Connected TV Usage Remains Above Pre-COVID-19 Levels as Traditional TV Viewing Normalizes

Big question #1: How much has streaming grown during the lockdown?

Weekly hours spent watching CTV/OTT (WoW growth) according to Nielsen:
1) 
3/2 – 2.7B 
2) 3/9 – 2.9B (↑ 7%)
3) 3/16 – 3.8B (↑ 31%)
4) 3/23 – 3.9B (↑ 3%)
5) 3/30 – 3.9B (↑ 0%)
6) 4/6 – 3.9B (↑ 0%)
7) 4/13 – 3.8B (↓ 3%)
8) 4/20 – 3.7B (↓ 3%)
9) 4/27 – 3.6B (↓ 3%)
10) 5/4 – 3.5B (↓ 3%)

Share of U.S. homes w/ CTV/OTT device according to Leichtman Research Group:
1) 2010 – 24%
2) 2015 – 57%
3) 2018 – 74%
4) 2020 – 80%

Big question #2: How much has ad-supported streaming grown during the lockdown?

YoY increase in CTV/OTT ad inventory according to The Trade Desk:
1) February – ↑ 35%
2) March – ↑ 57%
3) April – ↑ 54%

Share of CTV viewing time in 2020-Q1 according to Hedgeye:
1) Roku – 44%
2) Fire TV – 19%
3) XBOX – 10%
4) Apple TV – 8%
5) Other – 7%
6) Chromecast – 6%
7) Playstation – 5%
8) Samsung – 1%

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%)

More #1: ‘Hard to figure out the best route’: Ad buyers wrestle with how to buy connected TV ads

More #2: The Trade Desk CEO Jeff Green on Google, Netflix and the death of linear TV

More #3: Connected TV advertisers gravitate to multi-DSP model as Amazon, Roku push their own bidders

Disney Wants Advertisers to Buy Hulu, TV Networks Together

Cross Screen: Disney is launching an offering called Disney Hulu XP that will combine Hulu and Disney’s TV networks into a single buy.

Disney Hulu XP networks include:
1) 
Hulu
2) Freeform
3) ABC
4) ESPN

Quote from Nicolle Pangis – CEO @ Ampersand:
“Consumers don’t care where or how they are watching. Whether it’s linear, OTT, or VOD, to them it’s all TV.

For the industry, it’s much more complex. By splintering into separate camps and platforms, we’re not delivering on the most important part of TV’s transformation from traditional demographic buying to audience-based buying. Namely, making it easier for advertisers to reach highly specific audience segments at scale wherever, whenever and however they’re watching.”

Other details: Disney will price digital media based on completed views and will package with an attribution offering powered by Samba TV.

Flashback: NBCUniversal Aims to Merge TV and Digital Ad Buying With New Tech

U.S. agencies that buy TV and digital video w/ single team according to eMarketer:
1) 
2017 – 40%
2) 
2018 – 46%
3) 
2019 – 61%

More #1: TV Advertising’s Watershed Moment: It Is Finally Becoming More Like Digital

More #2: Four Decades of Pent-Up Need For Changes Will Upend TV Ad World

More #3: Opinion: It would be easier if we could just buy ‘TV’

Box Office Will Plunge 50% Due to Coronavirus Closures, Analyst Predicts

U.S. movie ticket revenue (YoY growth) according to Box Office Mojo:
1) 
2010 – $10.6B
2) 2011 – $10.2B  (↓ 4%)
3) 2012 – $10.8B  (↑ 7%)
4) 2013 – $10.9B  (↑ 1%)
5) 2014 – $10.4B  (↓ 5%)
6) 2015 – $11.1B  (↑ 7%)
7) 2016 – $11.4B  (↑ 2%)
8) 2017 – $11.1B  (↓ 3%)
9) 2018 – $11.9B  (↑ 7%)
10) 2019 – $11.3B  (↓ 5%)
11) 2020P – $5.5B (↓ 51%)
12) 2021P – $9.7B (↑ 76%)

Big question #1: Who buys movie tickets, and when will they return to theatres?

Movie tickets sold by age group (h/t: Matthew Ball):
1) 25-39 – 25%
2)
 60+ – 15%
3)
 40-49 – 15%
4)
 18-24 – 13%
5)
 50-59 – 11%
6)
 12-17 – 11%
7)
 2-11 – 10%

Share that said attending a big event “will scare me for a long time” according to Performance Research & Full Circle Research:
1) March – 44%
2) May – 60%

Upcoming major releases, according to LightShed Partners:
1) Tenet (Warner Bros – 7/17)
2) Mulan (Disney – 7/24)
3) The SpongeBob Movie (Paramount – 8/7)
4) The Wonder Woman, 1984 (Warner Bros – 8/14)
5) The New Mutants (Disney/Fox – 8/28)

Quick math on the potential impact for major releases:
1) Indoor movie theatres – 5,500
2) Individual movie screens – 40,613
3) Seats/screen – 150 – 750 (≈ 615)
4) Total seats in all theatres – ≈ 25M
5) Average ticket price – $9.15
6) Tickets needed for $1B – 109M
7) Tickets sold per seat for $1B – 4
8) Tickets sold per seat w/ 25% reduction – 6
9) Tickets sold per seat w/ 50% reduction – 9

Big question #2: How much would consumers be willing to pay to watch first-run releases at home?

