Podcast Consolidation Gets Sirius

Big news: E.W. Scripps agreed to sell Stitcher to SiriusXM for $325M.

The bottom line: The E.W. Scripps podcast offering included the acquisition of Stitcher ($5M in 2016) and Midroll ($55M in 2015), meaning this could deliver a 442% return versus the original price.

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

Podcast advertising revenue by year (YoY growth) according to PwC:
1) 
2015 – $106M
2) 
2016 – $169M (↑ 59%)
3) 2017 – $314M (↑ 86%)
4) 2018 – $479M (↑ 53%)
5) 2019 – $708M (↑ 48%)
6) 2020P – $812M (↑ 15%)
7) 2021P – $1.3B (↑ 55%)
8) 2022P – $1.7B (↑ 36%)

Share of advertising revenue by objective:
1) 
Direct response – 54%
2) 
Brand awareness – 42%
3) 
Branded content – 3%
4) 
Product placement – 1%

Quote from Zoe Soon – VP of Consumer Experience Center @ IAB:
“The heart of podcasting has to date been direct-to-consumer, but more established brands are starting to look at podcasting.”

Average daily time spent listening to podcasts (YoY growth) according to eMarketer:
1) 2018 – 31m (↑ 21%)
2) 2019 – 36m (↑ 18%)
3) 2020P – 34m (↓ 7%)
4) 2021P – 35m (↑ 3%)
5) 2022P – 36m (↑ 2%)

Breaking News Is Breaking Records

Top TV networks by share of viewing time for June 2020 according to Inscape:
1) 
Fox News – 7%
2) 
NBC – 6%
3) 
ABC – 6%
4) 
CBS – 5%
5) 
Fox – 4%
6) 
CNN – 4%
7) 
HGTV – 3%
8) 
MSNBC – 3%
9) 
Food Network – 2%
10) 
TBS – 1%

Wow #1: Cable news accounted for 13% of total TV viewing time!

Thought bubble: Perhaps this is why CNBC is launching a prime-time news hour hosted by Shepherd Smith…

Cable news networks by the prime-time audience in June according to The AP:
1) 
Fox News – 4.1M
2) MSNBC – 2.5M
3) CNN – 2.0M

Wow #2: Fox News posted the largest average quarterly audience (4.3M for Tucker Carlson @ 8 p.m.) for any cable network ever!

More: Will Fox News Be A Victim Of The Shift To OTT?

NBCU’s Peacock Takes Flight, But Can It Soar Without Amazon and Roku?

Key details for Peacock:
1) 
Launching today
2) 20K hours of content on Peacock Premium (≈ 50% w/ free tier)
3) 600 movies + 400 TV series
4) 1K+ staff

Peacock is launching w/ three pricing tiers:
1) Free – 
Ad-supported w/ limited programming
2) Premium ($5) – Ad-supported w/ access to a larger content library
3) Premium Plus ($10) – Full access to programming + ad-free

Ad minutes per hour, according to NBCUniversal:
1) 
Linear TV – 16 – 20
2) 
Digital video – 8
3) 
Peacock – 5

Quick math on the advertising model for Peacock:
1) 
Ad minutes/hour – 5
2) 
30s spots/hour – 10
3) Ad revenue/user/month – ≈ $5.20 (see below)
3) CPM $ –  $30
4) $/spot – $0.03
5) Spots/month – 173
6) The service hits the revenue target at 17 hours/viewer/month

Quote from Linda Yaccarino – Chairman, Ad Sales and Partnerships @ NBCUniversal:
“We sell our inventory as one platform, so it’s linear TV and digital together.  The distinction between the two seems so yesterday.”

The dispute: Peacock will launch without Amazon or Roku due to a dispute around distribution terms, including the share of advertising that Amazon/Roku will be able to sell.  For example, Roku is reportedly asking for 30% of inventory, while Peacock is pushing for 15%.

Projected hours/user/month for ad revenue goal (% increase) for Peacock:
1) 
0% advertising split – 17
2) 
15% advertising split – 20 (↑ 18%)
3) 30% advertising split – 25 (↑ 25%)

Peacock financial estimates by 2024:
1) Accounts – 30M – 35M
2) Monthly revenue/user – $6 – $7
3) Total revenue –  $2.5B

More #1: Peacock, NBCUniversal’s New Streaming Service, Joins Crowded Field at Challenging Time

More #2: Peacock Launch Lineup: What’s on Free Streaming and Premium Tiers

More #3: NBCUniversal CEO Jeff Shell Has No Time for Hollywood Egos

Is Roku Getting Promoted To the G-Suite?

