The Entertainment Strategy Guide to 24-July20
Netflix Original Film Data, $70 Video Games, Digital Prices for film and More Peacock
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.
In July, I undertook a fairly drastic change to my media habits. I took the advice of the book Digital Minimalism to heart and started a “Digital Declutter”, which means severely limiting all internet/smartphone/social time besides what’s absolutely necessary for work.
While you could think this would hurt a newsletter that relies on finding tons of articles to find the best, it’s been the opposite. I’m reading more offline and finishing more articles by focusing the time I spend online. (I kept reading newsletters as they are a key part of this job. Overall, they tend to find better stuff than Twitter.) I recommend a declutter (and reading for Digital Minimalism) for everyone.
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The Best of the Entertainment Strategy Guy
“The 2019 Star Wars Business Report – Theme Parks” at my website.
How much money did Star Wars make in 2019? It seems like a simple question, but it’s taken me months to answer. Part IV of this five part series tries to evaluate the tricky question of theme parks and assigning value. Check it out to see how well Disney parks did in 2019 and my initial projections on the impact of coronavirus. (Read previous installments on feature films, TV and licensing/merchandise.)
“An Aggressively Moderate Take on Coronavirus and Sports” at my website.
Sports continue their return this month, as the NBA and NHL join European soccer and PGA, which kicked off last month. The economics of sports without live fans are brutal, which I try to explain in this latest installment in “Coronavirus and Entertainment.” (Previous thoughts on the impacts to the larger entertainment industry, theatrical films, linear TV and film/TV production.)
“Visual of the Week: The Performance of Netflix Top Films Over Time” at my website.
A new feature! Every other Monday—opposite of this newsletter—I’m going to release a new “visual” that helps explain the business of entertainment. These are bespoke creations that will run the gamut from maps of the entertainment landscape to graphs showing key trends. Up first is a look at how many subscribers are watching Netflix original films as the ‘Flix grows:
“Most Important Story of the Week: Peacock Symbolizes the Battlegrounds of the Streaming Wars” at my website.
Peacock launching brings the last traditional entertainment conglomerate into the streaming wars. As opposed to looking at its strategy—which I did previously—I explained how everything from flywheels to conglomeration to distribution to churn are epitomized by the Peacock launch. And these are the key battle lines in the streaming wars. Read all about that plus concerns about Apple’s consumer facing businesses, Nielsen measurements, departures at Discovery streaming and more.
“Most Important Story of the Week: The Incredible Shrinking Libraries of Peacock and HBO Max” at my website.
I can’t believe that a scant two weeks after launching across the United States that Peacock is already losing some titles. And HBO Max has already lost some. I explain why the traditional media companies are taking this short term focus, and why they shouldn’t. That plus a college sports rights mergers, AMC winning a court fight, and the latest on theaters.
Twitter Threads
The theme of Twitter for me was Netflix, Netflix, Netflix. Specifically a look at their quarterly earnings report…
…and then my most popular thread of all time, on Netflix’s Feature Film performance.
The Best Content of the Last Two Weeks
(These are the best reads, listens, newsletters, or social conversations I came across last week.)
Long Read of the Week - “Does a film’s box office performance affect its digital purchase price?” By Stephen Follows
Do you follow Stephen Follows for his data insights into film? You should. (Sign up for his newsletter at his website.) He provides the the type of data analysis I wish I could more regularly. In his latest, he connects the price of digital copies to their ratings/box office performance. In particular, higher quality films tend to have higher prices as they age on some platforms. This is additional justification for my model of film financing that uses domestic box office to drive the subsequent windows.
Other Long Read - “‘Hamilton’: A Spike In Disney+ Subscribers Can’t Yet Compare To Global Theatrical Box Office Success” by Scott Mendelson
Mendelson answers a question I’ve been asking (and answering) over the last year, “Should you release your film straight to streaming?” He makes the case that as big as Hamilton is for subscribers, it doesn’t match a big opening weekend. While I might make an exception for Hamilton at this point in Disney+’s lifecycle, his thinking here is absolutely correct. Moreover, he emphasizes that the logic is even greater for the blockbusters on deck like Mulan/Soul/Black Widow and Tenets of the world.
(As a bonus, Mendelson has a corner bemoaning bad reboots of Robin Hood, King Arther and Peter Pan films which I love.)
Other Long Read - “The $70 video game is inevitable” by Charlie Hall in Polygon
This is a great piece of journalism on the actual economics of console video games based on interviews with a few experts. The point I liked best was showing that, while video games feel expensive, if you replay a game a lot it’s actually a good economic deal. (With the caveat that in-app purchases may ruin that.)
(Bonus good read on Amazon and Google’s sub-par video game effort here at Games Industry.)
Other Long Read - Mike Raab on Peacock’s Strategy
Raab looks at Peacock’s strategy here, in particular describing what content will attracts customer versus what keeps them. I agree with his take that Peacock has a strategy that could definitely compete in the streaming era. He also iterates that the streaming wars are a marathon, not a sprint, so great minds think alike!
Non-Entertainment Read - “How to Plan a Space Mission” by David W. Brown in The New Yorker
Part of me enjoyed this article because it describes a group of graduate students pitching a business plan to senior leadership; that’s a situation where I’ve done both the pitching and the being pitched. (Not for rockets, but for business plans.) Mostly it’s the same, just with lots more science for the rocket mission. Overall, it’s a great exploration into how NASA plans its satellite missions.
Newsletter of the Week - “When to Change Your Mind” by Emily Oster
With so much uncertainty in the world over Covid-19, it’s worth reflecting on when and how to change your mind, and Professor Oster delivers another masterful musing on that.
Twitter Threads
Via Penny Fractions newsletter comes this great layout by Cherie Hu for how interweaved all the music companies are.
And TZM_TMT from Twitter had a good thread also reviewing Peacock.
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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.)