Month: March 2021

Is This Black Widow’s Last Move? Explaining the Latest Covid-Theater Disruption – Most Important Story of the Week – 26 March 21

The big story of last week is fairly obvious: Disney moved Black Widow to July, along with changing the distribution strategies for Luca (now straight-to-streaming) and Black Widow (now going to theaters and  premium VOD).

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Most Important Story of the Week – Theatrical Return So Far

In the past, I’ve used Uno games, climbing a hill, and going into bankruptcy as analogies for theaters and Covid-19. But this might be the most esoteric analogy I’ve used yet:The best analogy for the return of blockbuster movies in theaters may be calling for artillery fire. 

In case you haven’t ever actually directed artillery fire, here’s how it works. First, you call the position in to the guns. They aim their artillery pieces, load in the right amount of charge, and fire a shell. But the thing about artillery is that it isn’t very accurate. Usually your first round is pretty far off. So you call the artillery battery back, and you “adjust” the fire, left and right, and up and down to get the guns firing where you want. Usually you cut the distances in half, then in half again, until you are right on target. At which point you “fire for effect”, or launch all the shells.

That’s like the return of theaters. At first, films were delayed for a year or more. Then they were delayed by a matter of months. Now, we’re down to moving films back by weeks. Eventually, we’ll stop moving them entirely. If I had to guess, we’re now locked in to the schedule–with simultaneous streaming launches as needed–for the rest of the year. In other words, by Q2 of 2021, big blockbuster films will “fire for effect” and start releasing week after week to finish the year.

Good analogy, right? 

Still, there’s more to explain. Today I’ll cover four areas: the latest Covid news that matters, the impact on theatrical distribution, the impact on home entertainment, and what I think could happen next.

Covid 19 Updates

The biggest driver of all these moves is still Covid-19. So let’s check in on the most important Covid-19 news since I wrote about it three weeks ago. This is sort of a “higher level than daily headlines”, which, due to the need to drive clicks, can sometimes be more misleading than accurate:

– First, more and more vaccines are being approved, and increasingly they all show benefits after one shot. For instance, for all its failed public messaging, AstraZeneca’s latest test results show it is nearly 100% effective at preventing serious illness. It will still likely be approved too late for use in the US, but this should provide further proof that it will work as a vaccine. The more vaccines we have, the faster we can vaccinate the entire world. 

– Second, another study provided more evidence that the Pfizer and Moderna shots are nearly 80% effective after just one shot. 

– Third, the US is accelerating its vaccine roll out. This is almost exactly on the “linear” model line I had modeled out in February. That model forecast that we’d be distributing about 2.7 million shots per day (using the seven day average) and as of today, that’s right where we are. 

Now, this is slower than I had hoped–I hoped we’d be at about 3.5 million per day by now–but even at this rate the US is on track to have 60% of the 16+ population vaccinated by the end of April. Including folks who have already had Covid-19, then the total protected could be as high as 75% by early May.

– Third, the increase in vaccinations is just starting to show signs that it is really driving down cases in the US, especially in the most vulnerable populations. This can be seen in the case rates and hospitalizations in older populations.

– Fourth, this distribution, though, isn’t equal. As this map from Covid Act Now clearly shows, states with warmer weather have seen cases drop much faster than in the northeast, just like last spring.

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– Fifth, this is all about the United States. Internationally, many fewer people are vaccinated than in the US, UK and Israel. As a result, some countries are seeing spring surges as they did last year. There are also signs of surges in the northeast states like New York, Connecticut and Michigan.

This last point likely influenced Disney the most.

The Impact on Theaters

As I wrote back in February, my model about theaters reopening was not about when blockbuster films would return to theaters. When I tackled blockbusters, one thing mattered above all:

Disney wants to maximize the revenue for potential blockbusters. It is one thing for films destined for $100 million in US box office to lose some revenue straight to streaming; it is another order of magnitude for a potential $1 billion dollar film to only collect 80-90% of its potential revenue.

Call this the “expected value” problem. When Disney had to make the call for how to distribute Black Widow–a call they had to make about six weeks early–two things likely scared them for how many theaters would be open by May of 2020:

1a. Europe is very likely going to be locked down.

1b. New York and other northeast states may return to lockdown, or their theaters won’t be at 50%+ capacity.

Above I talked about $1 billion in revenue, but that’s a global number; meaning Europe, America, China and the rest of the world. Disney needs the entire world to maximize revenue, and May just has too much uncertainty. Listen, forecasting vaccine distribution for one country is tough, so I didn’t bother building a model for Europe as well as the US. Same for predicting the course of the pandemic across the world. And looking just six weeks out, it is reasonable for Disney to think Europe will still be locked down. By July, likely even the slow rollouts of vaccines will have accelerated to the point to protect everyone.

I’d add that piracy makes this all worse. Once a film is released somewhere, it’s de facto released everywhere. So it made sense that Black Widow moved back dates. But then why did Disney also decide to release it on “Premier Access” at the same time?

The Impact on Home Entertainment

On the surface, this is an even bigger change. It is one thing to offer Raya and the Last Dragon on PVOD at the same time it went to theaters. Most theaters were closed. But Black Widow is the giant tentpole of the Disney franchise system. What are they thinking?

Well, probably that the pandemic could still be going on, and at some point Black Widow has to come out lest the entire movie calendar get stalled out. And if some places may still be on lockdown, then a PVOD offering can help those customers who can’t go to theaters. 

I’d call this the “Covid exception” at work. If the world has mostly reopened by September, I could see theaters pushing back on Disney on PVOD. For Black Widow, though? They’ll hold their fire. They need that giant tentpole.

The Future?

While I don’t like predicting the future, I think we can make a few guesses about what happens next. First off, I wouldn’t be surprised if more smaller films move around on the calendar. And by move, I mean move up into May. Again, Disney had billions (potentially) riding on Black Widow; if you have a smaller horror film, action flick or comedy, moving up into may get the best of both worlds: a mostly reopened American hungry to leave the house and a wide open release calendar. Indeed, I wasn’t tracking Wrath of Man, a Jason Statham action film, but it’s now coming out May 7th and released its trailer today.

These smaller films will get us through June. We can officially say that Q2 of 2020 will be bad for theaters…but starting in Q3 the revenue should be back. (Fast 9 opens June 25th.) Also, almost all the major theaters chains are fully capitalized through the end of the year. They probably can’t survive until 2022 with no tentpoles, but they can make it through the quarter.

As for home entertainment, I think that story will have to stabilize somewhere. Right now, each streamer/studio has their own plan. Netflix skips all extra windows; Comcast has a three week hold back until PVOD, and Disney keeps switching their plans. Meanwhile, even Warner Bros will likely be back to “normal” next year

I don’t think this will last. Business likes to settle into routines. It just makes life easier for everyone. So after this Covid disruption, I’d expect a new standard to emerge. The 90 day window is gone, but day-and-date streaming and wide theatrical feels unlikely too. Something along the lines of Comcast’s 3-week PVOD feels like the best bet for what all studios eventually commit to. But don’t hold me to that: the studios will settle on one standard, but precisely what is too hard to predict.

Other Contenders for Most Important Story

Viacom’s Stock Rise…and Fall?

A few weeks back, I noticed that ViacomCBS had been having a really good year. Their stock was actually up since the merger, which many folks doubted would ever happen. Then last week, as they planned to issue stock to take advantage of the price, a few Wall Street investors downgraded the stock and it went tumbling. In other words, over two years,  Viacom’s stock went as low as $14 and as high as $97, and ended up in the exact same spot as the merger price in December 2019:

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To make things crazier, now it turns out the stock dropped so quickly because of a highly leveraged hedge fund that had borrowed from multiple places. The story is still evolving, but the rise and fall could be because of this hedge fund, meme stocks and multiple other factors.

The lesson? Don’t pay attention to stock price, and especially not the day to day and even month to month movements. And especially don’t use stock price to tease out larger strategic lessons. If a stock can go as high as $97 and as low as $14, clearly it’s not a very precise signal to use!

Jason Kilar’s $52 million Salary

I wasn’t going to talk about this, but you know what? It is somewhat news. The top man at Warner Media–the man leading the turnaround–is getting paid a tremendous sum to make HBO Max a thing. Is it “worth” it for AT&T?

That’s the crazy part, because honestly I don’t think so. Frankly, I don’t think any top flight executives are worth these salaries. 

Think of it like this: who was competing with AT&T to pay Kilar $50 million dollars to run HBO Max? It’s not like Kilar would have that many other opportunities to run a huge multibillion dollar streamer. (Disney wasn’t hiring him, Netflix has Reed and Ted, Amazon had just hired another ex-Hulu manager and CBS seems satisfied with their Pluto team.) Why not offer him just $10 million dollars and the opportunity to run HBO? Did he have better offers? Who was AT&T bidding against? 

Or look at it from this angle: how many other folks would want this job? That’s the craziest part of this. There are hundreds of executives who would want and are qualified to have his job. And desperate to have it too.

In short, I don’t understand executive compensation. The ROI seems atrocious.

M&A Updates – Cable Companies Merge in Canada

In a sign that–despite what I’ve written–renewed antitrust enforcement isn’t on the table, up in Canada, the biggest cable companies are merging. Read about it here.

Did Netflix’s The Crew Stall Out? – The Streaming Ratings Report for 24-March-21

When I sit down each week to pull data for the “Streaming Ratings Report”, it honestly feels like Easter. (Why Easter? Well, we’re closer to that than Christmas and my eldest child is excited for candy delivered in plastic eggs.) This week, my chocolate-filled egg was a new color on the Nielsen rankings. That’s right, a new color! 

Check it out yourself:

IMAGE 1 - Top 30

For the last few weeks, the top ten has only been Netflix and Disney+. The other two big players, Hulu and Prime Video, haven’t had any shows or films make the list. Prime Video’s last entrant was One Night in Miami in January. Hulu has never made a Nielsen top ten list. Until now! Since I color code each streamer, seeing a new color in the chart made me irrationally happy.

