The Entertainment Strategy Guide to 4-Oct-2019

Sports Media Rights Predictions, How Netflix Calculates Subscribers and Disney Life

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

I’m still getting the hang of putting this out early on Monday morning as promised. I’m working on it. In the meantime, I should have some data-intensive articles for other outlets this week. And subscribers to this newsletter may get a treat.

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The Best of the Entertainment Strategy Guy

“Why Most Netflix Charts Start in 2012: A History of Netflix Subscribers” at my website.

As part of my series on the Bass Diffusion Model, I looked into Netflix’s subscribers over time. While this seems simple—Google Netflix subscribers and download what you find—to do it right meant combing through every Netflix annual report going back to 1999. It turns out finding “streaming subscribers” isn’t a simple task, and that’s why most Netflix charts start in 2012. That and an ode to government regulation creating value for finance and the difference between gross and net ads in my latest.

“What Will The Next Round of Sports Media Rights Deals Look Like?” at Athletic Director U.

Consider this article “Part III” of my series on the Pac-12’s decision to not launch with a strategic partner. However, it stands on its own as it answers what I consider one of the more fascinating questions of the streaming wars: what will sports media rights look like in 2020 and beyond? I’d seen estimates before, but I wanted to collect the data myself and I’m both more bullish and bearish now.

And here’s a fun bonus! For the first time, I’m making my Excel database available for download on my website. I already have a few ideas for how to analyze the data set further and apply it to the Pac-12 specifically.

“Most Important Story of the Week – 4 October 19: Broadcast (and Streaming) Frightening Fall Numbers” at my website.

In honor of Halloween season, I look at the frightening state of broadcast television. But not just broadcast, but how the streamers faired in the series they launched. (Mainly The Politician on Netflix.) In short, can everyone lose the streaming wars simultaneously? Those stories plus how content quotas hurt global buyers, M&A hits a 3 year low, and some not ridiculous esports data.

Twitter Threads

I’ve been a bit light on Twitter threads with a few very data intensive articles taking my time, but here were my two pithiest comments of the last week:

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 - “Disney’s Next Big Remake: Itself” by Erich Schwartzel in The Wall Street Journal

I don’t read as much of the WSJ as I’d like because I currently pay for another business subscription. (I’m limited in my media budget as a freelance/indie writer.) However, a few folks have told me to look up more about “Disney Life”, which was Disney’s first foray into subscription video. Essentially it acted as the test lab for Disney about their content, and it’s probably one of the reasons the price is going to be $7 in the US. This Wall Street Journal story by Schwartzel tells that story about midway through and it made me a bit more bullish on Disney’s digital effort.

Other Long Read - “Box Office: The Ridiculously Early 2020 Summer Movie Preview” by Scott Mendelson in Forbes

Mendelson is my go to for box office coverage. A lot of folks do it, some do it really well, but his larger looks at box office performance cut through the noise for the signal best, in my opinion. So get ready for next summer with his too early deep dive. Overall, Disney’s dominance isn’t quite as guaranteed as years passed. Plus, he ends with a good Independence Day reference.

Non-Entertainment Read - “The Ash era is over, but Rutgers’ pain is not, sports business professor says” by Karen Weaver in NJ.com

Given that I’ve been writing about college athletics for a website, clearly it’s a subject I’m fascinated by. In particular, the gap between the haves and the have nots, along with who actually makes money in this ecosystem. As well as some conferences are doing with huge media rights deals (see my article above), that doesn’t necessarily make it down to the colleges themselves. Dr. Weaver—who is a good follow on Twitter too if you like college sports—looked at the finances of Rutgers athletics since they joined the Big10 in this excellent op-ed.

Listen of the Week - Switched On Pop goes “Switched Off Book” 

Switched on Pop normally explains how pop music works—I’m still hoping they do Disney songs in an episode—but in this one they team up with the Off Book podcast to create an improv musical that explains how musicals work. I don’t really love musicals as a rule, but this is an impressive episode of podcasting that is both entertaining and will teach you some things.

(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.)

The Entertainment Strategy Guide to 27-Sep-2019

Netflix Subscribers, Food Network Kitchen Skepticism, Pricing Wars and Long Term Contracts

Welcome to the Entertainment Strategy Guy Newsletter! The best source for all my writings of the last week, along with the best reads, listens, socials and more to keep you informed on the business of entertainment.

I spend last week on two relatively data intensive articles, one for my site and one which just went up. Meanwhile, there wasn’t one entertainment news story that took over the airways, but a few different stories competing for our attention.

