Netflix, HBO and Cable Giants Are Coming for Password Cheats

Password123: A coalition of media companies, including HBO and Netflix, are working on a plan to limit password sharing.

Password sharing by platform according to MoffettNathanson:
1) 
Netflix – 14%
2) 
Hulu – 11%
3) 
Amazon – 6%

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

Spectrum username had 30K simultaneous streams!

ESPN asked a group of 50 millennial sports fans if they shared passwords.  All 50 raised their hands!

# of simultaneous users that each service allows:
1) Netflix – 4
2) HBO – 3
3) DirecTV (Satelite) – 5

Ideas for reducing password sharing:
1) Limit concurrent streams
2) Force more frequent logins

Projected revenue loss due to password sharing (% change) according to Parks Associates:
1) 2017 – $3.5B
2) 2021 – $9.9B (↑ 183%)

Alternative take: Matthew Ball provides a smart use case for why password sharing may be driving higher revenue.

More #1: Love Is Fleeting, But Netflix Passwords Are Forever

More #2: Sharing your TV streaming passwords? Cable companies won’t stop you—yet

More #3: Disney fights streaming account sharing with help from cable industry

The Great Streaming Battle Is Here. No One Is Safe.

The big question: How much are customers willing to pay for streaming video services?

Average monthly streaming video subscription spend according to The Harris Poll (% change):
1) 
Current amount – $14
2) 
Willing to pay – $44 (↑ 215%)

Traditional pay-TV subscribers (% change) according to AllianceBernstein:
1) 
2014 – 100M
2) 
2022P – 78M (↓ 22%)

More #1: The Mining of Media (or The “Streaming Wars” are Just a Battle)

More #2: Where Do Niche Streamers Fit In a Sea of Services?

More #3: Everyone’s Wrong About the Streaming Wars

Roku Surpasses 10 Billion Streaming Hours in Q3, Beats Earnings Expectations

Key numbers from Roku’s Q3 earnings:
1) 1.8M
 active accounts added
2) 32.3M total active accounts
3) 79% YoY increase in advertising revenue
4) 66% YoY increase in streaming hours/account

Roku active accounts (YoY growth):
1) 2016-Q3 – 11.3M
2) 2017-Q3 – 16.7M (↑ 48%)
3) 2018-Q3 – 23.8M (↑ 43%)
4) 2019-Q3 – 32.3M (↑ 36%)

Roku advertising revenue (YoY growth):
1) 2016-Q3 – $22M
2) 2017-Q3 – $58M (↑ 158%)
3) 2018-Q3 – $100M (↑ 74%)
4) 2019-Q3 – $179M (↑ 79%)

Roku advertising revenue per account (YoY growth):
1) 2016-Q3 – $1.97
2) 2017-Q3 – $3.44 (↑ 75%)
3) 2018-Q3 – $4.21 (↑ 22%)
4) 2019-Q3 – $5.55 (↑ 32%)

Roku total streaming hours (YoY growth):
1) 2016-Q3 – 2.4B
2) 2017-Q3 – 4.8B (↑ 100%)
3) 2018-Q3 – 6.2B (↑ 29%)
4) 2019-Q3 – 10.3B (↑ 66%)

Roku streaming hours per account (YoY growth):
1) 2016-Q3 – 212
2) 2017-Q3 – 287 (↑ 35%)
3) 2018-Q3 – 261 (↓ 9%)
4) 2019-Q3 – 319 (↑ 22%)

Roku advertising revenue per streaming hour (YoY growth):
1) 2016-Q3 – $0.009
2) 2017-Q3 – $0.012 (↑ 29%)
3) 2018-Q3 – $0.016 (↑ 35%)
4) 2019-Q3 – $0.017 (↑ 8%)

Quote from Anthony Wood – CEO @ Roku:
“We think eventually all TV will be streamed”

More: Roku is hot, but it may need to sell if it wants to take over the TV ad business

Video: How Will Roku-dataxu Change Advertising?: Forrester’s O’Connell

US Connected TV Ad Spending Will Grow Nearly 40% in 2019

Connected TV ad spend (YoY growth) according to eMarketer:
1) 
2019P – $7B (↑ 38%)
2) 2020P – $9B (↑ 28%)
3) 2021P – $11B (↑ 22%)
4) 2022P – $12B (↑ 16%)
5) 2023P – $14B (↑ 13%)