(Reminder: The streaming ratings report primarily covers data from Nielsen’s latest report, which covers the week of February 15th to 22nd and is United States-focused. And due to an unscheduled childcare issue, this report is a day late.)


IMAGE 4 - TV Ratings Last 6

This week was a down week for Netflix on the TV side. The two big series we covered last time had their expected week 2 and week 3 drop-offs, which the weekly top ten data indicated. Moreover, the two new releases of the week would have failed to chart in Nielsen’s “top ten”, if it still combined originals, acquired and film in the same list. (That’s my current back of the envelope for whether something launched well.)

Let’s dig into one of those to put a little bit of context on Netflix’s overall viewing. Specifically, The Crew, a Kevin James helmed, NASCAR themed sitcom of 10 episodes, averaging about 27 minutes per episode. For the week, it netted 9.3 million hours in total. Which, in context, is about half of what Firefly Lane and Crime Scene did last week. Even worse, it was launched on a Monday, so it doesn’t have the “we only had three days of data” excuse.

What fascinates me, and should fascinate you, is that this is a “Kevin James” series. Sure, many reading that will be like, “Yeah, I don’t get what the deal with him is.” Fair enough but he did helm this:

King of Queen’s Nielsen Ratings via Wikipedia:

IMAGE 5 - King of Queens Data

That’s right, he was one of the building blocks of CBS’ monster sitcom and procedural lineup of the last two decades. (Also, I ride and die for the underrated Hitch.) That said, his last outing on CBS only lasted two seasons, Kevin Can Wait:

Kevin Can Wait Nielsen Ratings via Wikipedia:

IMAGE 6 - Kevin Can Wait

Let’s venture a comparison. With the tremendously huge caveat that streaming is fundamentally different than linear viewership, it is notable that The Crew had fewer than 10 million total hours viewed. We don’t have an apples-to-apples way to compare a full-season of live viewership to one week of binge viewing in a precise way, but no matter how you do it, this show likely stalled out in the middle of the streaming race.

Think of it like this, if 10 million Kevin James fans tuned in, then they watched about two episodes each. Or only 2 million tuned in and watched all ten episodes. In other words, the show either had a small initial audience or low completion rate. Or middling for both. And since this is streaming, the show will rapidly decay in viewership. This was its only shot, short of a second season, to get viewership.

In comparison, CBS can still get 7 plus million viewers to watch Young Sheldon. And that’s just one day of viewing:

IMAGE 7 - Nielsen Ratings

What tentative—and very cautiously tentative—conclusions can we draw here? The Crew likely didn’t launch due to some combination of 1. It didn’t work creatively 2. Netflix still doesn’t index well with the typical “CBS demo” and 3. Kevin James on his own isn’t enough of a draw. If I had to pick, I’d go with one, especially since Netflix released it on a Monday, which is as close as they get to “burying” a show, though explanation two intrigues me.

Other Quick Notes on TV

Good Girls—the NBC Universal owned, NBC aired—release on Netflix drove it to the top spot in TV. Want to know why Comcast/NBCU are so heavily invested in Peacock? It’s seeing viewership like this on other platforms. Shows clearly do have a second life on Netflix, and traditional channels now want to own that second life.

WandaVision had its highest week of viewership yet, breaking 12 million total hours viewed, up from around 10 million the week before. A sign of a “great” to “elite” TV series is that it can grow its audience in season 1. (Elite series then grow the audience season over season.) WandaVision is doing that, and all evidence is that it will peak with the season finale. (It is unclear if WandaVision will have a second season.)

IMAGE 8 - WandaVision


IMAGE 2 - First and 2nd Run Film

The big winner this week was Netflix’s I Care A Lot. Until I build my “historical” film comps—a trickier task than you’d think—I recommend this rule of thumb: “Did a film make into the top ten?” Even better, did a film make the top ten after launching on a Friday (Extraction, Spenser Confidential, The Old Guard, The Christmas Chronicles 2)? This week, I Care A Lot joins that crew, which means it had a good launch in the US.

From there, take a gander at the film in the second spot on Nielsen’s “Top Ten Films”. (As a reminder, Nielsen releases three top ten lists each week, with their definitions of “original TV”, acquired TV and film.)

IMAGE 3 - Nielsen Top 10 Films

Flora & Ulysses beat my expectation and made it onto the top ten list, but only with 4 million hours viewed. Back in 2019, I predicted that Disney could cut into Netflix’s then dominant streaming position with kids. The performance of Flora & Ulysses, along with the library titles like Frozen and Moana is what I meant. Though let’s not get too crazy. At only 4 million total hours viewed, F&U is clearly a kids title, not a four quadrant blockbuster. 

What about Nomadland, the other new entry? Well, it was pretty far from making the top ten list. For an Oscar nominated film—not at the time, but now—this isn’t terrible. Most “prestige/critically-acclaimed/awards-contending” dramas simply have limited upside. Still, at least Hulu finally had a piece of content make the “top 30” list. It will be fascinating to see if The Handmaid’s tale fourth season will crack the TV list this April.

Other quick notes on Film 

– Want some back of the envelope logic? Well, we know that Hulu’s Run opened Friday November 20th, and Hulu touted it as their “most watched” film of all time. They didn’t make the same claim for Nomadland. Thus, Nomadland is Run’s total viewership “floor” at 2.3 million hours and 7.6 million (the lowest total on Nielsen’s top ten from the week of November 16th by NCIS) is its “ceiling” in total minutes viewed. In other words, between 2.3 and 7.6 million people watched Run in its opening weekend.

War Dogs had the second week decay we expected and will likely drop off the top ten next week.

– The presence of Avengers: Endgame is not an accident. It is Marvel’s highest grossing box office title of all time, and it is the first MCU film to make the Nielsen top ten list. As for what’s driving this? Who knows. It could be WandaVision motivating some fans or just the general weakness in the film slates across the streamers. But as for a point I will often make: box office predicts popularity in the long term. Thus, if you were to guess the most popular Marvel film on Disney+, guessing the highest US box office grosser of all time would be the correct guess.

– Oh fine, is there a Netflix point with the Avengers: Endgame performance? Sure, this is 2 million hours of viewing that previously would have lived on Netflix. Moreover, I remain convinced that the top library titles on Netflix were Disney films of some sort or another. Avengers: Infinity War, likely, was a huge title on Netflix in 2019 when Endgame was first released in theaters.

– At the end of each quarter, after their earnings report, I’ll dig deep into Netflix’s “datecdotes”, when they provide the number of subscribers (“households”) who watched two minutes or more of a given show or film. They’ve released a few this quarter so far, but the most notable American example is Yes Day starring Jennifer Garner, which was seen by 53 million households globally in its first 28 days.

Coming Soon! 

– Battle of the Superheroes! Last weekend, The Falcon and Winter Soldier went head to head with The Snyder Cut remix of 2017’s Justice League. Given the buzz, both will likely make the Nielsen top ten when it is released in four weeks, if Nielsen is tracking HBO Max by then. The caveat is that the buzz was definitely for Justice League, so it may have over-indexed in buzz that didn’t translate to viewership:

IMAGE 8 G TRends

– Speaking of Nomadland, the Oscars announced their candidates for “the year without films, the 2020 Academy Awards”. Closer to the show, we’ll review the available data to figure out how popular these films were. (Another reason we need a “streaming box office” report.)

The Odds and Ends of the NFL Media Rights Deals – Most Important Story of the Week – 19 Mar 21

Last week the NFL media rights story went from “potential” to “actual” news. (The latter happens, the former is rumors.) Not to toot my own horn, but I wrote last week that the Disney-NHL deal would set the template for the NFL deal (and all future rights deals). And I was right.

That’s our story of the week. Which is a bit delayed because, frankly, March Madness basketball slowed me down.

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Most Important Story of the Week – The NFL Media Rights Grow 5.9% Per Year and Go Digital

Editorially, the NFL didn’t help me out. I had hoped the NFL would take a few more weeks to finish these deals, so my weekly column wouldn’t cover sports two weeks in a row. Last week’s column explored the strategic issues for all parts of the digital video value chain. This week, I’d like to provide a bit of context to the specific numbers for the NFL, speculate about the two remaining wild cards in the NFL media rights package, and give my overall thesis. In short, a bit of an “odds and ends” column.

Bottom Line: This Deal Isn’t “Earth Shattering”, But “Evolutionary”.

The NFL signed a big rights deal that we all knew was coming, and most observers assumed that all the major linear channels (Viacom, Fox and Disney) would insist on digital rights as well. Which is the deal we got. Did this stop some outlets from hyperventilating that this deal would “end the bundle as we know it”? 

Of course not.

Will it? Not really. If “earth shattering” means to figuratively have the Earth break apart like Alderaan in Star Wars, then this deal is not that. Unfortunately for narratives, most business trends resemble the slow but steady movement of the continents rather than earth-destroying super lasers.

For the vast majority of customers, they can (and will) watch TV mostly how they have before. Amidst this, TV consumption is slowly changing, as more Americans cut the cord. More but not all. As I often remind readers, though, this rate is still in the single digits percentage-wise. In 2021, cable “only” lost 6 million subscribers. Yes, this is a shrinking business, but the majority of TV viewers use cable or satellite to access TV.

This deal matches that slow evolution, not the online narrative. Since many customers are digital only, the NFL needs to reach them and ESPN+, Paramount, Prime video and Tubi provide that reach. But there are still so many traditional customers that the NFL can’t blow up the linear bundle entirely. Again, think “tectonic shifts” not “earth shattering”. 

(This is the “aggressively moderate” take versus the “headline grabbing soundbite” take.)

Whither Sunday Ticket?

Partly, I’m a bit disappointed that Sunday Ticket, the subscription service that lets DirecTV customers watch every NFL game, hasn’t been awarded to a suitor. Given the sorry state of DirecTV’s finances–they were just spun off from AT&T–it is unlikely they will renew this extremely expensive and exclusive contract.

So who grabs it? Amazon is often rumored, but likely the NFL has concerns that Amazon alone doesn’t have the reach to justify a deal. Neither would any one cable company, since no one cable company covers all of America. (That’s why the deal made so much sense for DirecTV, since every house was a potential customer.)

