The Entertainment Strategy Guide to 31 March 2020

Netflix Ratings Revealed, Coronavirus Impacts and the Demise of HQ Trivia

Welcome to the Entertainment Strategy Guy Newsletter! My favorite reads, listens, socials and more to keep you informed on the business of entertainment, with the links to my recent writing on my website and elsewhere.

Well, I guess this newsletter is now a monthly. I had planned to send it out weekly or biweekly, whenever I have enough articles stored up…but that last month was crazy.

Since my last newsletter in February, well the world has changed. I was writing about Bob Iger and Apple TV+, and debating whether the Coronavirus sweeping China should make the newsletter. Now, Covid-19 has arrived in America and it’s (almost) all I can write about. While I doubt it will “change everything”—in fact I agree with Kevin Drum that life will some day return to normal—it will still have huge ramifications for entertainment. 

Which was the theme of my articles in March. Plus, Netflix data!

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The Best of the Entertainment Strategy Guy

“Netflix is a Broadcast Channel: Comparing Streamers to TV Channels in an Age of Nielsen Data” at my website.

I’ve been toying with this article since at least the start of the year and was finally able to publish it last week. Using multiple Nielsen data releases, I compared the streamers-to-broadcast channels in terms of nightly viewership. It resulted in this great table:

Read the whole thing to see what sources I used and an explanation of my methodology. Later this month, I’ll write a follow up article drawing out some insights from this table.

“Most Important Story of the Week: Coronavirus and the Entertainment Recession?” at my website.

As the month kicked off, I finally started writing about coronavirus, specifically how this recession could end up being the “entertainment and leisure” recession. Since then, I think small businesses like restaurants will actually take the biggest hit, but entertainment will still get hit from several angles.

“Most Important Story of the Week: Love (Films) in the Time of Coronavirus” at my website.

In my next column, I started digging into each window of the value chain, starting with theaters.  Overall, while the coverage has been generally good, it has been tinged with a level of hysteria and, frankly, over-confidence about what the future could/will bring. My goal is to separate what we know from what we don’t throughout entertainment. With an emphasis on uncertainty.

“Most Important Story of the Week: Coronavirus and Pay/Linear TV…Boom or Bust?” at my website.

Meanwhile, a lot of the narratives around how Coronavirus will change things forever often don’t make sense. Or directly contradict each other. At the same time. Few distribution methods show that better than Pay TV, which is both booming and will be killed by Covid-19. I dig into what we know and what we don’t across supply and demand in my last weekly column. Meanwhile I wonder if a crowded VOD marketplace really makes sense.

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The Best of The Rest

These are the best reads, listens, newsletters, or social conversations I came across last week.

Long Read of the Week - “Inside the Seething Boardroom Drama That Poisoned HQ Trivia” by Kurt Wagner on Bloomberg and “HQ Trivia: Doomed From the Start, Or a Lesson for Others?” By Oriana Schwindt and John Cassillo

Both these articles get at the craziness which is how an explosively growing app like HQ Trivia can rise and fall, in the span of three years. In this case, after the buzz wore off, it was beset by ownership and board room issues. If we take nothing else from HQ Trivia, it’s that we shouldn’t declare anything the “future of TV” until it actually is. If we take something else from it, it’s that leadership genuinely matters for the success of companies.

Meanwhile, I remain convinced that we need a better way to analyze early stage companies that have these huge booms. Some fade out for the most part (HQ Trivia; Pokemon Go), while others last, just smaller (Candy Crush; Fortnite) and others are TBD. (Snapchat?). Meanwhile, others become Facebook. More to come.

Other Long Read - “Don’t Be Fooled By Vanity Metrics” by Erick Schonfeld

I just stumbled on this fairly old article, but it’s a great reminder for data fiends everywhere. Focus only on the numbers that matters. Ignore those that don’t. And yes for most companies you read about in the press, their numbers are the vanity metrics, not the actionable/real ones.

Other Long Read - “Why Netflix Needs To Brand Its Netflix Originals Differently” by Kasey Moore at Whats-On-Netflix

Friend of the website Kasey Moore identifies a key challenge facing Netflix. When they first made a handful of originals, like House of Cards or Orange is the New Black, being an “Original” meant something. Nowadays? They make 1,500 originals! So there is no brand identity. Moore proposes a few good alternatives.

Non-Entertainment Read - “Jack Welch Inflicted Great Damage on Corporate America” by Joe Nocera

This could be the best pound-for-pound takedown of a historic CEO I’ve ever read. It ties back to a point I often make about putting achievements in context. If your goal is to simply increase your firms stock price, okay. But if you do that during a giant bull run in the market, you’re not a genius, you just had good timing. That’s the Jack Welch tenure in a nut shell, followed by a massive collapse right after he left.

Listen of the Week - NPR Planet Money asks “30,000 Economists, 1 Question”

Planet Money attended an economics conference back when conferences still happened, asking economists for their favorite or most important topic in economics. They had a few of my favorites, including opportunity costs, marginal benefits and relative advantage. 

Twitter Threads

In the age before Coronavirus, Andrew Wallenstein made this great point about Apple TV+. 

And this great find about the first “Netflix Datecdote.”

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(If this email was forwarded to you, and you’re wondering who I am, The Entertainment Strategy Guy writes under this pseudonym at his eponymous website. A former exec at a streaming company, he prefers writing to sending emails/attending meetings, so he launched his own website. You can follow him on Twitter or Linked-In for regular thoughts and analysis on the business, strategy and economics of the media and entertainment industry.)

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