The Entertainment Strategy Guide to 15-May-20
Comcast, More Netflix insights, Profitable Blockbusters and a Podcast Anniversary
Welcome to the Entertainment Strategy Guy 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.
It might just be my desperate hope for good news, but the last week showed some glimmers of life after coronavirus. A Disney theme park opened and theaters seems more and more likely to open somewhat in July. Meanwhile, networks are planning for the fall and sports leagues are planning their returns. Will the near term look anything like “normal”? Of course not, but businesses can’t press pause forever.
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The Best of the Entertainment Strategy Guy
Sometimes it takes the right prompt to help solve a problem. In my case, I couldn’t figure out Comcast. Then Decider asked if I could explain Comcast’s Vudu acquisition. As I tried to figure it out, I realized that serial acquirer Comcast had bigger plans than I had expected. Read the full story over at Decider to see why Comcast is buying so many companies.
“Netflix is a Broadcast Channel – Implications, Insights, Strategic Impacts and Criticisms” at my website.
Data and insights go together like milk and cookies. Or peanut butter and jelly. Or cheddar cheese and tortillas/chips. My big analysis article last week is the counterpart to my very popular (for my site) article comparing Netflix to broadcast channels. In it I dig into what the per show ratings mean, what it means for competitors and even bring my methodology under some criticism.
“Most Important Story of the Week: Does It Matter That Hulu is Delaying International?” at my website.
My latest column explores a part of Disney’s last earnings call that didn’t get nearly enough attention: to protect their cash flow, Disney is delaying investment in Hulu’s international growth. While I thought I’d be more negative, I realized I’m more skeptical on Hulu internationally than I realized. Meaning this delay isn’t quite the end of the world. That plus thoughts on Fortnite’s latest user count, Netflix dubbing challenges, and some coronavirus updates.
Twitter Threads
I’d sat on this idea for weeks. And it turns out folks were into it. Here’s lots of tweets on why launching a movie studio is tough stuff. Even with lots of money.
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 - “Box Office: Hollywood’s Most Profitable Blockbuster Franchise Is Not ‘Star Wars’ Or ‘Avengers’” by Scott Mendelson
Mendelson provides the type of deep data dive we all need right now. Now more than ever. Seriously, I’d always operated on the assumption that superheroes had the highest box office totals, but horror has the best profit margins, and Mendelson backs that up. He focuses just on box office-to-production budget ratios, but I think you could safely extrapolate this methodology to raw profitability since total revenues are highly correlated with initial box office. Same for marketing budgets. Even things like theme parks and merchandise don’t impact as much as you’d think they would. (Or their owed as much to the franchise as to an individual film.)
For some visualizations on the economics of blockbusters, here’s my take from 2018.
Read of the Week - “Why 'Tenet' and 'Mulan' Can Succeed Even if Theaters Dramatically Slash Seating” by Pamela McClintock in THR
The “death of theaters” narrative is partly fueled by a misunderstanding of how theater chain economics work. This article provides a good antidote to it. Though you could argue that it provides a “death of mid-budget films” argument.
For my moderate take on theaters, here’s my column from a couple of months back.
Non-Entertainment Read - “Experts’ 7 best ideas on how to beat Covid-19 and save the economy” by Matt Yglesias in Vox.
This is one of the clearest run downs of how we can safely respond to Covid-19 in the long run. It actually matches most of my policy recommendations and frustrations. I try to avoid politics that aren’t directly related to entertainment, but when it comes to coronavirus it will impact everything, and especially entertainment.
Listen of the Week - NPR Planet Money Reaches 1,000 Episodes
Congratulations on 1,000 episodes! This is a great retrospective on the tremendous work they’ve done since the financial crisis. As an early podcast adopter, I’ve been listening to them almost since launch. (I know I just recommended them two newsletters ago, but I didn’t realize they had this anniversary coming up.)
Newsletter of the Week - All Your Screens’ “Too Much TV” Newsletter
Rick Ellis publishes a great newsletter called “Too Much TV” and I’ve found myself citing it a bunch recently. Here’s a recommendation to use broken pilots during summer down season. Here’s a great point about CBS All-Access and CBS integration. Here’s a look at Fox’s fall schedule. In short I’ve found him a great reference for my column each week.
Twitter Threads
First, Richard Broughton highlights a colleagues great data on OTT:
Second, Brandon Brady has some reasonable advice on customer experience. for HBO Max
Third, I respect whenever anyone calls their shot, as Kirby Grines does here.
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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.)