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The Best of the Entertainment Strategy Guy

“Why I Think Netflix Will End Up with 70 Million US Subscribers: Applying Bass Diffusion To The Streaming Wars” at my website.

Consider this another entry into the “What is the Future of Netflix?” cottage industry. My specific process was about fitting the Bass Diffusion Model to a company that really stands in for all of entertainment. In general, my model aligns with some others you’ll find, including this one published recent at The Hollywood Reporter.

“Most Important Story of the Week: Discovery Enters The Niche Streaming Business” at my website.

I think broad streamers (like Netflix, Amazon, Disney and HBO Max) will struggle in the coming streaming wars, and “niche” streamers may have it even tougher. I lay out that case plus some other strategic concerns for “Food Network Kitchen” along with thoughts on Spider-Man/Kevin Feige, WME cancelling their IPO, Apple going theatrical and more. Plus, this back-of-the-envelope table:

Twitter Threads

Here are my two most popular Twitter thoughts of the week. One on Disney; one on WeWork. One makes a serious point about user experience; one is a flippant observation about the proliferation of money-losing streaming services.

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 - “After 'Friends,' 'Seinfeld' and 'Big Bang,' How Sky-High Can Massive TV Deals Fly?” by Lesley Goldberg in THR

Goldberg breaks tons of stories, but I loved this article because this question gets at exactly how fierce the streaming wars will get. If you have articles about price wars on the horizon (see Variety here) and now articles about how content costs are exploding…well streaming video’s margins will be caught in the middle. (And right now those margin’s don’t actually exist.)

Other Long Read - “Why I Think Apple TV+ Will Fail” from TV Answerman

Phillip Swann, a long time TV journalist, makes the case that Apple TV+ will be light on content and will struggle despite its deep pockets. Of particular interest to me is his case that when it comes to the TV experience Apple really hasn’t innovated that much. 

Listen of the Week -  “The Inherent Failures of Long-Term Contracts—and How to Fix Them” by HBR

The entertainment and media industries are filled with long-term contracts. And a lot of them are, frankly, awful. They aren’t good partnerships. This podcast is about how to do them better.

Newsletter of the Week - Axios Edge by Felix Salmon

This newsletter had a couple of good pieces—including how to price traffic congestion in New York, but really I loved how he tied together “trust” issues in the economy. Fav quote was this:

Twitter Thread of the Week

My favorite thread of the week belonged to Josef Adalian (@TVMoJoe) and this nuanced take on broadcast ratings.

As always, if you enjoyed the newsletter, feel free to forward to anyone—ANYONE!!!—who you think would enjoy the links and my writing on entertainment.

(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.)

The Entertainment Strategy Guide to 20-Sep-2019

Hamburgers, WGA Fight, Malcolm Gladwell and Subscription Newsletters

Welcome to the Entertainment Strategy Guy Newsletter! The best reads, listens, socials and more to keep you informed on the business of entertainment, with the links to my recent writing across platforms.

Last week was light on total articles from me, but high on quality, if I can judge my own work. I’ll be back on full-time this week after some family distractions (Disneyland!) last week.

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The Best of the Entertainment Strategy Guy

“Netflix Is Five Guys and Hulu Is McDonald’s: How Hamburgers Can Help Explain The Streaming Wars” at Decider.

My latest article starts with a fun anecdote about foie gras burgers, but makes a serious point about how prices impact customer perceptions. In the streaming wars, every company is making tradeoffs in streaming, whether they realize it or not. Plus lots of tables and charts, including my new favorite:

“Most Important Story of the Week: The WGA Keeps Their Power” at my website.

I debated whether the WGA would make the top slot, or whether the AT&T series of news events (activist investors, DirecTV sale?, impending departures, lawsuit over DirecTV Now subscribers) would dethrone it. Ultimately, I went with the WGA because of how much the election results strengthen the Guild’s position. And that meant that “Peacock” and BET streaming only got quick shout outs. 

The Best of The Rest

Long Read of the Week - “A Fight in Hollywood (and Why It Matters for Everyone)”

I don’t plan to usually do this, but I found three articles/listens really informative on the WGA/Agency fight that I linked to in my column, and I’m reemphasizing them here.

Alessandro Camon’s article links the WGA-Agency fight to larger trends in the economy—including inequality—and trends in Hollywood—like the move to IP-driven properties. It’s also just a good perspective on the WGA and why they’re committed to this fight.

Listen of the Week - KCRW The Business “The Battle for the WGA”

The best part of this episode of The Business is that the WGA challenger slate didn’t even send someone to defend their position on what I have to assume is one of the most popular podcasts for people in the industry. Still, a good listen to hear the WGA’s perspective on the negotiations and power.