Hence Sunday Ticket is a “wildcard”. I think that the NFL could actually generate more revenue by letting multiple MVPDs and OTTs sell it as an add-on, for a given up front fee and splitting per customer revenue. (Say ESPN+, Apple TV+, Peacock, and Prime Video, plus any cable provider.) But that is much riskier for the NFL overall. The NFL prefers a big upfront paycheck, which may lend itself to one big (likely tech) player going all in. We’ll see which way they go.

Whither NFL Network?

One of the rumored sticking points in Thursday Night Football to Amazon was whether the deal was totally “exclusive”, meaning on every platform, or “digital exclusive”, meaning the only digital provider, as it was the last few years. The answer is the former, as TNF will leave its sometime home on the NFL Network. Losing an actual live sporting event will hurt the NFL Network’s negotiating position in the future, so conceding the point likely means the NFL knows the smaller linear sports channels days are numbered. Plus Amazon doubled the price tag, which likely makes up for the loss.

That said, there is the caveat that in their Press Release, the NFL said the NFL Network will carry some games. Hmmm. It will be fascinating to see what and how often these games show up on the calendar:

Screen Shot 2021-03-23 at 12.55.46 PM

Amazon Will Syndicate Airings to Local Broadcasters

That said, here’s a fun point: Amazon must syndicate rights to local markets for Thursday Night Football. That’s a footnote with big implications I didn’t see highlighted in the coverage!

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In other words, if hypothetically the Los Angeles Rams play the Kansas City Chiefs, a local broadcaster like KTLA could buy the rights for Los Angeles. In fact, Amazon must sell the rights to someone. Same for Kansas City. Everywhere else? They have to go to Prime Video to watch that week’s games.

How much does this decrease the overall value? Somewhat. Diehard NFL fans will tune in to Prime Video.  But the casual fans who only follow their team will have a non-Amazon option, which does decrease the upside for Prime Video. Does this make it a bad deal for Prime Video? Probably not. They still need to convince people to use Prime Video on a regular basis, and sports offer that opportunity.

This isn’t a “108%” increase, but a “5.9%” per year increase.

Whenever a big sports deal is announced, the league loves to celebrate the huge increase in price. Often announcing it “doubled” the previous deal. What they fail to mention is that the previous deal took place ten years before, so it doubled over ten years, which is less impressive. Since 2010, the S&P 500, for example, has gone up 249%, so if a sports right deal doubled in value, that’s less impressive than the just basic growth of the stock market!

I wrote about this before, here or here. How does this apply to the NFL? Well the previous deals were signed in 2014, roughly, meaning 9 years. Using the prices per year–from this great Sportico article–the actual per year increase is from $5.67 billion to $9.46 billion. That’s a combined annual growth rate (CAGR) of 5.9%, or an average growth rate of 7%.  Still really, really good to grow revenue by 5.9% per year! But not nearly as eye popping as 108% growth sounds.

For new readers, here’s the picture of what I call the Video Value Chain in all its glory.

The last two weeks, I’ve written about the Digital Video value chain. Here is that laid out in all its glory for those who don’t know:


What did the Twitterati have to say?

Every so often I collect your thoughts on Twitter. Here are the best hot takes I found:

Context Update – Antitrust Heats Up as Biden Appoints Lina Khan to FTC

Mergers & acquisitions are fun to write about. You get to imagine two companies putting together their combined business heft and dominating a new industry, or presenting a unique new value proposition. Ignore how often the mergers fail to deliver the expected value in real life; on paper they’re fun! (Especially compared to building a real strategy, which is often much harder.)

This game was especially fun over the last four decades, as US and global regulators mostly allowed every deal to pass through. (There are a few exceptions, like Comcast and Time-Warner Cable and AT&T and Sprint, but they are vastly the exception.) But has the tide turned on antitrust? And does the business community have an accurate gauge on that yet?

Maybe not. That’s my outlier hypothesis right now. As I wrote last November, whether or not Democrats will fundamentally change antitrust enforcement (from lax to aggressive) depends on President Biden’s appointments. On this front, he has been mixed. Some appointments are traditional (meaning lax) corporate lawyers. Others are strong advocates for renewed antitrust enforcement. Some advocates for stronger antitrust enforcement were disappointed when Biden nominated Rohit Chopra for head of the Consumer Financial Protection Bureau, since he was very aggressive on antitrust as a member of the Federal Trade Commission. Then Biden nominated Lina Khan to the FTC. She’s just as fierce of a critic, and a protege to Chopra, . Khan helped write the House Subcommittee on Antitrust report on Big Tech last year, and is a rising star. She’ll likely be a strong advocate for increased scrutiny on future mergers and acquisitions. 

Toss in economist Tim Wu joining the White House Council of Economic Advisors, Chopra’s commitment to enforcing rules at the CFPB, and the Senate weighing new antitrust bills that may–but likely won’t–have bipartisan support, and I see a changing landscape. Heck, when a Republican Senator writes an op-ed in favor of unions, anything is possible!

Yet the business community isn’t ready for this outcome. After a down year in deal-making due to Covid 19, they’re ready to get back on the merger train. (Speaking of, two big train companies want to merge.) Writing in his newsletter, Matt Stoller noted:

Screen Shot 2021-03-23 at 1.06.32 PM

So what is the most likely outcome? Well, deal making won’t slow down until the Biden Administration sends even clearer signals that it will stop deals from happening. I expect this will start first with increased scrutiny on “megadeals”, those over $5 billion in value. 

As for entertainment, this biggest potential impact is that Big Tech will be a pinch more worried. (Big Tech being at least Apple, Google, Facebook and Amazon, maybe Microsoft, maybe Netflix.) Sure, maybe increased antitrust scrutiny won’t come for train companies, but clearly Big Tech is in the crossfire. This could hamper the long hoped for M&A spree of Big Tech on smaller media companies. That would change a lot of potential strategy.

Other Contenders for Most Important Story

Netflix May (Huge May) Crack Down on Password Sharing

To continue the game of the last two weeks, is this “actual or potential” news? Every few months something about password sharing and Netflix circulates on the Twitter (and then news websites) rumor mill.

Is this one different? Maybe. On the actual side, Netflix is genuinely running test messages telling customers to not share passwords. On the potential side, Netflix hasn’t actually limited password sharing to one household yet either.

Tubi May Produce Original Programming

Because of course they will. Everyone is making originals. However, paired with the news that Tubi will carry Fox NFL games, clearly the remaining pieces of Fox post-merger with Disney (Fox broadcast, Fox Sports and Fox News) see Tubi as the future.

Alibaba May Have to Sell Media Businesses

For a perfect example of a “potential” news story, see this Alibaba news out of China. Sources say that Alibaba may have to spin off media businesses to stay on the Chinese government’s good side. Let’s wait until this actually happens, but China seems to be cracking down on media consolidation by Big Tech in their backyard.

Walmart Considering a Smart TV Device

Walmart has a confusing approach to the Digital Video/Big Tech “dust up”, as The Economist recently described it. (Tech is having a dust up whereas entertainment is having a war.) A year after buying Vudu and then selling it to Comcast, Walmart is back exploring if they should manufacture/brand a streaming stick under their brand.

The WME IPO is Back!

Buried in the news coverage was the return of the WME IPO, derailed by Covid-19 and a weak economy last year. Will it stick this time?

Lots of News with No News – March Madness

I’m sure I’ll stumble across articles either bemoaning, celebrating, worrying or any other emotion over the ratings for March Madness this year. Whatever they are, folks will likely use them to justify their preexisting beliefs on the future of TV, digital videos and the streaming wars. (Apply this to awards shows too if you’d like.)

I, meanwhile, will enjoy the tournament and how well the Pac-12 is dominating, especially my Bruins. Let’s hope they don’t delay any more columns!

How Big Were Firefly Lane and Crime Scene for Netflix? – The Streaming Ratings Report for 17-March-21

As often happens in scientific/data endeavors, sometimes you work for hours/days on a project with no results, then, all of a sudden, it comes together and you make tons of progress rapidly. And usually the “tons of progress” doesn’t happen without the days of drudgery. 

That’s what happened to me over the last week or so. After a few days of struggle, yesterday morning I had a breakthrough. Which delayed publishing this article. Unfortunately, most of the benefits won’t be immediately obvious, as they’re updates to my backend system to help me analyze more data better and faster. (Don’t worry, a few juicy tidbits make sneak in this week.)

(Reminder: The streaming ratings report primarily covers data from Nielsen’s latest report, which covers the week of February 8th to 14th and is US viewing only.)


IMAGE 1 - Nielsen TV Ratings Last Six

If three words define my goal for this report, they are “Context, Context, Context”. You can go to the trades to find a summary of Nielsen’s data. This week you would have learned that the top two series (again for the week of February 8th to 14th) on Netflix were Firefly Lane and Crime Scene: The Vanishing at the Cecil Hotel with nearly identical 21.4 and 21.5 million total hours viewed.

So the question is: are those good or bad numbers?

Well, thanks to the data work of the last week or so, I think we can start to provide some answers. Context!

Let’s start with the new launch. Using my Nielsen database, I collected all Netflix “first run”—meaning Netflix Originals—series in my database going back to March 2020. Why season one/limited series only? Because it just isn’t “apples-to-apples” to compare The Crown, which has 40 episodes as of this writing, to a show with only four. (This was only one of the data projects of the last week.)

According to Nielsen’s data, 23 TV series netted a spot on a weekly top ten (in 2020) or top ten “originals” spot (in 2021). Of those, Crime Scene did phenomenal. It had the third strongest opening in total hours viewed and the second strongest opening for series in the “viewership per episode” metric I also calculate. Here’s the total viewership of those 23 series:

IMAGE 2 - total by day week dayPretty good!

But there’s a catch. (With data, there always is.) In addition to the “season” launched, I added the day of the week. Thus, I can cut the data in quite a few different ways. In this case, see if you can spot my thesis:

IMAGE 3 - Table by DayYep, I arranged the new series by release day of the week.

