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

Pluto TV Expects to Reach 30 Million Users This Year

PlutoTV monthly viewers (YoY growth):
1) 
2016 – 5M
2) 
2018 – 12M
3) 
2019 – 22M (↑ 87%)
4) 2020P – 30M (↑ 34%)

Quote from Andrew Rosen – Founder @ PARQOR:
“My two cents is AVOD service PlutoTV is one of the smartest investments Viacom ever made, perhaps THE smartest digital media investment it has ever made (NOTE: I say this as someone who worked on operationally integrating major digital acquisitions like AtomFilms and Shockwave, and gaming freeware instant messaging service Xfire, at Viacom 15 years ago). I also think CBS Interactive CEO Marc Debevoise is one of the smartest executives in the streaming space, and both CBS All-Access and Pluto TV are therefore in unusually capable hands.”

Flashback: ViacomCBS’s Parts Might Add Up to a Greater Whole

More #1: Seeking More Control Of Its Streaming Destiny, ViacomCBS Won’t Sell Off “Critical Mass” Of Its Content, CEO Bob Bakish Asserts

More #2: Coronavirus Is Accelerating Pluto TV’s Already Massive Growth

More #3: ViacomCBS Plans to Rebrand CBS All Access and Launch International Streaming Platform

GroupM Predicts 13 Percent Decline in 2020 U.S. Ad Spend

Global ad market (YoY growth) according to GroupM:
1) 
2012 – $408.0B
2) 
2013 – $421.7B ( 3%)
3) 2014 – $437.7B ( 4%)
4) 2015 – $458.3B ( 5%)
5) 2016 – $482.9B ( 5%)
6) 2017 – $516.2B ( 7%)
7) 2018 – $552.7B ( 7%)
8) 2019 – $587.0B ( 6%)
9) 2020P – $517.5B (↓ 12%)
10) 2021P – $559.8B ( 8%)
11) 2022P – $586.4B ( 5%)
12) 2023P – $607.6B ( 4%)
13) 2024P – $633.1B ( 4%)

Global GDP vs. global ad spend according to GroupM:

YoY growth for the U.S. ad market:
1) 2009 – ↓ 16%
2) 2020 – ↓ 13%

Quote from Brian Wieser – Global President, Business Intelligence @ GroupM:
“That we ‘only’ expect a 13% decline is surprising.  We might normally expect that because the 2020 economic decline is so much worse than 2009, advertising should be much weaker.”

Flashback: Political Ads Expected to Explode, Even as Economy Tanks

Wow: The political video ad market is growing (CAGR) at a rate of 26%!

Global TV ad market (YoY growth) according to GroupM:
1) 
2012 – $154.3B
2) 
2013 – $158.8B ( 3%)
3) 2014 – $163.1B ( 3%)
4) 2015 – $164.0B ( 1%)
5) 2016 – $166.8B ( 2%)
6) 2017 – $165.2B ( 1%)
7) 2018 – $165.8B ( 0%)
8) 2019 – $164.5B ( 1%)
9) 2020P – $135.5B (↓ 18%)
10) 2021P – $143.5B ( 6%)
11) 2022P – $146.4B ( 2%)
12) 2023P – $149.2B ( 2%)
13) 2024P – $153.0B ( 3%)

Big question #1: How big of an impact is this slowdown having on ad prices?

Scatter ad prices (YoY growth) for big 3 TV networks, according to SQAD:
1) 2019-Q2 – $142K
2) 2020-Apr – $102K (↓ 28%)

Big question #2: Do buyers believe that we have hit bottom yet?

Share of buyers that believe that ad spending has bottomed out according to Pivotal Research Group:
1) April – 51%
2) May – 57%

More #1: The TV Commercial, Once Advertising’s Main Event, Suffers in the Pandemic

More #2: The History Of Advertising In A Recession

Discovery Reviews Production Costs After Saving on Low-Budget Quarantine Shows

Wow: Discovery sent video kits out to cast members’ homes and saved $300K per hour in production costs!