Rumor mill: Could Google buy Roku?

Roku market capitalization:
1) 
Today – $17B
2) 
Projected by 2026  – $90B

The bull case for Google buying Roku: Google has a market capitalization of ≈ $1T and ended 2020-Q1 with $117B in cash, meaning they could afford the transaction.

The bear case: Roku grew ad revenue by 78% in 2019 and may not be in a hurry to sell.

Roku advertising revenue (YoY growth):
1) 2017 – $225M
2) 2018 – $417M (↑ 85%)
3) 2019 – $741M (↑ 78%)

More: Roku Touts Flexibility to Woo Ad Dollars From Linear to Streaming

Now More Than Ever, Networks Need A Big Score From NFL Broadcasts

Bottom line: No NFL = trouble for TV networks.

Why this matters: The NFL accounted for 41 of the 50 most-watched TV programs in 2019 and is a significant driver for advertising revenue.

Quote from John Kosner – President @ Kosner Media:
“It’s practically the only thing on the minds of the networks. If you lost an NFL season, you’re looking at a financial hemorrhage.”

Advertising revenue by the network from NFL (% of total) according to iSpot:
1) Fox – $2.0B (40%)
2) CBS – $1.5B (25%)
3) NBC – $1.5B (20%)
4) ESPN – $500M (20%)

Advertising revenue by league:
1) 
NFL – $5.5B
2) 
NBA – $1.5B
3) 
MLB – $700M

Big question #1: Does the NFL need fans in the stadium to survey financially?

Quick answer: No. Stadium revenue accounts for ≈ 30% of the leagues $15B in revenue.

NFL average TV ratings for the regular season (YoY change):
1) 
2015 – 18.7M
2) 
2016 – 16.5M (↓ 12%)
3) 2017 – 15.0M (↓ 9%)
4) 2018 – 15.8M (↑ 6%)
5) 2019 – 16.5M (↑ 4%)

Quick math on NFL advertising revenue YoY (2018-19):
1) 
Viewership – ↑ 4%
2) Ad spend – ↑ 10%
3) # of spots – ↑ 2%
4) $/spot – ↑ 9%

More #1: If NFL can pull off playing 2020 season despite hurdles, expect the world to watch like never before

More #2: How NFL is set, if needed, to shake up its schedule

More #3: Meet the Magician of NFL Broadcasts

Full Circle: Streaming TV Prices Approach Cable Packages They Seek To Replace

Big news: YouTube TV and Fubo raised their live-TV prices to $65 per month.

Why this matters: Streaming pay-TV packages (vMVPDs) launched with low prices, but have increased steadily.

Key passage from Protocol:
“Let’s just call this what it is: cable! Sure, the apps are better and it’s easier to cancel…but this is just cable TV. Because it turns out, for all the tech companies’ wherewithal and leverage, they couldn’t break the way the TV business works.”

Bottom line #1: YouTube TV is losing money even after this increase due to its programming costs.  For example, the chart below shows a leaked example of programming costs from 2019.

Bottom line #2: Streaming pay-TV services cannot offer channels a la carte, which causes the base package price to increase as channels are added.

YouTube TV prices (YoY growth):
1) 2017 – $35
2) 2018 – $40 (↑ 14%)
3) 2019 – $50 (↑ 25%)
4) 2020 – $65  (↑ 30%)

YouTube TV subscribers (YoY growth):
1) 2017-Q4 – 300K
2) 2018-Q4 – 1M (↑ 233%)
3) 2019-Q4 – 2M  (↑ 100%)

Interesting: YouTube TV was already seeing a deceleration in sign-ups before the price increase.

More #1: RIP YouTube TV, you’ll make a great case study

More #2: Here are more streaming choices than ever — why are prices going up? 

Special Delivery? Amazon Looks To Add Live TV To Prime Video Empire

Big news #1: Several job posts by Amazon are fueling rumors that some form of live TV is coming to Prime Video.

Why this matters: Live TV combined with Amazon’s current on-demand service would give consumers more reason to become Prime members.

Quote from Amazon Prime Video job posting via LinkedIn:
“Although video on demand is on the rise, the global viewing hours weighs in favor of live or scheduled TV.”

Big news #2: A recent analysis from Needham estimated that Amazon’s media business is worth $500B or ≈ 4% of its total market capitalization.