Connected TV users (YoY growth):
1) 
2019P – 195.1M (↑ 5%)
2) 2020P – 201.7M (↑ 3%)
3) 2021P – 206.7M (↑ 2%)
4) 2022P – 210.7M (↑ 2%)
5) 2023P – 214.4M (↑ 2%)

Quick math on connected TV ad spend per user (YoY growth):
1) 
2019P – $35.38
2) 2020P – $44.02 (↑ 24%)
3) 2021P – $52.30 (↑ 19%)
4) 2022P – $59.27 (↑ 13%)
5) 2023P – $65.85 (↑ 11%)

Quote from Jeff Green – CEO @ The Trade Desk:
“There is nothing I’m more excited about, nothing more game-changing than what is happening in connected TV.”

More #1: Connected TV advertising to hit $7 billion this year

More #2: Why CTV Is The Trade Desk’s Biggest Focus Of 2020

More #3: 2 Of 3 Who Stream Now Watch TV Mostly By Streaming – But There’s A Catch

Facebook Earnings Soar as Zuckerberg Warns of ‘Tough Year’ Ahead Politically

Evergreen story: Facebook faces turmoil while it’s business keeps crushing it!

Facebook advertising revenue (YoY growth):
1) 
2015-Q3 – $4.3B
2) 
2016-Q3 – $6.8B (↑ 59%)
3) 2017-Q3 – $10.1B (↑ 49%)
4) 2018-Q3 – $13.5B (↑ 33%)
5) 2019-Q3 – $17.4B (↑ 28%)

Facebook advertising revenue per user in the U.S. and Canada (YoY growth):
1) 
2015-Q3 – $9.86
2) 
2016-Q3 – $15.08 (↑ 53%)
3) 2017-Q3 – $20.69 (↑ 37%)
4) 2018-Q3 – $27.11 (↑ 31%)
5) 2019-Q3 – $33.86 (↑ 25%)

Facebook daily active users in the U.S. & Canada (YoY growth):
1) 2015-Q3 – 167M
2) 
2016-Q3 – 178M (↑ 7%)
3) 2017-Q3 – 185M (↑ 4%)
4) 2018-Q3 – 185M (↑ 0%)
5) 2019-Q3 – 189M (↑ 2%)

Quote from Mark Zuckerberg – CEO @ Facebook:
“Over the next year of campaigns, we are going to be at the center of the debate… I expect this is going to be a very tough year.”

Video: Facebook’s Sandberg: Political Ads Are Important Part of the Dialogue

More: Facebook is gearing up for a year from hell in 2020, Mark Zuckerberg warns: ‘This is going to be a very tough year’

The One Where Apple Tried to Buy Its Way Into Hollywood

Apple is making a big move into the streaming wars with the November 1st launch of Apple TV+.

The Big Picture: Apple generated $13.7B in profit last quarter, but iPhone sales dropped 9%.  The iPhone is no longer a growth story, and the company is preparing for a future driven by services and/or subscription revenue.

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

Apple’s revenue from services (YoY growth):
1) 
2016 – $24.3B
2) 
2017 – $30.0B (↑ 23%)
3) 2018 – $37.2B (↑ 24%)
4) 2020P – $48.6B

Quick math on the potential opportunity for Apple TV+:
1) Global Apple customers – ≈ 900M
2) Conversion rate – 10%
3) The potential customer base for Apple TV+ – 90M
4) Monthly subscription cost – $10
5)
 Revenue/month – $900M
6) Revenue/year – $10.8B

More #1: Apple Plays the Underdog in Streaming Wars

More #2: Apple TV Plus Chiefs on Building the Ambitious Video Venture From Scratch

More #3: Inside Apple’s High-Flying Bid to Become a Streaming Giant

AT&T Lays Out Price, Show Lineup for HBO Max

Key details for HBO Max:
1) 
May 2020 launch
2) $14.99 monthly cost (*free for current HBO subscribers)
3) 10,000 hours of content
4) 1,800 movies

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

Video #1: Video-Streaming Services Battle for Subscribers

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%)