Other Long Read - “Why the WGA-Agents Battle Has Yet to Significantly Impact TV Dealmaking” by Michael Schneider in Variety

Michael Schneider checks in on how the fight has impacted actual dealmaking, which is to say not much. Yet. (I’ve been holding onto this read until I did my WGA check-in.)

Other Long Read - “This TV Network Built a Massive $50 Million Studio Mostly to Take on Netflix” in Ad Week by Chris Ariens

One fact of the streaming war is that it is a world war, with battlefields from America to Japan to Brazil. Which is what this article is about, particularly the huge battleground of Latin America and the mostly unknown (for US readers) Globo. As I wrote a few weeks back, while Netflix, Amazon and the new entrants will have global scale as an upside, part of the downside will be a lack of focus territory by territory. Also, hat tip to the PARQOR newsletter for spotting this read. (And shouting me out in the last few issues!)

Non-Entertainment Read - “Malcolm Gladwell Reaches His Tipping Point” in the Atlantic by Andrew Ferguson

If nothing else, Ferguson shows how a statistic can be created, repeated and then popularized even though it doesn’t hold up to scrutiny. Moreover, if you love data, this is a case study in why you should read the footnotes to see if the data/statistic holds up to scrutiny.

Newsletter of the Week - Cybercultural “Exclusive data: email newsletters & monetization” by Richard MacManus

In his last article in a series on newsletters and blog, Richard MacManus explores whether folks will pay for newsletters using original survey data. I’m probably a bit more interested in this than most—I just launched a newsletter and last year launched a website that I’m trying to monetize—but his whole series on the role of blogs/Tumbler/newsletters in the era of social media is worth a browse.

Newsletter of the Week - “Big Tech Meets Its Pecora Commission: Why Google's Toughest Opponent Is Now Congress” by Matt Stoller

If nothing else, investors should scroll down to the lines of business list that the House of Representatives subpoenaed from Google. I’ve long believed that the Googles and Amazons of the world should have to break out financial information for way more lines of business. In Google’s case, this is Youtube and Android and Waze and maybe more. Also a good read for how the antitrust case against big tech will proceed.

Twitter Threads - Clair Atkinson asks about churn

Atkinson asks about some of the numbers that I care about most in streaming, and she got a who’s who to chime in on Twitter. After monthly active users—the number I care most about—subscriber churn probably best correlates with how subscription streaming services are actually doing, as opposed to randomly selected data points. This article by David Pakman from the replies is a good read on churn too, with the caveat that until we get self-reported churn numbers, we should take any churn estimates with a grain of salt (or assume a healthy margin of error).

(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.)

The Entertainment Strategy Guide to 13-Sep-2019

Peak Fortnite, Apple TV+ Prices, Fake Instagram Followers and Bass Diffusion

Welcome to the Entertainment Strategy Guy Newsletter! The best source for all my writings of the last week, along with the best reads, listens, socials and more to keep you informed on the business of entertainment.

I spend the weekend at Kaaboo Music Festival in Del Mar, so I’m a little late today, but the festival inspired some thoughts for future articles on the business of live entertainment. Plus Dave Matthews Band, Little Steven and the Disciples of Soul, the Revivalists, and Mix Master Mike were incredible. 

(If this email was forwarded to you, sign up to receive all future emails or follow me on Twitter, Linked-In or at my website.)

The Best of the Entertainment Strategy Guy

“The Bass Diffusion Model…Explained! The Most Important Shape of the Streaming Wars” at my website.

Companies launching new products often experience periods of double digit percentage growth. While we usually see this covered in the press with excitement, it’s fairly common, especially for innovative products. This phenomenon is so ordinary, it has a mathematical model for it, which I explain in this article.

“Have We Passed Peak Fortnite?” At Linked-In

To show that the Bass Diffusion model isn’t just an academic concept, I apply it to a current business. In my latest at Linked-In, I show how Fortnite’s adoption perfect matches a Bass Diffusion curve. Most importantly, Fortnite will likely top out at around 300 million total users.

“Most Important Story of the Week: Debunking Some Apple Myths” at my website.

The news of the week was Apple TV+ announcing a launch date (November 1st) and price point ($4.99). From this, I saw a few numbers and explanations floated that just don’t hold to scrutiny, which I debunk in my weekly column. That plus Amazon leaving theaters, Miramax’s potential sale to SuperCBS, Netflix drops in bandwidth rankings and a few EntStratGuy updates.

“Introducing the Entertainment Strategy Guy Newsletter” at my website.