Why does this matter? Nielsen’s data covers a week worth of viewing, but that means that shows released earlier in the week have, by dint of time period measured, more of a chance to succeed in the rankings. Thus, we need a new metric, one I’ve used before called “average viewership per day”. Here’s that look in chart form:

IMAGE 4 - Chart Viewership by DayTakeaways? Well, yeah Crime Scene is one of Netflix’s bigger hits. More impressively, it did that with a very small number of episodes. But the extra few days of viewing definitely helped. Toss in the small number of episodes, and it will likely decay quickly. (As have past true crime documentaries.) We’ll watch for that. That said, Netflix does have a true crime niche that clearly is working. And it is likely much cheaper to make true crime docs than big budget scripted TV.

What about our second big series, Firefly Lane? It had a big second week. Again, the question is, how good is 21.4 million viewers in the second weekend? 

To answer this, I pulled the second week of data for the 30 first run Netflix series with Nielsen data in their first or second week of release. That gave me this table:

IMAGE 5 - Drop Off TableOf the 15 new series (season 1 or limited) launched since March 2020, Firefly Lane had the eighth best second weekend. However, unlike many other series which grow their audience into the second weekend, Firefly Lane was essentially flat. Using “viewership per day”, it declined 30%, when the average series drops only 23%. Bottom line? It is a good show, and maybe a great one. But it isn’t “elite”, like Bridgerton.

(For those who are curious, I have data for 33 first-run TV series. 7 series in the data set had an opening weekend in the top ten, but then dropped off week 2 and 8 series didn’t make the list in their first week, but did for the second. Two didn’t have numbers until week 3 and one series I don’t have data for its second weekend, Tiger King.)

Also, using the weekly top ten data, do we think these two shows will hold on? For Firefly Lane, yes; for Crime Scene, no. Crime Scene could, though, outperform Firefly Lane during the week of February 15th.

IMAGE 6 - Weekly Top Ten 2 SeriesAs I said above, we’re just scratching the surface here. As Nielsen continues to publish three weekly top ten lists, our ability to judge successful launches (and bombs/busts) will only grow.

Other Quick Notes on TV

WandaVision added it’s sixth episode, and grew its total viewership to 9.9 million hours from 9.8 million the week before. That’s impressive, and it will be fascinating to see if Falcon and Winter Soldier mimics that growth. In other words, part of my thinks that something like 7-9 million folks are watching just one episode on Disney+, which would make it one of the most watched series by unique viewers.

– In the sign of a down week besides the top of the charts, Lucifer made its first appearance on a top ten since new episodes came in August, showing up as the tenth series in the “Originals” top ten list, with 3.2 million hours viewed.

– Looking at the releases by weekday, you can see above that Wednesday really is “true crime” documentary day on Netflix, with releases like Fear City, Jeffrey Epstein: Filthy Rich, Night Stalkers and Crime Scene.

– Regret the Error 1: When new episodes of Cobra Kai premiered, I changed the label from “second run”, meaning episodes premiered on Youtube TV first, to “first run”, because new episodes premiered on Netflix first. But I didn’t update weeks three to five, so my data table made it look like it dropped to zero. That’s been fixed this week.


IMAGE 7 - Film First and Second Run

The big Netflix original launch for this week was the third part of To All The Boys I Loved Before. I’m not ready to deliver as much context for film as TV this week—trust me, we’re getting close—but since Netflix released it on a Friday, To All The Boys will likely take the top spot in next week’s Nielsen rankings. (For this week, I cut all films released in 2020 to focus on new releases in 2021 so far.)

As for the third weekends of the two films we monitored last week—The Dig and Finding ‘Ohana—both are still on the list, but decaying week over week as expected.

As for films we didn’t expect, the top film on streaming wars…checks notes…looks it up on Wikipedia…squints eyes in confusion…checks notes again…War Dogs. Yes, the Miles Teller and Jonah Hill helmed, Todd Phillips directed, drama from 2016. It was new to the platform and got the “new to Netflix” bump.

Here’s the consolidated top 30, which shows how light film was compared to TV this week:

IMAGE 8 - Nielsen Top 30

Other Quick Notes on Film:

– We had another international film to make the top ten film list, Space Sweepers from South Korea with 2.3 million hours viewed. According to my data, this is the first South Korean film to make the Nielsen rankings.

– Oh, and we have one of the first non-kids Disney+ films to make the list, Avengers: Endgame, also with 2.3 minion hours viewed. This reinforces one of my working theories that, when they were on Netflix as part of that huge output deal, the Disney films drove tons of repeat viewership.

– Regret the Error 2: I jumped the gun on Malcolm & Marie (M&M), but luckily I wasn’t too wrong. During Super Bowl weekend, I made a note to myself that M&M was going up against that big sporting event. But then, researching for my database, I saw on Wikipedia that M&M had a limited release in theaters on January 29th, and somehow recorded that as its release. In reality, Netflix released it on February 5th, the Friday before the Super Bowl. Thus the Nielsen ratings from February 8th-14th cover M&M’s second weekend of release and I previously wrote that Super Bowl weekend was its second weekend of release.

To compound the mistakes, my article last week was confusing in that I transitioned from a bullet point on M&M into a bullet point on The Little Things, without clarifying that I had switched films. For clarity: Malcolm & Marie was a Netflix film, but starred the talent from HBO’s Euphoria (lead actor and director). Meanwhile, The Little Things was Warner Bros’ second release on HBO Max and theaters simultaneously. With that context, here’s the Google Trends chart I showed last week:

IMAGE 9 - Film Trends

The unfortunate thing is that we don’t have data on either film—Malcolm & Marie on Netflix and The Little Things on HBO Max. Nielsen doesn’t track HBO Max yet and M&M likely didn’t have enough viewership. We can extrapolate that for M&M its interest/buzz (as shown by Google Trends) clearly exceeded its actual performance (as shown by the lack of Nielsen data).

ESPN Grabs NHL Rights, Setting the Sports Media Rights Template – Most Important Story of the Week – 12 Mar 21

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I love when a weekly column like this ends up having a “theme”. This week, that’s the difference between “actual” and “potential” news stories. The former are things that happen: a movie opens, a company launches a new product, or a studio head steps down. “Potential” news stories are all the things in the news that may happen: a company may be putting itself up for sale, a studio head is considering leaving or, most commonly and consequently, two companies are negotiating and are close to announcing a deal.

In the last few weeks, we’ve seen the difference between actual and potential stories play out with sports rights in particular. The NFL had quite a few “potential” stories, from a potential deal with Amazon (still not finalized) to potentially poor negotiations with Disney for Monday Night Football (also not finalized as of this Monday morning the 15th of March). Then, in the middle of last week, with no forewarning–that I saw–Disney and associated sports entities (ESPN, ABC, Hulu and ESPN+) and the NHL announced a 7 year, 2.8 billion sports rights deal with the NHL. That’s actual news! And it’s our…

Most Important Story of the Week – ESPN Grabs NHL Rights for Pay TV and Digital

Gosh I love this story. It combines sports with almost every part of the “digital video value chain”. First, I’ll go over the basics–if you missed them–and then the ramifications, from the most disrupting digital to the most disrupted linear.

First, Andrew Marchand delivered the basic facts in a tweet:

Marchand later adds that Disney is going to raise the price of their bundle from $13 per month to $14 upcoming, partially my guess is to pay for this deal. As John Ourand points out, this deal only covers some of the NHL’s content output. Potentially up for grabs are the NHL Network, NHL.TV, their digital OTT service, more national games for broadcast (about 20) and whatever happens to regional sports networks (RSNs).

The remarkable thing, overall, is how close this deal is to what I expected for the next round of sports rights. The rights are shared between linear and digital. And the deal is with a partner who can offer both linear and digital distribution, Disney. Some games will air exclusively on digital, but the crown jewel playoffs will air on ABC (and maybe simulcast ESPN+). Moreover, the rights aren’t on a league-owned platform, but part of the Disney bundle.

I can imagine that some of you won’t think the NHL is that big of a deal. But frankly, it is one of the four major sports leagues in the US, even if it is clearly fourth. Or fifth if you put college football ahead of it. Which is barely amateurism anyways. (Commentary!)

Let’s review the impact on each part of the value chain and speculate about what this deal may say about the future of sports rights.

Digital Streamers – ESPN+ is the first third-party streamer to grab sports rights for a major professional sports league. 

The non-NFL professional sports leagues had dabbled with owning their own streaming sports applications and channels “over the top”. Indeed, an MLB subsidiary, MLBAM, created the application for baseball.  The MLB then spun off this into BAMTech, which Disney bought to become the backbone for Disney’s streaming business. However, most of those league-owned applications are niche streamers at best. Because the true power of sports is in a bundle of sports in a bundle of content. 

Clearly, ESPN wants to deliver that sports bundle in the 21st century, the way they delivered that content for linear cable in the 2000s. I expect this trend to continue and most league-owned streamers will eventually fold or get purchased by larger sports streamers, as ESPN and Peacock have already done.

Traditional Broadcast – Still Not Dead…Yet.

I thought the sports leagues would avoid going “digital only” because the risk is that you lose quite a bit of eyeballs in the process of collecting extra revenue. As I wrote when Peacock secured the WWE streaming network, the risk of any league is that if only the hardcore fans follow you to a very small channel, your brand suffers as casual fans drop out. 

Hence, most leagues are looking for a partner who can offer both digital natives and traditional viewers content. As big as cord cutting is–a point I’ll make repeatedly–more folks have traditional cable than do not have cable in America. (See below) As a result, the traditional players still seem best positioned to secure sports rights for this round of negotiations. 

A traditional player and Big Tech company could partner to offer both digital and linear rights. But given that Comcast, CBS, AT&T and Disney all own streaming platforms, they won’t partner with a tech platform. That leaves Fox. The challenge then is “exclusivity”. Since having exclusive content drives so much of the value, splitting rights doesn’t traditionally work. Even then, it would make more sense for DAZN or Amazon to buy a linear channel than vice versa.

By the end of the decade, this could change. For now? I’d keep betting on most major sports deals to happen with the traditional players, but with digital rights included.