The home video kit included:
1) Camera
2) iPhone
3) Tripods

FYI: Discovery spent $3.3B on content last year.

Quote from Gunnar Wiedenfels – CFO @ Discovery:
“We have been creating some very successful content with very scrappy equipment.  It felt the more real and authentic the content became during the crisis, the better it worked with our audience.”

Big question: When will non-remote film and television production be able to resume?

Quick answer: California is starting to open up, but most don’t expect much until late-July.

Scripted television projects by location according to FilmLA:
1) 
California – 72
2) 
New York – 29
3) 
British Columbia – 24
4) 
Georgia – 20
5) 
Other – 22

Domestic feature films by state according to Film LA:
1) California – 62
2) 
New York – 57
3) 
Georgia – 36
4) 
Massachusetts – 10
5) 
Illinois – 8
6) 
Louisiana – 8
7) 
Nevada – 7
8) 
New Mexico – 7
9) 
Other – 62

More #1: TV Execs, Writers Grapple With COVID-19 Era Scripts: “We’re Not Going to Be Able to Shoot It, So Don’t Write It”

More #2: Coronavirus Impact on Entertainment – Film and TV Production

Loyalty Becomes a “Sticking Point” in a Competitive Streaming Environment

Share of SVOD subscribers still active after one year according to ANTENNA:
1) 
Netflix – 65%
2) 
Hulu – 50%
3) 
CBS All Access – 49%
4) 
Starz – 48%
5) 
Showtime – 44%
6) 
HBO Now – 43%

Share of SVOD subscribers that cancel within three months:
1) Showtime – 34%
2) 
HBO Now – 31%
3) 
CBS All Access – 29%
4) 
Starz – 27%
5) 
Netflix – 23%
6) 
Hulu – 18%

Share of respondents who selected various services with $50 to spend according to Corus:
1) 
Netflix – 84%
2) 
Hulu – 57%
3) 
Disney+ – 49%
4) 
Amazon Prime – 48%
5) 
CBS All Access – 16%
6) 
Showtime – 13%
7) 
HBO – 12%
8) 
Apple TV+ – 12%
9) 
Starz – 10%

Average monthly household streaming video cost (% change) according to the Harris Poll:
1) 
Nov-19 – $30
2) 
Mar-20 – $37 (↑ 23%)

Share gain for streaming hours between February and March according to Comscore:
1) 
Netflix – ↑ 1.5%
2) 
Amazon Prime – ↑ 1.5%
3) 
Disney+ – ↑ 0.5%
4) YouTube – ↓ 0.1%
5) 
Other – ↓ 0.5%
6) Hulu – ↓ 2.9%

Time spent with SVOD services according to eMarketer:
1) 
2018 – 0h 44m (↑ 20%)
2) 2019 – 0h 51m (↑ 15%)
3) 2020P – 1h 2m (↑ 23%)
4) 2021P – 1h 7m (↑ 7%)
5) 2022P – 1h 10m (↑ 5%)

Podcast: The Streaming ‘Infinity War’

More #1: The Ringer’s Guide to Which Streaming Service Is Right for You

More #2: Content, Cars, and Comparisons in the “Streaming Wars”

More #3: Premium Entertainment Streaming Services during COVID-19

On Addressability Ad Initiative Has Its First Member: AMC Networks

Big news: AMC has signed onto On Addressability, the addressable TV initiative launched with Comcast, Cox, and Charter’s Spectrum Reach last June.

Why this matters: Addressable TV advertising is primarily confined to the 2 minutes per hour that the local distributor (MVPD, etc.) can sell.  This initiative aims to apply addressability from Comcast/Cox/Charter to the ≈ 14 minutes per hour that the network sells.

Ad minutes per hour (% of total):
1) 
National – 14 (87%)
2) Local – 2 (13%)

≈ 5-15% of Spectrum Reach’s linear inventory is used for addressable advertising.

Bottom line: Pay-TV providers can offer addressable advertising, but they only account for ≈ 3% of all TV ad impressions.  Initiatives such as On Addressability or Project OAR offer a potential 10X increase in addressable TV ad impressions.

