Posts for 'Amazon'

Last week’s Q2 earnings reports provided another valuable window into how Amazon, Comcast, Google and Facebook have all hit on winning formulas in video (at least for now), while Apple continues to spin its wheels, under-optimizing its ability to capitalize on the massive shifts underway in video and TV.

To briefly review, Comcast lost just 4K subscribers in Q2, vs. a loss of 162K three years ago, as its sleek X1 set-top box gains further traction and satellite and telco competitors stumble. Facebook reported a blow-out quarter, with earnings of $2 billion, double what they were just 6 months ago. Facebook has become a mobile powerhouse and is now laser-focused on video, as Facebook Live becomes widely adopted (though still under-monetized).

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Netflix reported disappointing domestic and international results for Q2 ’16, extending the company’s bumpy and unpredictable growth. Netflix added just 160K subscribers domestically (down from 900K in Q2 ’15, a quarter which now looks like it was an anomaly after all) and below its own 500K forecast. Meanwhile international subscribers increased by 1.52 million (vs. 2.37 million in Q2 ’15) and below the company’s forecast of 2 million additions.

In both cases, Netflix blamed price increases that were felt as “un-grandfathering” of older subscribers kicked in, which in turn led to higher churn. In the U.S. Netflix went one step further, blaming press coverage of the un-grandfathering process, which it believes led some subscribers to believe a new price increase was coming.

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I'm pleased to present the 330th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Colin and I were both very enthusiastic about news earlier this week that Comcast will integrate Netflix into its X1 set-top box, a move we’ve been advocating for a while. In this week’s podcast we discuss how complicated this negotiation must have been, and why joint subscribers will be the big winners.

Surely a motivating factor for Comcast was the acknowledgment that viewers are spending more time on SVOD, which new research from IBM Cloud Video highlighted this week.

More specifically, the research showed how important video has become for Amazon Prime members, with 75% of them now watching. By not charging for video in Prime, Amazon is potentially a big disruptor in the video/TV industry down the road.

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Three-quarters of Amazon Prime members are watching the service’s video offerings, according to new survey data released by IBM Cloud Video. 61% of Prime members surveyed said they signed up for the service for the shopping benefits, but also watch the video, while another 14% said they signed up specifically for the video. Just 7% of members surveyed said they didn’t know about the video offerings, with another 18% saying they were aware, but didn’t watch.

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I'm pleased to present the 324th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Earlier this week provided a synopsis of a fascinating article in Vulture describing the massive changes that big SVOD providers have brought to the TV production business. The most startling statistic is that the number of scripted TV shows has soared from 36 in 2005 to over 400 in 2015.

In today’s podcast we discuss the consequences of this explosion and speculate on whether all of this is sustainable, or whether a bubble has been created, and if so, what might cause it to burst. Colin is more optimistic that current production volumes can continue, while I’m more skeptical simply because SVOD business models are still in flux.

Another dimension to the value of more TV shows is how important both stacking rights for current seasons and access to back catalogs are becoming for the existing ecosystem. With VOD, binge-viewing and time-shifting all on the rise, there appears to be an emerging consensus on broader availability of TV shows. We explore all of this as well.

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Yesterday research firm Strategy Analytics released a forecast showing growth in domestic SVOD spending will slow slightly in 2016 vs. 2015 and then drop by almost 50% in 2021, to just 8% year-over-year. The 2016 slowdown is nominal - a $1.19 billion increase vs. a $1.21 billion increase in 2015, which could be easily tweaked by minor changes to churn rates, as just one example. Domestic SVOD spending in 2016 will be $6.62 billion, still an increase of 22% year-over-year, a growth rather most industries would happily take.

The key takeaway shouldn’t be the current year forecast, but rather what’s expected over the next 5 years, to 2021. Strategy Analytics Digital Media Director Michael Goodman said that the spending forecast was modeled assuming an 85% saturation rate of broadband households in 2021, comparable to pay-TV’s current adoption (60% of households currently subscribe to one or more SVOD services), with Netflix alone accounting for 53% of subscriptions.

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For those interested in a deep-dive look inside how dramatically the business of making TV shows has changed over the past several years, last week’s Vulture cover story, “The Business of Too Much TV,” is essential reading. At 10,000+ words, you’ll need to set aside a chunk of time to get through it, but it’s well worth it for a peek behind the curtain of how SVOD has influenced every aspect of TV production.