Traditional Cable – ESPN is still the behemoth.

ESPN was a must carry channel in the cable ecosystem. As such, it commanded the highest prices for customers in the traditional bundle. When it added the SEC Network and Longhorns network, it only entrenched this position further.

Traditionally, the focus is on the value of games. What is more fascinating is how ESPN did and does drive coverage outside of games. Frankly, with the NHL owned fully by NBC, ESPN downplayed its coverage of hockey. It covered Stanley Cups and the playoffs, but highlights took a backseat to the other sports. Some have speculated that this hurt the NHL’s brand and I agree. Will ESPN’s coverage of hockey increase after his deal? Probably.

As a result, any league, professional or amateur, needs to have some presence on ESPN. To have that share of voice. That said, I like having a second partner as well to keep prices honest. Take the NHL on NBC. That still gets a ton of publicity from NBC to drive the coverage. If I were advising sports leagues, I’d say your best bet is to be on ESPN in some capacity, but have a back up partner who is incentivized to drive your product, like either NBC/Peacock or TNT/HBO Max.

The NHL Network – At risk.

John Ourand covered this best, so I don’t want to steal his point and will just quote him:

…if you read between the lines, the future of that network does not look so rosy, especially since Disney’s high-respected affiliate team no longer will be handling its carriage deals.”

Meaning it could go away. Speaking of disappearing cable channels…

Regional Sports Networks – Unclear, but potentially very bad.

A big wild card for me is what happens to the regional sports networks now. Most  NHL, NBA and MLB teams own their local viewership rights. (The NFL controls national broadcasts since their supply is much more limited.) Regional sports networks first disrupted local broadcast channels by buying these rights, with some college rights throughout the 2000s. Ultimately, several teams disrupted the RSN disruptors and launched their own channels. (The Yankees and Lakers being arguably the two biggest.) As the bundle starts to collapse, RSNs will likely be one of the first casualties. (Though don’t guess when. Predicting the future can be easy, predicting when is very, very hard.)

My question about this deal is how many of these ESPN+ games are inventory previously dedicated to RSNs. If the answer is “all of them”, that’s a lot of lost content for RSNs to lose. My guess is that ESPN+ will have out-of-market rights. That obviously dampens a lot of the value for customers, since most fans still care about their local team first and foremost.

Was this a good price?

Uh, I don’t know? It was definitely a jump in price, the way all multi-year deals are. Specifically, the deal from 2013 with NBC was for about $200 million per year for seven years. This price alone doubles that price, and the NHL still has more games to sell. Overall, though, I’d say this is inline with past price increases. As for whether ESPN+ can make that back for Disney, maybe, but not by itself. Meaning this is a stepping stone deal in some ways.

What’s Next?

First, ESPN+ has a head start on everyone, including DAZN. They’ve managed to leverage their power position as ESPN to start securing OTT rights. That’s a big deal. But they can’t and likely won’t stop here.

Second, all eyes turn back to the NFL. Seriously guys, make a deal for something! My best guess is Disney and the NFL do a similar deal for Monday Night Football, and it likely mimics the key components of this deal, with digital and linear rights. Though don’t put it past Disney and friends to do something crazy with NFL Sunday Ticket.

Third, Amazon still wants NFL rights. The most likely outcome is they get more Thursday Night Football, but they could be the first digital only deal. But I doubt it. The NFL Network is more valuable than the NHL Network, and the NFL doesn’t want to hurt that value prematurely. Likely, a split-deal (not exclusive to digital) is still the likeliest outcome.

Fourth, since most biz executives are naturally conservative–in temperament, not political leaning–I expect most leagues will copy the NHL and ultimate NFL deals in their rights deals. However, between Disney, Comcast, AT&T, ViacomCBS, DAZN, Amazon and any wildcards I may have missed, the leagues should all drive higher prices for their content.

Lastly, customers will see all this in their digital streaming bills. As Andrew Marchand pointed out, the Disney bundle will be up to $14 after this deal is done, for Hulu with ads. In other words, as Disney bundles sports, some of that cost will be passed along to customers.

Entertainment Strategy Guy Update – Should Netflix License Its Content?

If you want a perfect example for why I wait to call a story news until it actually happens, here’s a headline from this very website last May I stumbled upon this week as I was updating my website:

Screen Shot 2021-03-15 at 3.07.04 PM

But you’ll notice, since that headline, Apple hasn’t actually bought a library. I jumped the gun. The premise was so sexy, I wrote an entire column on it. But I was wrong! (The strategic logic though is still spot on.)

I feel the same way for the huge headline dropped by The Information this week:

Screen Shot 2021-03-15 at 11.51.14 AM

First, The Information is definitely filling the void by the general move of the trades away from breaking stories. Since The Information is subscription-driven, not FYC advertising driven, they can drop a few bigger tidbits every so often. Credit to them for this scoop in a series of scoops.

That said, I don’t want to go too far in calling this actual news, since, notably, we haven’t actually seen the goods. Netflix may ultimately license their wholly-owned series into second windows, or they may not. Or this story may be something less groundbreaking, but still interesting. Until we see a big series arrive on another streamer and/or linear channel, this is just a “potential” story.

But I had some quick thoughts.

– This may be cover to explain why some “Netflix Originals” will end up on other services/channels. For example, Orange is the New Black. That’s a show owned by Lionsgate. Essentially, Netflix has to pay to keep it streaming after a certain number of years pass. (We don’t know specifically.) Earlier shows like OiTNB had shorter hold back than some recent series, so it’s a show I’m keeping my eye on. Netflix could have leaked this story to help explain why more and more licensed shows end up elsewhere.

– The math here is pretty simple. If a show is worth more to someone else than it is to you, you sell it to them. Netflix benefitted from this for years; it was worth more to Netflix to license big movies to its service than it was for movie studios to keep them in the vault or on cable/home entertainment. 

– The converse could also be true now. Some linear channels or streamers could benefit more than Netflix by leveraging the buzz/awareness Netflix built for a show like Grace and Frankie or OiTNB to get some subscribers. Given the volume of new releases on Netflix and how most shows seem to disappear into their morass of library content, I could see content being more valuable off Netflix.

– The Marvel angle. Does everything revolve around Marvel? Maybe. The story to monitor here is when all these series with “Marvel” in front of them return to Disney, who owns them outright. Do they end up in the Marvel tab in Disney+? That’d help flesh out the Disney+ offering. I’d have said DIsney wouldn’t do this, since they could want a coherent MCU offering, but then they put the X-Men films onto Disney+, and even a Fox X-Men character–spoiler alert–in WandaVision. Given the commanding negotiating position of Disney in all negotiations, these Marvel shows could leave Netflix sooner than you’d guess.

– This article only referenced selling subsequent windows of content, but you have to wonder how far a revamped theatrical window is. Given that all the streamers have different windows, something could be worked out with one of the theater chains for some content.

If this happens, I’d call it both a big deal and the right strategy by Netflix. Clearly, this is a firm focused on cash flow positivity from here on out. Nothing is more cash flow generating than joining the content licensing biz. We’ll see if it happens.

Other Contenders for Most Important Story

Disney Investor Day: Disney Passes 100+ Million Subscribers; Will Close Some Retail Stores

The Disney streaming business chugs along, and they announced that they passed 100 million subscribers. I don’t have a lot of strategic takes on that big news, but Disney is also shutting some of their Disney stores across America. Likely, the explanation is what you think: Covid-19 crushed retail stores, especially malls. Lastly, Disney is planning to reopen Disneyland in California in April as California emerges from lock downs. Taking the balance of these two stories, theme parks have a higher upside than merchandise going forward.

Peacock Joins Hulu and Netflix in Losing Money

What if no one can actually make money in streaming? We know that Netflix lost money for a decade plus, that Hulu lost money for all its owners and all streaming is losing money for Disney. Now we know that Peacock has joined the money losing streaming crowd

Listen: all new businesses lose money at the start as they gain customers. But the key to valuations is accurately estimating how much money a business will make at full-strength. There is still the chance that streaming video is just much less lucrative than traditional cable. The sooner everyone can make money–and for Netflix go beyond just breaking even–the better for industry valuations.

Pay TV continues Its Losses According to Moffett Nathanson

Every year, Moffett Nathanson produced one of the definitive estimates of cable subscribers in the US, and recently it has highlighted the trend in cord cutting. 2020 was no different, though I will note that the potential acceleration of cord cutting presaged by Covid-19 didn’t really come to pass, as customer losses was about the same as 2019, a non-pandemic year.

AT&T Investor Day

AT&T announced they are expecting 120-150 million subscribers by 2025 and HBO Max’s AVOD option will come in the summer. The AVOD news interests me more, as it really seems like it will complicate their offering for customers. Previously, HBO Max had an easy value proposition to communicate. Well, actually they didn’t. Customers didn’t know if they had it, or if they had to pay and how. Now, customers may end up seeing a bunch of ads. So I’m hesitant to call this a good idea.

M&A Updates – Roku Acquiring Nielsen TV Advertising Biz

This is a small, but fascinating deal. Roku is acquiring Nielsen’s smallish smart advertising business. But in the acquisition, they’re also incorporating Nielsen into their TV measurement, which should make Nielsen numbers more accurate in the future. Axios has the details.

Did the Super Bowl Take a Bite Out of Streaming Ratings? The Streaming Ratings Report for 7-Feb-21

If you read my “Who Won the Month” articles over at Deciderhere, here, here, here, here or here—you’re probably wondering where one of my favorite data tools has been. That’s right, I’m talking about Google Trends data. It’s not perfect but when it works, it works wonders. And this week we have just such a job.

The focus of these reports is “streaming”, but streaming ratings don’t occur in a vacuum. Even as cord cutting has accelerated, more folks subscribe to cable TV in America than don’t. Those who don’t usually still steal borrow their parents log-ins when needed. Meaning a big TV event on broadcast could still, potentially, impact streaming ratings.

Was there an event during the first week of February? For sure: the Super Bowl.

(As a reminder, since Nielsen’s ratings have a four week lag, the Nielsen data is from the week of February 1st to February 7th, which includes the Super Bowl on February 7th. At the end, I’m testing a new feature for the series/films premiering between then and now.)