Quote from David Kline – President @ Charter’s Spectrum Reach:
“If TV could act more like digital and get richer metrics and be able to, in a privacy-compliant way, help target [viewers] that focuses on audiences versus ratings, they would have something. Now they do. Now they have an opportunity to compete and make their networks more powerful through enablement through MVPDs (multichannel video programming distributors),”

Flashback #1: OpenAP and NCC Media partner to expand advanced advertising on TV

Flashback #2: Who Sells What? NCC Media And Xandr Aim To Consolidate The Confusing Addressable TV Market

Addressable TV spend by year (YoY growth) according to eMarketer:
1) 
2016 – $760M
2) 
2017 – $970M (↑ 28%)
3) 2018 – $1.5B (↑ 51%)
4) 2019P – $2.0B (↑ 37%)
5) 2020P – $2.9B (↑ 44%)
6) 2021P – $3.5B (↑ 21%)

More #1: Why Addressable Advertising Is Finally Getting Closer To Mass Adoption

More #2: Comcast opens cable box VOD content to programmatic ads

More #3: Interview With Addressable TV Market Maker Tracey Scheppach

Why the N.B.A. Is Planning on Going to Disney World

Key details for NBA re-start:
1) All games played at the 220-acre ESPN Wide World of Sports Complex
2) No fans
3) The regular season resumes on July 31st
4) Abbreviated training camp set to start July 9th
5) 22 teams
6) 88 games total (8 games per team)

Big question #1: Why is the NBA re-starting the season when fans cannot attend the games?

Quick answer: TV revenue.  The NBA generates ≈ $2.6B/year from national TV deals alone.

NBA TV rights fees/year (% change) by deal according to Sports Business Journal:
1) 
2002-08 – $767M
2) 
2008-16 – $930M (↑ 62%)
3) 2016-25 – $2.6B (↑ 215%)

Big question #2: How big will the viewership be?

Mr. Screen’s Crystal Ball: Huge.  Even though ratings through the All-Star Break were down 10%+ YoY, 6M people recently spent 20 hours watching a documentary about basketball!

YoY viewership change for NBA basketball through the All-Star Break according to Sports Business Journal:
1) 
ESPN – ↓ 10%
2) All National – ↓ 12%
3) TNT – ↓ 13%
4) Local RSNs – ↓ 13%
5) ABC – ↓ 16%

Top 5 teams for YoY viewership gains (RSN only):
1) Los Angeles Clippers – ↑ 86%
2)
 Orlando Magic – ↑ 82%
3)
 Atlanta Hawks – ↑ 49%
4)
 Miami Heat – ↑ 39%
5)
 Milwaukee Bucks – ↑ 24%

Bottom 5 teams for YoY viewership gains (RSN only):
1) Denver Nuggets – ↓ 72%
2)
 Golden State Warriors – ↓ 66%
3)
 Washington Wizards – ↓ 55%
4)
 Charlotte Hornets – ↓ 52%
5)
 Oklahoma City Thunder – ↓ 51%

Big question #3: Why 22 teams?

Quick answer: The NBA made the cut at 22 teams so that any team within 6 games of the final playoff spot could play on.

Big question #4: Why 88 games?

Quick answer: This number was not accidental.  It will allow the league/teams to fulfill minimum game requirements from TV deals.  For example, the Los Angeles Lakers generate $1.5M/game from their local (RSN) deal with Spectrum SportsNet.

Bottom line: 259 games remained in the regular season, so 66% of these games will be canceled.

Key details for the NBA “bubble”:
1) ≈ 1,500 people will be inside
2) 28 total per team
3) 15 players per team
4) 4 coaches per team
5) 5 trainers/strength coaches
6) 4 others (equipment manager, PR, logistics and security) per team
7) 300-350 hotel workers

More #1: Why the NBA Could (and Should) Look More Like the World Cup

More #2: Is the NBA Worth All That TV Money?