The price consumers are willing to pay to watch first-run releases at home according to Performance Research & Full Circle Research:
1) $10 – 47%
2) $20 – 20%
3) Free – 19%
4) 
$30 – 6%
5) 
$40+ – 6%
6) Other – 2%

Big question #3: How much revenue do movie theatres generate from concessions?

Typical markup (% of total) for movie theatre popcorn according to The Hustle:
1) Cost (COGS) – $0.90 (11%)
2) Markup (gross profit) – $7.10 (89%)
3) Retail price – $8.00

Movie theatre inflation since 1929:
1) Ticket prices – ↑ 108%
2) Popcorn – ↑ 1,188%

Share of revenue that movie theatres share with studios:
1) Ticket sales – 70%
2) Concessions – 0%

More #1: Why Is Comcast Declaring War on Movie Theaters? Simple — They Want Wall Street To Value Them Like A Tech Titan

More #2: AMC Theatres Won’t Play Universal Movies in Wake of ‘Trolls World Tour’ Dispute

More #3: Korean Box Office Has Yet to Find Post-Coronavirus New Normal

Instagram Will Help Its Stars Make More Money, Taking on YouTube

Big news #1: 15s pre-roll ads are coming to Instagram’s longer-form video service IGTV.

Why this matters: IGTV is not off to a strong start, and a big part is the lack of monetization options for creators.  All ad revenue is split between Instagram and the creator which should help.

Quick math on IGTV adoption:
1) 1B+ Instagram users
2) IGTV launched 18+ months ago
3) 1.1M app downloads for IGTV
4) 0.1% of Instagram users have downloaded the IGTV app

Ad revenue split for IGTV video ads:
1) 
Creator – 55%
2) 
Instagram – 45%

Big news #2: Custom audience targeting is coming to Facebook Watch.

Why this matters: Facebook can’t hit its revenue targets without significant growth in video advertising.

Key details for Facebook Watch:
1) 
Viewers/month – 720M
2) 
Viewers/day – 140M
3) 26 
minutes per month for the average viewer

BTW: Facebook counts a view once a user watches 60 consecutive seconds of content.

Big news #3: Facebook will use a TV-like currency (targeted rating points) with Facebook Watch video ads.

Quote from Erik Geisler – Director of Agency Partnerships @ Facebook:
“If we’re not delivering TRPs [television rating points], for example, we’re speaking a different language and that makes it hard for an agency to build more expansive plans.”

Social video ad spending by year (% growth) according to eMarketer:
1) 2017 – $5.7B
2) 2018 – $8.2B (↑ 46%)
3) 2019 – $10.7B (↑ 30%)
4) 2020P – $13.0B (↑ 22%)
5) 2021P – $15.3B (↑ 18%)
6) 2022P – $17.8B (↑ 16%)
7) 2023P – $20.4B (↑ 15%)
8) 2024P – $22.4B (↑ 10%)

More #1: Facebook Warned That It May Lose a Key Seal of Approval for Ad Measurement

More #2: Inside Facebook’s bid to woo TV advertisers

IAB: Digital Ad Spending Rises 16%, But CPMs Fall 16%

Digital ad spend (YoY growth) according to IAB/PwC:
1) 2010 – $26.0B (↑ 15%)
2) 2011 – $31.7B  (↑ 22%)
3) 2012 – $36.6B  (↑ 15%)
4) 2013 – $42.8B  (↑ 17%)
5) 2014 – $49.5B  (↑ 16%)
6) 2015 – $59.6B  (↑ 20%)
7) 2016 – $72.6B  (↑ 22%)
8) 2017 – $88.3B  (↑ 22%)
9) 2018 – $107.5B  (↑ 22%)
10) 2019 – $124.6B  (↑ 16%)

Share of spend by ad format:
1) Search – 44%
2) Display – 31%
3) Video – 17%
4) Other – 8%

Digital video ad spend (YoY growth):
1) 2017 – $11.9B
2) 
2018 – $16.2B (↑ 36%)
3) 2019 – $21.7B (↑ 34%)

Mobile share of digital spend:
1) 2012 – 9%
2) 2013 – 17%
3) 2014 – 25%
4) 2015 – 35%
5) 2016 – 51%
6) 2017 – 57%
7) 2018 – 65%
8) 2019 – 70%

More: Digital Ad Spending Rises, As Digital Ad CPMs Fall Due To Pandemic Fallout

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