The Entertainment Strategy Guide to 01 November 2019
AT&T Thoughts, Theaters and Income, Everyone Winning the Streaming Wars and Perceived Value
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.
Apple TV+ is live and HBO Max has a plan. Sure most of us are confused about the latter—who will get HBO Max for free and who won’t?—but the content lineup is impressive. As for the former, anytime one of the top five most valuable companies in the world enters a new industry, it’s time to pay attention.
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The Best of the Entertainment Strategy Guy
“Guest Column: Theaters, It’s Not Your Fault” at The Ankler (subscription required)
I pack a lot into a small amount of words in this guest column at The Ankler—from median income growth to Good Will Hunting to DVD sales—all to explain why theatrical box office has declined in the US. There’s a bit of a bright spot too: if American income inequality begins to reverse, theaters may be one of the beneficiaries. (Though that’s a big if.) Read it at this must read Hollywood newsletter (again, behind a pay wall) here.
“Most Important Story of the Week: My 6 Strategy Thoughts on AT&T’s HBO Max Rollout” at my website.
I like parts of HBO Max’s new strategy, but I have big of concerns too, which I laid out in six takeaways on their strategy. Meanwhile, a busy week in news meant that Apple TV+, Disney’s marketing blitz, and Sony shuttering Playstation Vue got only quick mentions.
Twitter Threads
First, I had a quick thread on Apple TV+, and how it isn’t “cheap” in terms of content available.
Second, my pithiest remark concerned how broadly targeted HBO Max is and how I felt folks would mostly use this to reinforce preconceived biases:
Other Most Important Stories of the Week
HBO Max and Apple TV+ dueled for the top spot in the week’s most important story. If I had to give an edge, HBO Max just took the top spot. Meanwhile, Benioff & Weiss/Game of Thrones/Star Wars news probably generated the most clicks.
The Business - Benioff & Weiss and Star Wars; HBO Max
Screengrab - Apple TV+ Arrives
TV Top Five - GoT; HBO Max; Cancelling The Lodge
Streaming Wars Newsletter - Apple TV+ launch; HBO Max
TV-Rev - AT&T loses a lot of subscribers ; Walmart selling Vudu?
PARQOR SVOD - Disney reboots?: HBO Max UX/UI; Irishman & Theatrical
Bloomberg’s Hollywood Torrent - HBO Max
The Ankler - AT&T’s HBO Max Rollout; Game of Thrones & Showrunners
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 - “Everyone’s Wrong About the Streaming Wars” by Mike Raab at OneZero
The biggest praise I can offer an article is that it inspired an idea, and this one gave me a few. First, I agree the question isn’t “who will win?” But it should be, “Who creates value and who is capturing it?” And I think a lot more can be written on that. Second, some of the sky-high valuation for Netflix is premised on it “becoming TV”, which this article implicitly argues isn’t in the cards. (And Raab links to one of my favorite articles I’ve written on datecdotes.)
Other Long Read - “Streaming Services And The Theory Of Perceived Value” by Rick Ellis at All Your Screens
Rick’s “Saturday Speculations” are regular reading for me and he’s back with a good one. Especially since he starts with “value”, with the twist that perceived value can vary customer to customer. And he rightly points out that the number of promotions or bundles changes how consumers view the price they’re paying and hence various value of the streaming platforms. All of which leads up to his “bearish” case on HBO Max. (I’m not as negative, but see his point.) He also touches on the “churn” issue that is likely a factor in all streaming services futures.
Other Long Read - “Spotify Saved the Music Industry. Now What?” By Andrew Nusca in Fortune
The sub-headline says it all: profits are hard to come by. Which is partly why I worry that music industry is headed for another correction. As David Turner has written in his Penny Fractions newsletter, Google lost a billion dollars on streaming. Apple and Amazon likely have similar losses and Spotify struggles to make money. So if IFPI—whose data is usually the one you see charting music industry revenue—subtracted those losses from the revenue table, would the music industry still be flat in revenue terms? Meaning, is the current growth unsustainable?
Further, while some issues are much different from video streaming—the marginal costs per play—others have familiar echoes—like tech giants battling one lone upstart striving for global dominance.
Other Long Read - “The Story Behind Banijay’s Patient Pursuit Of Endemol Shine Group” in Deadline by Peter White and Jake Kanter
This is a good read if, like me, as an American you don’t pay enough attention as you should to European companies that produce a lot of content. I’m still not ready to call the deal good or bad, but leaning towards agreeing with the anonymous observer who doesn’t see how this deal ends up paying off in the long run.
Non-Entertainment Read - “Deadspin and The Mavening of Sportswriting” by Bryan Curtis at The Ringer
What happens when a news outlet is purchased and then stripped for parts? Bryan Curtis calls it “The Mavening” in a good read about the impact of PE, acquisitions and the internet on legacy media outlets with good brand names.
Listen of the Week - TV’s Top Five
This week’s TV Top Five gets into the details I wish I could have on Game of Thrones. It inspired a couple of ideas, in particular how tough it can be to run a franchise and whether or not HBO Max/Warner-Media has a plan for that. As a bonus, stay for the good conversation about what Lodge 49 says about AMC’s production model.
Twitter Threads
Two threads today. First, professor Cynthia B. Myers makes the fun point that if Peacock is ad-supported, we’re returning in some ways to the days of broadcast.
Here’s a good take by Twitterzen @Catzmiaou leveraging Parrot Analytic’s data in the pursuit to “save Daredevil”. Beyond that campaign, some fun insights into viewership in the US.
(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.)