The Entertainment Strategy Guide to 7-August-2020
Who Won July?, More Netflix Viewing Data, HBO Subscribers 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 links to my recent writings.
The most recent “earnings season” provided a lots of new data to unpack, from Netflix’s original content to Disney+’s subscriber growth. If anything the streaming wars are getting more exciting and competitive, not less. That provides a lot of material for strategists—like me!—to devour. Let’s get to it.
(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
“AMC Theaters and Comcast Declared a Truce: What does it Mean and What Comes Next?” at Decider
This news is a big deal—it just missed being story of the week—and I wrote up a full article over at Decider. A lot of the media coverage mis-frames the issue: this isn’t about shortening the window, but creating a new one. That change in perspective allowed the two sides to compromise in this negotiation. In addition to explain why each side agreed to this deal, I also answer some key questions like, “What will other studios do?” And “Will Netflix be next?”
“5 Insights from Netflix’s Viewing Data for its Original Movies” at Whats-On-Netflix
After Netflix’s Earnings Report, I dropped a big Twitter thread with as many insights as I could pull from Netflix’s 30 or “datecdotes” they’ve released about their top films. Well, I found a few more and compiled them for a guest article at Whats-On-Netflix. Check it out to see what is the clear top genre of original Netflix film.
In another data-driven guest article, I pull out my “Google Trends” crystal ball to try to figure out which streaming film “won” July. The answer may not surprise you, but the margin of victory might. I also talk a bit about the economics of straight-to-streaming, which feels particularly relevant with new/collapsing windows popping up, and use that to declare some winners and losers of July.
“Visual of the Week: HBO U.S. Subscribers Over Time” at my website.
Since HBO released brand new U.S. subscriber numbers for HBO and HBO Max, I tried to put them in historical context. (I built this data set initially for my big series on “How Much Money did Game of Thrones Make?”) Overall, HBO Max has a lot of room to grow, and will need to grow past it’s HBO heritage to catch up to Netflix and Disney+.
“Most Important Story of the Week: CAA Fires Some Agents…What Does it Mean?” at my website.
Yes, the AMC-Comcast truce was the big news of the week, but don’t sleep on the struggles of the agencies. The gatekeepers to talent have been walloped by Covid-19 as dealmaking has slowed and their recent acquisitions have struggled. Meanwhile, one big group of talents has mostly shown they don’t really need agents. That plus thoughts on HBO’s subscriber numbers, antitrust hearings, M&A being down and big ratings for baseball.
“Most Important Story of the Week: Hotstar, Star, Hulu and the Perils/Promises of International Growth” at my website.
I tend to look skeptically at “global scale” in the streaming wars since most content doesn’t travel well. That makes Disney’s latest strategy change interesting, since they’re trying to leverage a regional brand in Hotstar India. Though this makes more sense than using their other regional brand, Hulu, but not by much. Read all about that plus Disney+ subscriber numbers, CBS All-Access revamp, and “lots of news with no news”.
Twitter Threads
First up, I check back on a story from March to show how initial headlines don’t capture the long term reality.
Next, I remarked about how one new traditional streamer has shown that they can compete in the streaming wars.
And here was my thread on their earnings report:
Finally, I provided what insights I could from Amazon, Apple, Facebook and Google’s sparse (for digital video) earnings reports.
And appreciate the shoutout from “Tools For Mgmt” which put me in with some great newsletter company. Their newsletter will probably interest anyone in the management or agency spaces.
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 - “Who Loses Big in the Great Streaming Wars? The User” by Alan Sepinwall at Rolling Stone
One of my favorite critics, Sepinwall digs deep into UX/UI in this fairly long article and overall its a good analysis. Too often, when analysts like myself analyze UX, we simply reinforce our priors. Since I’m bullish on Disney+, I think it’s UX is fine. Sepinwall doesn’t have a dog in that fight (that I can tell), and he reviews each platform fairly, with lots of business nuggets scattered throughout. (For instance, Netflix has a bad film selection; HBO Max and Hulu actually have the best catalogues; Amazon’s UX is really poor, but X-Ray is really cool.)
Other Long Read - “August Preview, Part 2: How Quickly Can the Box Office Recover?” By Bruce Nash at The-Numbers
What’s the best antidote to all the narratives floating around about Coronavirus and theaters? Some data. And one of the best sites for theatrical data delivers it in this two part series previewing August’s theatrical releases. Part II in particular uses actual box office compared to mortality rates to see how a decline in cases/deaths results in a return to theater going. In particular, the return to theaters can happen fairly quickly as soon as cases are under control. This isn’t all good news for theaters—the full recovery could take months and not start for weeks in the U.S.—but there are definitely bright spots.
(Oh, and our good friend the “Bass Diffusion Model” shows up. Specifically, an “S-curve”!)
Other Long Read - "The Real Message of Netflix’s 10 Most Popular Movies List: Filmmakers, Proceed With Caution” by Owen Gleiberman at Variety
Since I spent a lot of time this month analyzing what Netflix’s Top Ten most popular films mean for their business, it's worth providing another perspective. Gleiberman focuses on the Oscar awards fare type of films and asks whether it’s true that films can find more of an audience at home than they could at theaters.
Non-Entertainment Read - “Tech Companies Want You to Believe America Has a Skills Gap” by Rachel Rosenthal at Bloomberg
I love debunking widely-repeated, but not quite well-examined, theses on America. In this good read, Rosenthal tackles the idea that America has a “skills gap” that requires companies to import workers. It doesn’t, but companies do love the cheaper employees. (The one area I do think America has a shortage of is nurses and doctors, but that derives almost entirely from universities and medical associations deliberately shrinking the supply of doctors/nurses by not opening new schools.)
Newsletter of the Week - Penny Fractions “The Myth of Music Streaming Competition”
Penny Fractions explains the music streaming business about as well as anyone, and his latest missive takes aim at a topic that applies as well to streaming video: whether or not services backed by huge tech conglomerates are really competing or just side businesses.
(Feel free to share this free newsletter to any and everyone you want. It helps spread the word.)
(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.)