TelevisionIMAGE 1 - TV Last Six UPDATED v02The winner of the week of February 7th was Netflix’s season 1 of Firefly Lane, which sure seemed like a bit of counter-programming to the Super Bowl, at 21.8 million hours viewed in its opening week. It also premiered on a Wednesday, likely to help find an audience before the weekend.

Meanwhile, Disney’s WandaVision is gaining strength week-over-week, rising to a season high of 9.8 million hours viewed, up from 7.2 the week before. (Though Bridgerton still had more total viewership.) How does this compare to some other weekly-released genre series? Glad you asked. Here’s the ratings data per week, along with the “per episode” viewership:

IMAGE 2 - Three Looks at Genre

I gave three data cuts, because I can’t decide if factoring in season one episodes or only season two is a better look for an approximation of “viewers per episode”. Either way, the ability for WandaVision to grow its audience and potentially pass The Boys in viewers per episodes is impressive. 

Even more impressive? WandaVision is about half the length of The Boys and 3/4th of The Mandalorian. I’m dabbling with a “ratings” score for TV series, which factors in the number of episodes and their length. When it’s ready—tentatively April—you’ll see that analysis.

Will WandaVision’s ratings hold up through the season finale? Probably. Here’s the Google Trends look for the big shows of January:

IMAGE 3 - G Trends Jan Shows v02

Tons to unpack here. First, Cobra Kai had a buzzier peak, but you can see that Bridgerton passed it in staying power. This aligns with the Nielsen data, which is why I trust both these sources. Meanwhile, if the Google Trends hold, WandaVision will keep adding viewership just like Disney’s previous tentpole series, The Mandalorian.

IMAGE 4 - GTrends - Mando v WandaVision

At first, I was going to type, “Disney’s hit rate on TV seasons is now 3 for 3 which is incredible”, but that would be wrong. One of the themes of this report will be to look for “dogs that aren’t barking” to quoth Sherlock Holmes. In this case, we forget that Disney has indeed launched other series, even scripted ones like Muppet’s Now. The majority of these have been smaller reality series. The better way to describe it is that Disney has successfully launched every “tentpole” series to date. If The Falcon and Winter Soldier can continue that trend, that’s a tremendous competitive advantage for Disney: Once per quarter Disney+ has a new series that makes it must tune-in for millions of households.

Other Quick Notes on TV

– Kids TV has a bit of a “dogs not barking” situation too. Specifically, whereas Netflix can routinely put kids series into the originals or licensed top ten—Cocomelon, Jurassic World Camp Cretaceous—Disney hasn’t yet. Explanations could be: 1. Disney has many more kids series, so viewing is more dispersed. 2. Kids watching Disney tend to rewatch movies or 3. More kids watch Netflix overall. We’ll need more data to figure it out. (In the meantime, check out Emily Horgan, writing at What’s On Netflix, for deeper look at kids data on Netflix.)

Blown Away stayed on the top ten originals list of this week, which surprised me. Still its on the downward trend cycle like most other originals.

Fate: The Winx Saga had a big drop off into its third weekend. It would have dropped off the “combined top ten” list this week.

FilmIMAGE 5 - FIlm First RunAs I opined last week, The Dig and Finding ‘Ohana did well for Netflix, rising to the first and second spots in the film list. However, the numbers are a pinch misleading. If you look just at the above chart, you’d conclude that there wasn’t much decay week-over-week in the ratings. Au contraire, as I’ve written, “The decay is real.” In this case, if you factor in the number of days the film is available, you see the decline. (In other words, total viewing per day.)

IMAGE 6 - Film DecayLet’s make a call: were The Dig and Finding ‘Ohana hits? I don’t think so. Truly popular films don’t just top out on the film list, but earn a sport on the combined Nielsen Top Ten list. Neither of these films did that, in the weakest week of 2021 so far.

Other Quick Notes on Film

– Is it just me, or is it genuinely shocking that Malcolm & Marie didn’t make this list? Talk about a “dog not barking”! It’s by the creator of Euphoria, with the lead star of Euphoria. That is about the buzziest show in the world—it won an Emmy!—and their film didn’t crack the top ten on its opening weekend for Netflix.

(Update: After hitting publish, I updated these two sections. Previously, I put that Malcolm & Marie was in its second weekend, when it premiered the Friday before the Super Bowl. Also, the next bullet point was supposed about Denzel Washington’s The Little Things, which was poorly written and unclear. We–meaning I–regret the error.)

– Fine, let’s just call this week the “dogs not barking” edition. The other film with a big January release was The Little Things on HBO Max and theaters simultaneously. But Nielsen didn’t report numbers for it either. In this case, it’s because Nielsen wasn’t measuring it. To get an accurate result, Nielsen needs a statistically significant amount of viewership on a given streamer to make the top ten lists. Right now that only includes Netflix, Prime Video, Hulu and Disney+. They made an exception for Wonder Woman 1984. Instead of Nielsen, Google Trends can give an idea how well The Little Things and Malcolm & Marie did:

IMAGE 7 - Film Trends

In other words, The Little Things did pretty well! HBO Max has kept marketing these films like tentpoles, and awareness is doing really well.

Did the Super Bowl Impact Total Streaming Viewing?

Did the Super Bowl suck the oxygen out of the streaming room? Maybe. Here’s the total viewership of the Nielsen Top ratings charts for 2021, including all numbers, the top 13 (which is we know for certain) and the top five pieces of content:

IMAGE 8 - Weekly Total ratingsLikely the Super Bowl caused a down week, but the numbers had been trending down since December’s big finish. Still, the lack of new releases by most of the major studios reinforced the decline. It’s a chicken and egg situation: did the Super Bowl cause down ratings, or did streamers avoid Super Bowl weekend, which caused down ratings

Either way, they were smart to do so. Here’s the Google Trends for the TV series, with the Super Bowl:

IMAGE 9 - Super Bowl Trends

Coming Soon! 

I’ve started to get some questions—and please send me more! Twitter or email—about some recent releases and my thoughts. Unfortunately, Nielsen has a four week publishing lag, and since I trust it the most, it delays this report. Here’s a sneak preview of major releases I’m monitoring for February to March:

Raya and the Last Dragon. Last fall, one of my most read articles was this analysis determining how many folks watched Mulan on PVOD for Disney+. Will I replicate that analysis for Raya? Probably. Most likely, I’ll wait until we have the Nielsen data in four weeks.

Coming 2 America. According to Google Trends, it’s as popular as Amazon and Screen Engine claim. Though I’d love to have concrete data.

IMAGE 10 - Film with C2A

– The Snyder Cut “Mistake”. HBO Max “accidentally” replaced Tom and Jerry with The Snyder Cut over the weekend. Which feels almost impossible from a project management work flow perspective. Both Tom and Jerry and The Snyder Cut are on my radar.

– Oprah’s interview with Meghan Markle (and that guy who was with her.) This was hugely popular. Interestingly, while it streamed on Paramount+, ViacomCBS doesn’t own it, Oprah’s Harpo Productions does. Where could it end up on streaming next?

– Apple TV+’s Billy Eilish’s documentary was huge. For them. For whatever that means. Julia Alexander at the Verge splashes cold water on this for us.

Cresting the Covid Hill – As Many Films are Moving Earlier in the Year for the First Time in This Pandemic – The Most Important Story of the Week – 5 Mar 21

When the biggest story of the week is essentially the same story as the previous week–Paramount+ launched to customers this week after they announced specifics at the previous week’s investor’s day–then you know it is a quiet week for news. Despite this, dare I say this week had some stories that could be described as “fun”? Not hugely important, but fun. 

But one story was important. This week may mark the week when the bleeding was stanched for theaters: as many films moved earlier in the release calendar as moved backwards. Since we haven’t written about movies in a pinch, with all the latest shuffling, it is the “story of the week”. 

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Most Important Story of the Week & Covid-19 Tracker – Fast 9 Moves From May to June

If I have a crutch, it is quoting my second favorite author too often. Several times in the life of this website, I’ve slipped in a Tale of Two Cities reference to explain a current strategy or trend. You know the quote–”the best of times and the worst of times”–but it’s such a terrific opening to a book, it’s worth quoting the first paragraph in full:

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”

Dickens, writing in Victorian England about England and France of seventy years before, is basically saying that all time periods have this universal feeling that things are the worst and best at the same time. And guess what?

That quote perfectly describes how we feel right now!

Many Americans will tell you that because of the pandemic, lockdowns, racial injustice, economic inequality, culture wars, and countless other issues, we are living in the worst of times. Both sides of the aisle will say this. The numerically inclined among us, though, would point out that, despite the pandemic, more folks around the world live longer, safer, richer and better lives than ever before. Even the pandemic, for all its tragedy, could be hopeful: a deadly new virus was cured in less than a year with a revolutionary vaccine process, which force a medical breakthrough that could lead to curing future diseases, like malaria.

(Also, how apt is the phrase, the “epoch of believe and the epoch of incredulity”, for our current media consumption/landscape?)

Enough English literature tangents. Theaters went through their own version of the “best of times/the worst of times” this week. After describing the latest movement in theatrical dates, I’ll update the latest Covid-19 vaccination rates data to update my “reopening hypothesis”. 

Part 1: For the first time, films are moving earlier in the calendar.

Here is that quick summary of the news:

– Sony’s Peter Rabbit sequel moved up to May 14th.
A Quiet Place 2 moved up to Memorial Day weekend, a date it now shares with Disney’s Cruella

These offset the big headline, which is that Fast 9 moved back to June, and that pushed the next Minions film even further backwards in the timeline.

Overall, if you’re a theater or theater chain, you have to feel more and more confident that distribution will be almost entirely back by May. President Biden recently announced enough vaccine doses for every American adult by the end of May and that likely means theaters will show films to almost fully-vaccinated audiences. 

Of course, folks read a column like this for hot takes predicting the future. Reading the trade leaves, my gut is that more shuffling is due to come, but don’t ask me when or how. Black Widow could still move, although more likely they’ll add Premiere Access to the distribution if they don’t think there are enough open theaters at full capacity. Some smaller films could still move up, but most films will likely stay where they are. In all, I don’t feel confident predicting specific moves because there are too many variables.

