Most Important Story of the Week and Other Good Reads – 5 October 2018

Ever think you published your weekly column, then realize you imagined it Friday afternoon? Bummer.

Well, these have been coming out on Monday’s pretty reliably anyways, so it’s all good. The theme of last week (and then some) is pretty clear: turnover and people movement! Usually, I’d call one or two hirings and firings “lots of news with no news” but so many happened in different parts of media & entertainment & communications, that I elevated to the top story this week:

The Most Important Story of the Week – All the Hirings, Firings, Departings and Renewings

The Instagram founders are out!

Kathleen Kennedy is staying!

Bob Greenblatt is out! Ben Sherwood will be out! (In addition to Moonves being ousted earlier this month.)

And in the firings cases, they all got replaced by another very qualified executive (or executives plural).

The question, for me, as always, is the impact of all of it. That’s tough to assess because it requires predicting the future and/or assessing track records, that I just don’t have enough data to do. (For now. I’m working on it.) Anyways, I’ll blast some quick (as in not even gut, just blink) thoughts out, in rough order of impact:

Instagram Founders – Departing

I don’t know anything about the two founders, and I’ve been debating if “social media” is really entertainment. Given the time it sucks up from users, I default to “yes” even though tech has more than enough strategy guys covering it. (One great one in particular who I recommend for his Instagram take here.) Here’s my quick take: it’s a shame Facebook owns Instagram and society would be better if it didn’t. As for Instagram, it’ll be fine.

Kathleen Kennedy – Renewing

Everyone has said this is a show of confidence in Kennedy, (The Hollywood Reporter broke the story.) It’s hard to disagree. That’s what an extension is. The question is, “Should they have?”

This little section could act as a mini-update on some of my old ideas. To take just one from last week, the question isn’t “Did Kennedy do well?” (She did.) but how much better did she do than the “replacement”? VORP, in other words.

If I did have a “VORCEO” focused on entertainment, it would track chaotic productions versus smooth ones. Kennedy wouldn’t do well there. But it would also track box office success. So three $1 billion films in a row? That’s tough to beat. On the other other hand, Star Wars is an amazing brand, meaning context-wise I think a lot of people could have launched 3 billion dollars films with Disney’s support. I mean, the prequels were widely reviled, and they did really well financially.

Put it all together, can I just say, “I don’t know”?

Really, we’ll judge this move when the movie after next comes out. Episode 9 will do just fine…but after that it is unclear what fans want/will support. I’ve written about Lucasfilm a lot (links here and here) and overall I think she’s done well, but it’s unclear how well above replacement.

All the Broadcast TV people – Hirings, Firings and Departings

I will have more to say on development execs (my stand in term for studio heads) coming in future articles, but honestly, besides CBS, every network is constantly battling with other networks for ratings leader. That’s why I assessed this impact as a giant “Eh”. So Bob Greenblatt and Ben Sherwood are out. Okay, we’ll see what happens. New people are in. Okay. On the whole, probably nothing much will change, by which I don’t mean a vote of confidence. I enjoyed Joy Press’ coverage in Vanity Fair, though it is probably a bit too pessimistic.

Long Read of the Week – Apple News Gets Eyeballs, not Money

As a struggling independent write/publisher–trying to launch my own website in this day and age, can you believe it?–I really enjoyed this read by Will Oremus on Slate about how little revenue Apple News delivers to content creators. (He links to an earlier article on how Facebook’s changes to the news feed has crushed pageviews of websites. Both are good reads)

Not to make a second “anti-trust” argument in the same update, but giant “aggregator” apps like Google News, Facebook and Apples News may make the world worse for news consumers. Not, of course, in the simple world of Chicago School economics, where antitrust folks just ask, “Hey is it free?”. And reply with, “Well, if it is then the world is better.” In that world, we’re great with giant tech companies.

In the real, complex world where you ask, “Is the amount and quality and variety of content increasing or decreasing?” Then you have a more complicated answer. In that complicated answer, a lot of Apple, Facebook and Google’s behavior seems potentially beneficial to customers, potentially destructive to content creators and obviously monopolistic. It’s complicated.

The key quote in Slate–and like all things it ties back to “value creation”–is here:

Slate makes more money from a single article that gets 50,000 page views on its site than it does from the 6 million page views it receives on Apple News in an average month.

If true–and I’m always skeptical of all numbers always–then you’re seeing value capture in action. Slate can’t stay in business with this model; if it disappears than Apple captured all the revenue by modestly improving the customer experience in the short term. But customers are worse off and Slate is definitely worse off.

Another Long Read of the Week – Advertising on Broadcast and Streaming

I’ve been sitting on this article for months now, waiting for a slow news week. As long as I’m writing about advertising above, we might as well continue the trend, but applied to TV and streaming.

First up is an article about how NBC won the ratings game in 2017-2018. This is one of those great perspectives that ignore the week to week ratings game, and look at the larger trend. It seems even more appropriate to remind everyone of this as Bob Greenblatt leaves, while also noting a lot of it was “sports” even as we focus ont he creative. That trend is that across networks, the average among viewers 18-49 is 1.5 rating, and NBC had a 2.2, which was a huge lead. As this article explains, that lead was driven mainly by a lot of sports (Sunday NFL, the Super Bowl and the Olympics) along with some other good performers like This is Us and Will and Grace. That said, CBS remains on top with the most viewers total, at around 9 million.

Second up, I’ve been sitting on this article for months about how NBC-Universal wants to decrease the number of ads in primetime, specifically by making one minute ad breaks for certain shows. With a few months hindsight, did this happen? I think it did as I’ve noticed on some DVR’ed shows you can’t fast forward becasue the one minute ad breaks go too quickly. If so, bravo for changing. I appreciate the effort at innovation. As always, though, the economics are really tough; as both this Ad Age article and this Variety article points out, the math is not in NBC’s favor.

Third up, well, what are streaming platforms doing for advertising? It turns out a lot, or in Netflix’ case, still nothing. A report Hub Research from a few weeks back said that if Netflix added advertising, a lot of people would drop the platform. (Hat tip to IndiWire.) Maybe. But advertising is a seductive mistress. When you build a business model with ads, it gets really easy to increase revenue by just increasing the number of ads delivered. If Netflix ever experiences a cash crunch, be prepared for that trade off. That’s why Hulu offers ads now.

Listen of the Week – NPR’s Planet Money with Little Tweaks

For a just great economics in action podcast, take a listen to NPR’s Planet Money episode on “Tweak This”, where they ask economists for little proposals to improve the world. Their first idea is one I love: make all businesses put all taxes and fees up front in prices. This would overall tend to lower prices for consumers. (It would also decrease the information asymmetry in most business transactions.)

I have two proposed tweaks. One, which isn’t entertainment related is that on airplanes people in window seats should wait for the airplane to clear before getting up. Don’t make people wait for you to get your baggage, in other words.

My second tweak is for entertainment. Basically, I wish we had a common measurement system for all video that was open to all. So linear, DVR, Youtube, streaming, social: all videos are measured under one system with the same metrics and shared to all. Totally impossible; would be awesome though. (Again, it would drastically decrease information asymmetry in negotiations.)

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