HBO original series by year (YoY growth):
1) 2020 – 69
2) 2021 – 88 (↑ 28%)

Domestic net investment for HBO Max:
1) 2019 – ↓ $100M
2) 2020 – ↓ $2B
3) 2021 – ↓ $1B
4) 2022 – ↓ $1B
5) 2023 – ↓ $500M
6) 2024- ↓ $200M
6) 2025 – ↑ $1B

Video #2: Watch the 78-Second Sizzle Reel For HBO Max, WarnerMedia’s New Streaming Service

More #1: The hidden problem with HBO Max’s service plan

More #2: HBO Gives Us A Clue, But We Still Can’t Solve The Puzzle

Baseball Has Its Issues, But Declining TV Ratings Isn’t One of Them

The bad news: World Series viewership declined for the third year straight.

The good news: Viewership declined at a lower rate for the World Series compared to broadcast TV as a whole, and only the NFL pulls in more viewers.

Total broadcast viewership for primetime (YoY growth):
1) 
2017-18 – 26.7M
2) 
2018-19 – 24.7M (↓ 7%)

Total broadcast viewership for the World Series (YoY growth):
1) 
2018 – 14.1M
2) 
2019 – 13.6M (↓ 4%)

World Series viewership by year (YoY growth):
1) 
2009 – 19.3M
2) 
2010 – 14.2M (↓ 26%)
3) 2011 – 16.5M (↑ 16%)
4) 2012 – 12.6M (↓ 24%)
5) 2013 – 15.0M (↑ 19%)
6) 2014 – 13.9M (↓ 7%)
7) 2015 – 14.5M (↑ 4%)
8) 2016 – 22.8M (↑ 57%)
9) 2017 – 18.9M (↓ 17%)
10) 2018 – 14.1M (↓ 25%)
11) 2019 – 13.6M (↓ 4%)

Estimated World Series advertising (YoY growth) according to iSpot.tv:
1) 
2018 – $215.8M
2) 
2019 – $253.9M (↑ 18%)

More #1: Why Fox isn’t sweating the low-rated World Series: Sports Media Brief

More #2: Advertisers flood World Series in search of D.C. opinion leaders

Disney Over the Top: Bob Iger Bets the Company (and Hollywood’s Future) on Streaming

Disney+ is set to launch on November 12th and should get a boost from the announcement that ≈ 50M Verizon subscribers will get their first year of the service for free!

Updated subscriber projections for Disney+ from MoffettNathanson:
1) 
2019P – 8M (↑ 6M)
2) 2020P – 18M (↑ 8M)

Estimated losses from Disney+ between 2019-20:
1) 
2019 – $4.1B
2) 
2020 – $4.9B

FYI #1: Disney may have some extra cash in the couch cushions after becoming the first studio to have 5 movies top $1B+ in a single year.

FYI #2: Disney still has Frozen 2 and Star Wars: The Rise of Skywalker coming out this year, giving them a shot at 7!

h/t: to the team @ Morning Brew for putting this together!

Video: Disney CEO Bob Iger on Disney+ deal with Verizon and the future of the industry

More #1: Disney Plus: Launch dates, prices, preorders, shows and movies to expect

More #2: Inside Disney’s New York Stream Factory

More #3: The Slow-Burning Success of Disney’s Bob Iger

‘Sesame Street’ Moves to HBO Max in Five-Season Deal

Can you tell me how to get?  How to get to HBO Max…

The forthcoming streaming service will be home to the next five seasons (2020-24) of Sesame Street, along with its entire back catalog.

Key details for Sesame Street:
1) Launched in 1969
2) 50 seasons
3) 4,481 episodes
4) 150+ versions in 70+ languages

The big question: How important is children’s programming in the Streaming Wars?

60% of the global audience for Netflix watches children’s programming, and 11% of their content budget is spent on animation.

Change in viewership between 2016-18 according to MoffettNathanson:
1) Cartoon Network – ↓ 29%
2) Nickelodeon – ↓ 23%

More #1: Walmart-Owned Vudu Wants To Be The Streaming Platform For Families (Who Shop At Its Stores)

More #2: Tubi to Launch Tubi Kids, U.K. Offshoot

More #3: Roku Channel Adds Kids Destination, Joining Family Streaming Derby