But I am confident that the vaccine roll out will change things.

Part 2: The vaccine roll out continues to reinforce my “reopening hypothesis”

In case you haven’t read my very, very long article forecasting reopening of society, here’s my core thesis on reopening in America:

If current lockdowns can drive down cases…
Which will drive down hospitalizations/deaths…
While the United States is vaccinating the highest-risk groups…
And if the pace of vaccination is increasing…
Since vaccines prevent deaths and hospitalization…

Then once we get the current hospitalization rate down, it will stay down until the next flu season (next November or December). If hospitalizations are down, deaths will stay down as well.

This will allow states to reopen, including theaters.

Let’s go part by part, rating each part of the thesis with a “more confident”, “less confident” or “neutral” status.

Current lockdowns are driving down cases → Neutral

This was trending towards strengthening until a few states ended mask and indoor mandates this week. Through February and into March, cases have continued to drop in Los Angeles and America broadly. Most experts believe we should avoid indoor activities with unvaccinated people, especially at full capacity, for a few more weeks to fully drive the number of cases downward. (This does not apply to outdoor activity.) But ending mandates could reverse the progress so far. Thus, it’s tough to predict that cases will continue declining as fast as they have. (We are also seeing a decline in testing, which we need to stay flat to catch as many cases of community spread as possible.)

Hospitalizations and deaths are declining → Strengthened.

Deaths have always lagged cases and hospitalizations. Both of which are still higher than our previous lows, but declining week-over-week. Crucially, where the initial and summer waves were concentrated by regions, the winter wave was a national event, so each region is arguably doing better than the previous waves. Also, while some visualizations showed spikes in death’s last week, this was actually bittersweet news. Deaths have declined so much that big states can review and update their mortality figures, like Texas, Virginia, Los Angeles, for example. In other words, the peak in fatalities in December and January was even higher than we realized at the time, but that means the current death toll is lower than the figures indicate.

Vaccinating the highest risk groups → Strengthened

The CDC tracks vaccinations by age, and the most vulnerable groups are the most vaccinated. There are hurdles, especially in underserved communities, but we are vaccinating older populations who are most at risk:

Screen Shot 2021-03-05 at 12.36.18 PM

Continue to increase vaccine distributions → Strengthened.

A week ago, a winter storm essentially slowed down all US vaccinations. That would have kept this rating at neutral last week.

But we’ve rebounded. We’ve almost returned to the linear growth we were at before the winter freeze. With Johnson & Johnson being approved and essentially a double dose of vaccines coming last week, America could, tentatively, pass the 3 million vaccinations per day threshold next week or the week after, having passed the 2 million threshold this week. 

Screen Shot 2021-03-05 at 12.38.01 PM

Vaccinations prevent deaths and hospitalizations –> Strengthened. 

All the data–which is becoming voluminous–indicates that vaccinations prevent deaths in high risk age groups, vaccine efficacy begins within 2 weeks of the first dose, and that vaccines prevent transmission. I can’t undersell just how well the vaccines work and how being vaccinated will allow people to return to normal life. This isn’t a selective reading of the data: there are mountains of evidence now that the vaccines are incredibly effective.

Add It Up: We’re on track to “return to normal” in the springtime

There are too many variables to put a specific month or week date on it, but the trendlines are growing. As I mentioned before, the main driver or reopenings will likely be the decline in the death rate.  If deaths go down, and stay down, even if cases rise later, society won’t return to lockdowns. 

Consider it like this: even if cases peaked at the same height as they did in the winter, the peak in deaths will likely be 44% lower, because 55% of the population who are age 65 and older are now vaccinated. 

Screen Shot 2021-03-05 at 1.27.01 PM

If we continue to vaccinate the 65+ group–and those aged 50-65–then the peak in deaths will be even lower. This is where we are as of this moment…in two weeks the deaths prevented will be even higher.

The other reopening criteria concerns the state and local guidelines. The news this week was that New York had lowered its case level to a point where theaters could reopen. San Francisco as well. This leaves Los Angeles as the holdout. According to California’s metrics, Los Angeles was at a “7.2 adjusted case load” and it needs to be below 7 for two weeks to reopen theaters at 25% capacity. If cases continue on their current trends in Los Angeles–a huge if–they’ll join SF and NY soon. 

Other Theatrical Stories – Tenet Finally Premieres in New York

Frankly, I wasn’t looking forward to my first film in theaters being Godzilla vs King Kong. But Tenet? Oh yeah, I’m down for that! Theaters in Los Angeles, San Francisco, New York and other big cities may have a surprising amount of inventory, which wouldn’t have been the case back in the fall, and this could help both theaters and studios confidently reopen.

Other Theatrical Stories – Alamo Drafthouse Bankruptcy

To finish on another depressing note, a theater chain has been claimed by the pandemic. Alamo Drafthouse declared bankruptcy, while expressing optimism for the rebound in customer demand. This filing may be more of a legal maneuver, as the chain says they will be able to continue operations, just with new financing/ownership. Still, they did have to declare bankruptcy.

Other Contenders for Most Important Story

Kevin Mayer Joins DAZN Sports Streamer

It didn’t take long for Kevin Mayer to end up at another streamer. After leaving Disney for Tiktok, then leaving in a political brouhaha, Mayer has ended up as chairman of DAZN, the sports streamer trying to vie with ESPN and FuboTV for future sports streaming glory. This is a fine move, but I would note that Mayer is known for deal-making–that was his key role at Disney–and this likely increases the odds that DAZN is involved in future deals, either acquiring or being acquired. (Given its size, I’d guess the latter.)

BBC/ITV/Channel Four May Team Up..and That’s Smart

A few weeks back, I stumbled on this fun look at European TV revenue from one of my favorite analyst groups, Ampere Analysis:


The size of Netflix’s revenue growth is impressive, though in context it’s smaller than I would have guessed. (And I’d guess many others think it’s higher, given huge headlines like the one above.) But those revenue numbers can explain this fun story that British broadcasters are merging their free to view applications. Something along the lines of the enemy of my enemy is my friend, but it could be a compelling offering for customers. 

Ion TV/Scripps is a Masterclass in Strategy

I respect great strategy, and Scripps (with some private equity help) show us how it’s done. (Not that there is a lot to love with PE, but they can make sharp business moves.) In this case, Scripps sold it’s channels to Discovery at nearly the height of their value. Now, Scripps is going to launch new cable channels through Ion TV because American rules state that cable providers must carry broadcast channels, with certain restrictions. Toss in the ability to sell linear channels to the FASTs in their boom, and this just smart strategy. 

Twitter’s Publishing Moves

I write long threads on Twitter, and now Twitter is constantly letting me know that they have a newsletter product. That and everyone is worked up that folks may start charging for access to tweets. Frankly, everyone is charging for content nowadays so this isn’t surprising. But will it work? I’m less sure. For as influential as Twitter is, most Americans don’t consume their news through it and those who do usually soon feel like it’s bad for them. (I certainly do.) But given that their advertising revenue just isn’t cutting it, this move makes sense.

Apple TV Comes to Google Chromecast

Another round in the “distribution” wars, this time with Apple TV coming to Google’s Chromecast, which is a phrase that would have made no sense ten years ago. It makes crucial sense for Apple. Most folks have Apple devices of some sort, but they don’t necessarily watch TV through Apple. So getting more distribution for their app make will help justify the content investments.

A Down Week Makes for Some Strange Ratings: The EntStrategyGuy US Streaming Ratings Report for 3-March-21

[Editor’s Note: This is the second edition of a new website feature, a weekly report on streaming ratings. One of the quirks of the streaming wars is that no one knows what shows or movies are doing well, what are doing poorly and what failed to launch. If you have any questions or data you’d like to see, let me know!]

This week’s ratings are frankly one of the weirder weeks since Nielsen started releasing their top ten lists. Since ratings were down overall, smaller and odder titles got a chance to make the list.


IMAGE 1 - TV LineAs with most weeks, Netflix was the dominant performer. What makes this week strange is how it got there. 

Only two originals made the top ten in overall viewing. One of them was Bridgerton, which testifies to the incredible staying power of that show. Bridgerton is likely an “elite” series for Netflix in the United States now, along with Stranger Things, Orange is the New Black, Ozark and The Crown. Fortunately, Netflix owns Bridgerton outright, unlike OITNB, Ozark or The Crown. 

Though a hit series (without new episodes) can only drive viewing for so long, and Netflix’s end of January launches didn’t seem to hit. Season two of reality series Blown Away only had 7.3 million hours viewed, which in 2020 would not have been enough viewership to make the top ten lists most weeks. Bling Empire didn’t make the top ten originals list for a second week either. Fate: The Winx Saga did gain week over week, but it will likely fall off the list in the next week or two, judging by its top ten list performance. (It is also the latest in a line of teen dramas produced by Netflix. At some point, all Netflix series may take place in high school/boarding schools.)

The other big series were library or second run titles, including the latest season of Outlander. Here’s the top ten list if you only highlighted wholly-owned or originals:

IMAGE 3 - Nielsen 30 Originals Wholly

Which brings us to the studio/streamer dominating the film list, Disney. Many third party analytics firms continue to estimate that WandaVision is one of the most watched series in the US. (See Parrot Analytics or TVision for two examples.) So why doesn’t WandaVision perform higher in Nielsen’s ranking? The explanation is simply that series with more episodes do better in total hours viewed, as I showed last week. This trend only continued this week. WandaVision added only a single episode, but its total hours went from 6.3 million to 7.2 million.