If you’re reading this, you know I have a newsletter. But why do you need another one? I explained my rationale for launching here.

My Twitter Threads of the Week

- A thread on how to react to early NFL ratings

- Apple TV+ price per episode comparison

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 - “Fighting Instagram's $1.3 Billion Problem—Fake Followers”

I’m fairly obsessed with fake followers and viewers on social media platforms, especially Twitch. So read Wired’s latest entry by Emily Grey Ellis another entry in a much too common problem that has ramifications for every part of the value chain. Hat tip to the Deal Book newsletter for pointing me to it.

Other Long Read - “Apple’s Arcade Seeks to Upend Another Business Model” at Bloomberg

Shira Ovide describes the pros and cons of Apple Arcade fairly succinctly in her latest column. It was a refreshing take on the other new subscription Apple is launching. I especially like the point about Apple News…we haven’t heard much from that recently have we? My tentative thought is that Apple Arcade solves a legitimate problem for a target segment; Apple TV+ does not.

Other Long Read - “How Film Producers Became the New Expendables” in THR

As long as writers and below-the-line talent is getting squeezed, we may as well add non-creative producers to the mix. 

Listen of the Week - The Indicator on “The Economics of Music Festivals” and Planet Money on “How to Make it in Music”

Since I spent the weekend rocking, it makes sense to share two recent podcasts from the NPR Planet Money team on music and festivals. Take a listen to both, but I’ll mention that both feature the most important shape in entertainment, logarithmic distribution.

Newsletter of the Week - “Our Brains Are Not Multi-Threaded”

Cal Newport has influenced my thinking more than any other author in the last five years. His Deep Work is a must read, and this blog post debunks a common myth that humans can multi-task.

Twitter Thread of the Week

I love a good debunking of media narratives with actual data, which TV Grim Reaper does on TV viewing habits in this thread.

(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, I prefer writing articles to sending emails/attending meetings, so I launched my own website.)

The Entertainment Strategy Guide to 9-Sep-2019

Content is King, Quibi, and Product Placement

Welcome to the Entertainment Strategy Guy Newsletter! The best source for all my writings of the last week, along with the best reads, listens, socials and more to keep you informed on the business of entertainment.

(If this email was forwarded to you, sign up to receive all future emails or follow me on TwitterLinked-In or at my website.)

The Best of the Entertainment Strategy Guy

“If Content is King, Who Is Everyone Else” at my website. 

If the entertainment industry were a chess board, who would everyone be? Turns out that content may not be king after all.

“Most Important Story of the Week: Quibi, Quibi, Quibi” at my website. 

People seem to love Quibi—at least, it’s pretty well-hyped—but some recent departures should worry us about Quibi’s biggest strength. That plus a Disney Vault update, Apollo buying broadcast, and a look to fall in my latest weekly column. 

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 - “The TV Subscriptions You’ll Need” Over at Medium

Mike Raab takes a look at how different library TV series will change homes during the streaming wars, using three different metrics. This is a bigger look at the TV landscape, but reinforces my worries on Disney+’s TV catalogue.

Other Long Read - “How/Why I cut the Cable” by Tim Goodman at The Hollywood Reporter 

Pair this article with Josh Barro’s article from a few months back, and you start to see how/why cord cutting may accelerate in the years to come from fad to trend.

Other Long Read - “Why Spotify and Netflix Need to Worry About A Global Recession” on Music Industry Blog

This makes the best case I’ve read that the current benefits of Netflix and Spotify’s easy-to-cancel approach to subscriptions could become a liability in a recession. I’ve read the bullish cases for Netflix and recession, but I’ll emphasize that predicting consumer behavior in a recession is frankly tough and this provides a good counter.

Non-Entertainment Read - “Welcome to San Diego, Don’t Mind The Scooters” at The New York Times

It’s time for a good check-in with scooters and the future isn’t as bright as mid-2018.

Listen of the Week -  Screengrab by KCRW “Summer in Review”

The biggest show of the summer was on a network most people can’t describe and a show almost no critics were talking about. Listen to two of TV reporting’s best explain.

Newsletter of the Week - Digiday Video Briefing “Producers at streaming shows are looking for product placement deals”

Advertisers need to find a way to reach consumers, and product placement is providing that avenue. On streaming, producers have an easier time too, since they don’t have to deal with networks sales teams fighting for ad dollars too.

Updates

Hope you enjoy the first newsletter and will help spread the word. If you have any feedback, shooting me an email is the best way to stay in touch. The email is info plus the website name.

Coming up this week, I’m working on a new shape that will explain the streaming wars to come plus a few articles at other outlets, timing TBD.

(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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