The Entertainment Strategy Guide to 10 July 2020
Straight-to-Netflix, more Flywheels, Quibi, Peacock and more...
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 writings.
We’re officially past the halfway point of the year and into July. My plan this month is to catch up on some series I started but never finished. Everything from fantasy series to coronavirus to Star Wars is on the table. As always, if this email was forwarded to you, sign up to receive all future emails.
The Best of the Entertainment Strategy Guy
“Should You Release Your Movie Straight to Netflix? Part II: The Streaming (nee Netflix) Counter-Arguments” at my website.
As business models shift from traditional distribution to digital, the question plaguing everyone from distributors to producers is, “Should I release my movie straight to Netflix?” This series really focuses on how much money streamers can (realistically) make by releasing their movies sans theaters and video-on-demand. In this Q&A, I focus and debunk the biggest reason I’ve seen from streamers, which is that bad box office results doom streaming.
(Part I of this series is here. Catch up July in effect!)
“Is Disney Is Throwing Away Its Money Generating Machine? Thinking Critically About Deficit-Financed Business Units” at my website.
Disney has done incredibly well at streaming, especially with Disney+. The key challenge now is whether or not they can make any money from it. So far not a lot of folks have. I think they can make money, but it amazes me to read folks who argue they shouldn’t even bother. Instead, some analysts think Disney streaming doesn’t need to make money because they’ll make it up with “a flywheel of toys and theme parks”. I demolish this argument in Part II of my series on “Flywheels/Ecosystems”.
(Read Part I of this article here. Read my entire series on an “IPB of the Streaming Wars here”.)
“Most Important Story of the Week: Sports Streaming Price Hikes” at my website.
Everyone is raising prices, from Youtube TV to ESPN+ and the cause is the same: sports rights. I explain why the latest round of price hikes shouldn’t be seen as that surprising, and speculate about what could come next. Read all about that plus WGA skipping a strike, Mad Men going to IMDb TV, free trials ending and more.
“Most Important Story of the Week: Long Reads for the Long Weekend” at my website.
To get ahead, I usually select a few long—and sometimes extremely long—reads for the July 4th (in America) long weekend. Everything from “email” to “Red Dead Redemption 2” to “perceived value” to “Mr. Robot” makes an appearance in this eclectic mix of my favorite stories of the last year (or so). Thanks to all the authors who contributed, cited in this tweet:
The Best of The Rest
(These are the best reads, listens, newsletters, or social conversations I came across last week.)
Before we get started, I need to offer an apology to Evolution Media Capital, who I called the investment bank of WME in the last newsletter. They are the investment bank of CAA. (I highly recommend their weekly newsletter, which is a fairly curated list of links for the week.)
Long Read of the Week - “Inside Peacock’s Ambitious Plan to Crash a Crowded Streaming Field” by Todd Spangler in Variety
Variety provides the de rigueur “here’s the new streamer launching this week” coverage this week. It’s mostly on-the-record comments from the executive team—which I always treat with suspicion—but it’s my long read of the week because I think you can see a distinct business model shining through in Peacock’s rollout. In particular, the free tier, the live channels and immediate distribution via cable providers could be an advantage.
Another positive for this article is that Variety is now including some of the data from their VIP+ platform into their articles. (Read my take on Peacock from their roll-out here.)
Other Read - “Joe Rogan Can't Fix Spotify's Biggest Flaw: Investor expectations are out of kilter with reality.” by Alex Webb at Bloomberg
I downgraded this article from “Long read” to just “read” because you can churn through it pretty quickly. This article matches my perception of Spotify. The recent acquisitions are good for the company—if bad for the podcasting industry—but the explosion in share price way exceeds that potential gain. Especially with big incumbents like Apple, SiriusXM and Amazon ready to pay to compete. (I’ve written about Spotify a few times, but lots of folks liked my most recent take from May.)
Other Very Long Read - “Is Anyone Watching Quibi?” By Benjamin Wallace in NY Mag
I’ll admit this headline is a little misleading. It doesn’t address the core issue of Quibi’s performance, but it is about the longest, most detailed piece you’ll find on this crazy venture. The part that continues to baffle me about Quibi is the insistence on huge, expensive office space by a start up with no track record. Read the whole thing, but warning, it’s long.
(Read my take on Quibi from April here.)
Non-Entertainment Read - “The World If 2020” in the Economist
I grabbed a copy of the Economist from a newsstand this week, and I love stumbling across news stories that algorithms don’t normally show me. Especially global news I’d miss otherwise. This week, the gem is about how the world may look in the future based on the impact of climate change as part of their “World If” series.
Listen of the Week - KCRW The Business on WGA Strike
Kim Masters is my go-to for agency/guild rumblings (along with Richard Rushfield’s newsletter) and her discussion of the potential deal between the WGA and studios/streamers with Matt Belloni is worth a listen.
Newsletter of the Week - Axios Media Trends by Sara Fischer
Fischer crushes it every week, but this week she used Google Trends to put Hamilton in context! That plus a good piece on the PR-company mega-merger makes this well worth a read.
Twitter Threads
I’m browsing Twitter less in July, so this is a bit old of a Tweet, but still good from our often cited friends at Ampere. This time, sports rights.
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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.)