The biggest driver of change has been the massive increase in the number of scripted TV shows being made - from 36 in 2005 to over 400 in 2015. Cable TV networks were the initial cause of this explosion, but in the past several years it’s been the major SVOD services, Netflix, Amazon and Hulu, which have each turned to originals as a source of differentiation as competition has intensified.

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When Amazon Video Direct (AVD) was announced last week, lots of industry observers saw it as a new YouTube competitor. At some point that may be true, but for now, there is little for YouTube, the undisputed 800-pound gorilla of the online video industry, to be worried about.

While video content providers will welcome another deep-pocketed third-party distributor into the market, the most important challenge AVD faces is proving that it can make incremental money for these providers, beyond what they can already earn on YouTube, their own direct channels/apps and elsewhere.

Amazon revealed 4 different ways that content providers can monetize their videos, but each has challenges.

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I'm pleased to present the 322nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week’s announcement by Amazon of “Amazon Video Direct” - seemingly a YouTube competitor and not an obvious extension for the company - prompted Colin and me to reflect on how many recent video industry initiatives have struck us as incongruous. There’s no doubt we’re living through an unprecedented period of instability in the video and TV industries, and a persistent question is how to parse smart experimentation/expansion from wild pitches?

In today’s podcast we discuss 7 different industry moves we’ve recently observed that seem to us like long shots that are disconnected from their companies’ core competencies vs. those that seem like natural extensions of their companies’ brand perceptions and capabilities. (Our biggest head-scratcher is Dish Network’s decision to expand into in-home iPhone repairs. Huh?).

Still, Colin and I readily acknowledge this is not hard science. To that end, we also identify a few examples that at one time may have seemed like odd pursuits, but have turned into big successes  (Snapchat’s move into professional video, with its Discover feature, is a prime example). It’s all great food for thought as we continue to assess the dynamic video landscape each day.

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I'm pleased to present the 319th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Colin and I are back from NABShow where I produced the 2-day Online Video Conference, which included 52 speakers over 15 sessions. One of the highlights for me was doing a keynote interview with Michael Paull, VP of Digital Video at Amazon who oversees the company’s new Streaming Partners Program (SPP).  

As I wrote yesterday, SPP will likely have a majority of U.S. SVOD services included this year, putting Amazon in the undisputed role as THE third-party distributor of SVOD in the U.S. Colin and I dig into why that is potentially so critical and the implications it could have for Netflix and the pay-TV industry. (Colin provides a personal example of how Amazon hooked him on a subscription to Tribeca Shortlist which he never would have found on his own).

We then transition to specific takeaways from NABShow. Colin notes that many vendors were demonstrating how online video can be delivered with guaranteed quality and user experiences, making online video every bit as good as TV itself. For pay-TV operators specifically, the imperative to move video services online has never been higher.

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Amazon is likely to have a majority of all SVOD services available in the U.S. included in its recently launched Streaming Partners Program (SPP) this year, setting the stage for the company to become the main third-party distributor for dozens of SVOD services. As this happens, there will be significant implications for the structure of the SVOD industry, not least of which will be changing the competitive dynamic between Amazon and Netflix, just as the latter’s domestic subscriber growth appears to be flattening. Another important implication would be Amazon’s impact on the U.S. pay-TV industry and role with cord-cutters.

Michael Paull, Amazon’s VP of Digital Video, who runs the SPP, told me during our keynote interview on Tuesday at the NABShow Online Video Conference that he expects “dozens” of SVOD services in the U.S. will become part of the SPP in the coming months. When added to the 30+ SVOD services already available in SPP, the result would be that the majority of U.S. SVOD services would be part of SPP. (Note, according to Parks Associates’ recent research there are 98 U.S. SVOD services aside from Netflix, Hulu and Amazon currently available).

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Amazon has launched an $8.99/month standalone plan for its Prime Video service, breaking it out of the overall Prime service for the first time. The company is also offering a $10.99/month option for Prime itself, a first time departure from the traditional annual approach.

The standalone plan for Prime Video means that for the first time Amazon’s video service can be valued by consumers on an apples-to-apples basis with other SVOD services without being clouded by other Prime benefits. By bundling video with Prime Amazon was able to introduce video to millions of Prime subscribers without them having to make an incremental purchase decision, enabling buzz to build about Prime’s original programming.

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Here’s a measure of how dominant the big three SVOD services (Netflix, Amazon and Hulu) are in the US: according to new OTT data from Parks Associates, just 5% of all broadband homes subscribe to one or more of the 98 SVOD services available in the US aside from the big three. Among the 98 services Parks counted are high-profile offerings like HBO Now, CBS All Access and Sling TV.

