11.4M

The total audience for NFL Kickoff Game (Packers vs. Bears) according to NBC Sports (% of total):
1) 
Television – 22M (97%)
2) Streaming – 627K (3%)
3) Total – 23M

Video: Watch CNBC’s full interview with NFL Commissioner Roger Goodell

More #1: NFL takes a long view on ‘Sunday Ticket’

More #2: Mission Accomplished: ESPN’s Jimmy Pitaro Healing Fractured NFL Relationship

Netflix Forgoes Wide Release for Martin Scorsese’s ‘The Irishman’ 

Speaking of the future of movies: Major theatre owners and Netflix have not yet reached terms on an exclusive release window for Martin Scorsese’s upcoming film ‘The Irishman.’

Release dates for The Irishman:
1) Theatres – November 1st
2) Streaming – November 27th

What theatre owners want: A significant amount of time (90 days, etc.) where films are only available in theatres.

What Netflix wants: Major film releases on its platform that will drive subscription retention/growth.

What consumers want: Better choices at a lower cost 🙂

Interesting: 95% of movies stop earning their keep at the 42-day mark.

Cost comparison:
1) 
One pair of movie tickets – $18
2) 
One month of Netflix – $13

The exclusive window for theatre owners w/ recent Netflix films (days):
1) The Irishman – 26
2) 
Rona – 21
3) 
Birdbox – 7

Upcoming movie releases from Netflix w/ estimated cost:
1) Red Notice – $200M
2) 
6 Undergrounds – $170M
3) 
The Irishman – $150M

More #1: Netflix will release 10 fall films in theaters, well ahead of their streaming debuts

More #2: Netflix Under Pressure: Can a Hollywood Disruptor Avoid Getting Disrupted?

Hollywood’s Shaky Summer Box Office Points to Larger Issues

Summertime Blues: Despite record-breaking hits (Avengers: Endgame, etc.) annual movie ticket sales will most likely decline vs. 2018.

Why this matters: Summer accounts for as much as 40% of annual movie ticket sales.

Summer movie ticket sales (YoY growth) according to comScore:
1) 
2017 – $3.8B
2) 
2018 – $4.4B (↑ 15%)
3) 2019 – $4.3B (↓ 2%)

Annual movie ticket sales (YoY growth) according to Box Office Mojo:
1) 2010 – 1.3B 
2) 2011 – 1.3B (↓ 4%)
3) 2012 – 1.4B (↑ 6%)
4) 2013 – 1.3B (↓ 1%)
5) 2014 – 1.3B (↓ 6%)
6) 2015 – 1.3B (↑ 4%)
7) 2016 – 1.3B (↑ 0%)
8) 2017 – 1.2B (↓ 6%)
9) 2018 – 1.3B (↑ 6%)

Average ticket price (YoY growth):
1) 2010 – $7.89
2) 2011 – $7.93 (↑ 1%)
3) 2012 – $7.96 (↑ 0%)
4) 2013 – $8.13 (↑ 2%)
5) 2014 – $8.17 (↑ 0%)
6) 2015 – $8.43 (↑ 3%)
7) 2016 – $8.65 (↑ 3%)
8) 2017 – $8.97 (↑ 4%)
9) 2018 – $9.11 (↑ 2%)
10) 2019 – $9.01 (↓ 1%)

Quote from Chris Aronson – Former Distribution Chief @ 20th Century Fox:
“Pricing was never an impediment to going to the movies, and it is now…Streaming services have come along with such attractively priced entertainment that theaters can’t compete, except on a handful of event movies that people absolutely must see.”

The big question: Could variable pricing drive more ticket sales?

FYI: It is not just movie ticket sales that are down.

Entertainment choices down in 2019 vs. 2018:
1) 
Disney Theme Parks (tickets) – ↓ 3%
2) 
Broadway (tickets) – ↓ 3%
3) 
Movies (tickets) – ↓ 2%
4) 
National Parks (visits) – ↓ 1%

More #1: ‘Avengers: Endgame’ is now the highest-grossing film of all time, dethroning ‘Avatar’

More #2: How Will Movies (As We Know Them) Survive the Next 10 Years?

More #3: The Absurdities of ‘Franchise Fatigue’ & ‘Sequelitis’ 

Two Americas, tuning each other out

Worth the time: Axios breaks down the search volume for “Succession” vs. “WWE Raw” by media market to show that our TV viewing habits are as different as our politics depending on where you live.

Top TV shows by social media interaction in 2018 according to Nielsen:
1) 
The Bachelor (ABC) – 611K
2) 
WWE Monday Night Raw (USA) – 518K
3) 
America’s Got Talent (NBC) – 459K
4) 
American Idol (ABC) – 346K
5) 
WWE SmackDown! (USA) – 274K