Amazon’s media business includes:
1) 
Prime Video
2) Prime Music
3) Twitch
4) Advertising

Below is a recent pitch slide from Amazon Advertising:

Amazon advertising revenue (YoY growth) according to eMarketer:
1) 
2017 – $3.3B (↑ 186%)
2) 2018 – $7.4B (↑ 123%)
3) 2019P – $11.3B (↑ 53%)
4) 2020P – $15.0B (↑ 33%)
5) 2021P – $19.2B (↑ 28%)

FYI: Fire TV is coming to your car…

More #1: Amazon Just Made a Big Hire From Ad Agency Dentsu to Help It Take a Share of the $70 Billion TV-Advertising Business

More #2: Amazon Prime Video is Beta Testing a Watch Party Feature

More #3: Amazon Prime Video: Everything You Need to Know About the Most Powerful Empire in Video Streaming

OTT Peak Engagement Levels Here To Stay (At Least For Now)

CTV/OTT viewing households by year (YoY growth) according to Comscore:
1) 
2016 – 44.0M
2) 2017 – 50.8M (↑ 15%)
3) 2018 – 59.2M (↑ 17%)
4) 2019 – 64.0M (↑ 7%)
5) 2019 – 70.2M (↑ 10%)

YoY change in reach by platform:
1) 
CTV/OTT – ↑ 6.1M (↑ 10%)
2) VOD – ↑ 1.9M (↑ 7%)
3) Live TV – ↓ 1.2M (↓ 1%)
4) DVR – ↓ 3.0M (↓ 4%)

YoY change in total monthly hours viewed:
1) 
CTV/OTT – ↑ 1.4B (↑ 27%)
2) Live TV – ↑ 792M (↑ 3%)
3) VOD – ↑ 97.4M (↑ 27%)
4) DVR – ↓ 12.4M (↓ 0%)

YoY change in monthly hours viewed per household:
1) 
Live TV – ↑ 30 (↑ 12%)
2) DVR – ↑ 12 (↑ 14%)
2) CTV/OTT – ↑ 8 (↑ 12%)
4) VOD – ↑ 2 (↑ 14%)

YoY change in reach by revenue model:
1) 
Ad-supported – ↑ 4.8M (↑ 9%)
2) Subscription – ↑ 2.8M (↑ 5%)

Share of Smart TV market by manufacture:
1) Samsung – 32%
2) TCL – 14%
3) Vizio – 13%
4) LG – 12%
5) Hisense – 5%
6) Insignia – 5%
7) Sony – 3%
8) Sharp – 3%
9) Other – 13%

More: Comscore: The State of OTT (June 2020)

Converting to Convergence: 83% of Ad Buyers Now Plan TV and Digital Together

Share of buying firms that have converged video buying into a single team according to the IAB:
1) 
2017 – 40%
2) 
2018 – 46%
3) 
2019 – 61%

Share of video buying/planning functions that have converged into a single team:
1) 
Planning – 83%
2) 
Optimization – 74%
3) 
Reporting/Insights – 67%
4) 
Buying/Execution – 66%

Benefits of video ad buying/planning convergence:
1) Cost-efficient – 57%
2) 
Optimization – 47%
3) 
Cross-Screen measurement – 44%
4) 
Incremental reach – 43%

Challenges facing video ad buying/planning convergence:
1) 
Tracking/reporting – 38%
2) 
No single reach/frequency – 31%
3) 
Buyer/Seller silos – 29%

More: IAB: CTV Ad Spend Unfazed By COVID; Addressable Also Set To Benefit

You’ve Shared Your Netflix Password With Your Entire Family. Now You Can’t Watch Netflix.

Password123: Roughly 1/3 of SVOD subscribers have shared their password with someone outside of their household.

Flashback: Cable TV’s Password-Sharing Crackdown Is Coming

Wow: 1 Spectrum username had 30K simultaneous streams!

Share of SVOD subscribers who shared their password outside of household according to HUB Research Group:
1) 13-24 – 64%
2) 35+ – 16%
3) All subscribers – 31%

Streaming services with the highest rate of password sharing:
1) 
Netflix – 56%
2) 
Disney+ – 31%
3) 
Hulu – 30%
4) 
Apple TV+ – 17%
5) 
Amazon – 14%

Big question #1: How much is password sharing costing companies?

Loss of revenue due to password sharing, according to Parks Associates:
1) 
2019 – $9.1B
2) 
2024P – $12.5B

Big question #2: Who pays for the various video services?

More #1: Now you can share your Netflix account just by sending a link

More #2: Subscription Mooching & Streaming Media