At the end of 2015, there were approximately 96.3 million broadband homes in the US, according to Leichtman Research. So that would mean that about 4.8 million broadband homes were subscribing to one or more of the 98 SVOD services outside of the big three. Parks did not specify the actual subscriber levels of any of the 98 SVOD services.

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Underscoring once again how unpredictable the online video space is, Twitter has emerged as the unlikely winner of the rights to stream NFL Thursday Night Football (TNF) games for the 2016-2017 season. Just yesterday I wrote that with Facebook and Apple bowing out, the bidding likely came down to Amazon, Verizon and Google, with Verizon the most likely winner for a variety of reasons.

On the one hand, Twitter’s interest in streaming the TNF games makes sense, as recently returned CEO Jack Dorsey has publicly stated that a top 2016 priority is live streaming, including leveraging its Periscope product. The 10 TNF games give Twitter a marquee property to highlight live streaming, which complements Twitter activity around all games. And Twitter already had a deal in place with the NFL for highlight clips.

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Late Friday afternoon, Bloomberg reported that Facebook had dropped out of the bidding for streaming rights to the NFL’s Thursday night package. That news followed Recode’s report from last month that Apple had also withdrawn. With two of the most likely candidates now gone, the only digital players remaining who are both big enough to afford the deal and for whom it potentially makes enough strategic sense are likely Verizon, Google and Amazon (I’m excluding Yahoo since its own instability almost certainly precludes a bid).

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New research from Pivotal Research Group, based on Nielsen data, reveals that at the end of February, 2016, SVOD services were in over 50% of U.S. TV households, up from 43% in February 2015. The SVOD services included are Netflix, Amazon Prime and Hulu.

No surprise, Netflix is by far the most popular SVOD service, in 45% of U.S. homes (up from 38% a year ago), followed by Amazon Prime in 21% of homes (up from 15% a year ago) and then Hulu in 10% of homes (up from 7% a year ago).

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I'm pleased to present the 308th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

In today’s podcast we discuss a number of different items that hit our radar this week. We start with Facebook’s growing impact in video, which was detailed on the company’s earning call earlier this week.

We then transition recent research from Nielsen which Colin analyzed, showing the level of viewership by device.

Next up, Colin and I were watching reports from the Sundance Film Festival noting the aggressive bidding by Amazon and Netflix, underscoring another industry segment being disrupted by SVOD. Last, we touch on the problems Netflix is already running into with its international expansion. Indonesia was the latest country to raise red flags on Netflix’s content this week.
 
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I'm pleased to present the 303rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

In this week’s podcast Colin and I discuss our top 10 online video stories of 2015. A lot happened this year and it’s been tons of fun to cover and try to make sense of it. If you disagree with any of our choices, then as always, we welcome your feedback.

We’re going to try to slip in one year-end podcast next week, but in case you’re heading out early for the holidays, Colin and I would like to thank all of our listeners for tuning into our podcast this year, and wish all of you happy holidays!

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Amazon announced this morning that it has added content from NBC, NBC Sports, Watch HGTV, Watch Food Network, Watch Travel Channel, Fox Now, NPR One, GoPro and others to Fire TV. Amazon said there are now over 4,000 channels, apps and games available in Fire TV, which it believes is the largest of any connected TV device. Amazon also said Amazon is the top-selling connected TV device “across all retailers” from July-October, though it’s not clear what retailers are included.

All of this additional content strengthens Fire TV, especially in the all-important holiday season. Conversely, I’ve been spending a lot of time with my Fire TV over the past week, and I’ve been surprised, and quite disappointed, with Fire TV’s implementation (or lack thereof) of the 20 content partners Amazon announced on Dec. 8th as part of its new “Streaming Partners Program” (SPP).

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I'm pleased to present the 302nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Earlier this week I wrote bullishly about Amazon’s new “Streaming Partners Program,” (SPP), which could disrupt the SVOD industry. I emphasized the word “could” because, as with everything in life, execution is everything.

In that post, I noted that SPP on Amazon’s web site was already implemented well, but that the iPhone app experience didn’t work. In today’s podcast, Colin shares his experiences on both Android and Fire TV, which are shockingly incomplete.

It’s very surprising to see Amazon, which is typically an execution machine, come up so short here, and it suggests they rushed SPP to market before being 100% ready.

Implementation issues aside, we discuss the overall merits of SPP and Colin’s view that Netflix is actually better positioned for an SPP-like role in SVOD. I still like Amazon’s SPP strategy a lot and will keep an eye on how things unfold.

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