Other Quick Notes on TV

– US viewers continue to avoid international originals, except for shows from other English speaking countries. Indeed, the most exotic series come from Canada (Schitt’s Creek, Blown Away), the UK (The Dig) or joint US/UK series (Outlander, The Crown). Notably, all English speaking series. Technically, Fate: The Winx Saga is partly from Italy, but that series is also based on a show that aired on Viacom’s Nickelodeon and is in English. The hypothesis that Netflix is able to take advantage of global scale to launch series may be true, but that’s happening despite the US, which continues to watch English language programming.
Disenchantment by Simpson’s creator Matt Groening is likely a disappointment. Premiering on January 15th, it has already dropped off the total hours list.
Longmire is the latest Netflix original to make an appearance on the bottom of the “Originals” top ten list well after its latest season dropped. Other examples from January include Designated Survivor appearing the week of December 28th and Great British Baking Show throughout January.
– As expected, Lupin with only four episodes dropped off the US top ten lists after only two weeks in the top ten.

FilmIMAGE 4 - Feature Films

Film may be even weirder than TV. The biggest film on Netflix was Lionsgate’s The Next Three Days, which was originally released 11 years ago and only grossed $67 million at the US box office. It was added on January 22nd, so what a “Netflix bump”.

Even stranger, it wasn’t like Netflix didn’t try to launch some own original films of their own. Netflix released at least three potentially big films, The Dig and Finding ‘Ohana. The Dig and Finding ‘Ohana both made the top ten list for film. All three were released on a Friday (January 29th) so they could gain steam. However, as we’ve seen repeatedly, most films usually lose viewers in their second and third weeks, especially when measuring by day.

The Netflix daily top ten lists to get an idea of where this is trending. Using FlixPatrol’s collection of this data, here’s February’s list. Finding ‘Ohana will likely gain the most:

IMAGE 2 - Weekly Releases

Other quick notes on Film

– The expanded look provided by Nielsen (three top ten lists instead of one consolidated) continues to provide additional insights as we get more data. For example, the importance of recently released films is even more important than I had thought. Of the seven new pieces of content to make one of the top ten lists for the week of January 25th, six premiered in January. And four were released in the week of January 25th, including Below Zero, Finding Ohana and The Dig.
Soul has decayed down to Mulan/Frozen II levels. I suspect that Onward likely dominated the film lists in the spring, though I don’t have data to prove it. If this is true and Soul performs similarly, then Soul will likely stay at this level until Disney has a new kids film to launch on the platform, meaning Raya and the Last Dragon after its “Premiere Access” window.
– Netflix’s library titles that are action or thrillers seem to over-perform. Of the January titles on the film list, many fit this bill, some with obscure origins like The Next Three Days, Killers, 30 Minutes or Less, The Vanished and Homefront.


Netflix dominated streaming in January. Of the forty films or series in the consolidated top ten in January, only one was not on Netflix, Soul during the week of 4-January.

Nielsen Top Ten Last 4 weeks

[Editor’s Note. I hope you enjoyed this quick look at the ratings data of the week. And trust me I know this is very “Nielsen”-heavy analysis. It won’t stay that way. I’m working on adding weekly top ten rankings, IMDb, Google Trends and other data slices to make this as comprehensive, while readable as possible. The key, though, is that I don’t want to add any data source piecemeal or anecdotally. I have to analyze, vet and understand the data before incorporating it.

By the way, if you’re an analytics firm who would like to partner or provide data, please don’t hesitate to reach out.]

Covid-19 Tracker: What Should Disney and Universal Do with Black Widow and Fast 9?

Week to week, other stories may be the “most important”, but that doesn’t mean that Covid-19 isn’t still the biggest story. As I wrote in a very long article on February 19th, we’re moving away from “lockdowns” as the story to “the reopening of society”. However, that article was limited in that I mostly focused on theaters, not movie studios. The trends that may allow for theaters to reopen are different from the business rationale for studios to release their tentpoles in theaters. They’re related (correlated even), but not causal.

But that still leaves the open questions: will Disney release Black Widow in theaters? what about Universal and Fast 9?

Let’s first review the upcoming theatrical slate, then get to the specifics for those two studios.

The upcoming theatrical calendar could help theaters reopen.

Notably, I didn’t put any specific timelines for when and at what levels theaters could reopen. The variables are too many. States have different criteria and regions have different rates of outbreaks. However, the models do show that a clear majority of folks will have access to vaccinations by the launch of Black Widow on May 7th. Other models back this up. Here’s data scientist Youyang Gu’s look:

Screen Shot 2021-03-02 at 11.20.25 AM

Why wait so long? We’re vaccinating folks so quickly and cases are still generally dropping. Could the reopening take place even faster? Especially with news out last week that New York is reopening theaters at 25% capacity? Could both New York and Los Angeles be open by March? And what would that mean? 

For context, here’s The-Numbers upcoming theatrical calendar:

Screen Shot 2021-03-02 at 11.23.50 AM

Interestingly, these are films that are locked into the calendar. Raya and the Last Dragon will be in theaters and available on Disney’s Premiere Access program. Warner Bros is releasing all their films both on HBO Max and in theaters, including Tom and Jerry last weekend, King Kong vs Godzilla on March 26th and Mortal Kombat in April. In other words, for the big films in March, they aren’t going anywhere, because of the dual release strategy.

Ironically, for as much as theaters hate losing exclusivity in the long run, in the short term this could give them some confidence they will have movies to play if theaters are open at either 25-50% capacity by the end of March. In the fall, there was a chicken and egg problem with theaters: they didn’t want to reopen without big movies to play, but studios didn’t want to give them big movies to play until they were open. The Warners and Universal films being released anyways may solve that problem. Or take this fun quirk: Tenet will premiere in New York this weekend since it never was officially released in theaters in New York. Same will happen in California eventually.

For a few months now, I’ve been focused on Black Widow as the tentpole that was needed to bring theaters back. It’s Disney and, even better, it’s Marvel, so that’s as close to a sure thing a studio could have. But my focus on Black Widow may be too late. If Los Angeles and New York are open for business by March 26th, Godzilla vs King Kong may claim the title as first “blockbuster” of the post-pandemic era.

(And if I were at a studio? I’d be looking to move films up into April. If you get rid of the (largely artificial) constraint of needing a full six to eight week marketing campaign, something like James Bond could slot into April 23rd and have two weeks by itself in theaters. But this is risky/aggressive, which isn’t usually how you’d describe movie studios.)

Despite this, Disney may not open Black Widow on May 7th

As bullish as I am on the “return to normal”, I am not confident Disney will open Black Widow on May 7th, as it is currently slated. There are as many good reasons as bad ones for Disney to keep or move the date. Some of them are qualitative and some are (or could be) quantitative.

Reasons to Move:

– The “expected value” of moving the film may still be positive. Here’s that quick math. The total domestic box office haul of Black Widow (or Fast 9) is in the hundreds of millions. Call it $500 million. (Above the other top individual hero films, but below everything with the Avengers or Black Panther.) Right now, with theaters at 50% capacity or closed altogether, the worry is that Black Widow will only get some percentage of that. Say 75%. If Disney could move the film back just a few weeks to get 100% of that domestic box office, then you’re talking about making an extra $125 million. If you want to quibble with these assumptions, go for it. This is why modeling is tough! But the basic shape of the problem–moving back guarantees higher returns–is in studio executives’ heads, and why they moved all the 2020 films to 2021 in the first place.
– Culturally, especially the progressive/liberal side of the culture, it is seen as irresponsible to be associated with anything that involves leaving the home. Every late night host I saw equated opening theaters to killing folks. The studios can/do worry that they will get lots of negative PR for helping theaters reopen.
– Disney has to make the call soon. Related to the expected value decision, Disney has said they’ll make their decision in the next couple of weeks. Even if the numbers continue in the right direction, there will be plenty of uncertainty about how the situation will look in May. There is lots of speculation about variants and a spring surge. Cases could easily spike in a “spring surge” that shuts down society again. (Though deaths won’t spike with them.) 

Reasons to Keep the Date:

– The entire Disney MCU calendar needs to starting hitting theaters to tie in with the Disney+ TV series. At some point, even Disney can only wait so long. Moreover, the “expected value” of moving the entire calendar back may not be worth it. In other words, say you think Black Widow will still get 90% of the potential domestic box office, that could be worth airing so that Disney can still release Shang-Chi in July and Eternals in November. Getting ninety percent return is much better than getting 0-25%, which was what would have happened if Black Widow premiered last November.
– Disney and Comcast could both try dual release strategies, allowing their films in both theaters and Premium VOD windows simultaneously. That would allow Disney to keep their MCU schedule intact. (This is actually the best argument for keeping the date.)
– The sooner Disney gets MCU films in theaters, the sooner they come to Disney+. Since theatrical films are great at attracting new customers, this would really help Disney+ drive subscriber growth.
– PR-wise, there is also the story to sell that Disney was the film that brought folks back to theaters. That could be a story as positive as it has risks. Especially if the mood of the country shifts and the narratives about getting vaccinated to return to normal are seen as positive.

Add it up? And I have no idea (nor inside info) on what Disney plans to do.

Neither keeping the date, nor moving it would surprise me at this point. While there seems like enough evidence that going to the theater has much less risk than indoor dining, the latter will likely restart soon, but theaters remain in reduced limbo. And so will big tent pole films.

Is Paramount Plus “Focused” on Winning? – The Most Important Story of the Week: 26-Feb-21

Sometimes, I can only fight it so much. As much as I want to pivot and pick a unique story from every other analyst, sometimes I just can’t. The top story is what it is. Yes, every columnist wrote about Paramount Plus investor presentation this week. But it really was the story of the week.

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Most Important Story of the Week – Paramount Plus Is a Focused Strategy, But Is It Focused Enough?

Part of me is sympathetic to ViacomCBS. Their executives read the news coverage as much as anyone else and all they see is analysts calling them out for not going all in on streaming. Then, when they try to go all in on streaming, as they did this week, those same analysts call them out for being too late or not doing it right.

They just can’t win.

Of course, if you get that much criticism, some of it is likely warranted. ViacomCBS has been far from perfect, starting with that merged name. But they’ve been undervalued for so long they’re probably overvalued now. First, CBS is dismissed by observers because, frankly, they make shows for the part of the country that isn’t online. Second, I think their brands have more value than they’re given credit for. Third, between Showtime, CBS and Viacom, their library assets are strong. Fourth, Pluto really does seem to be killing it.

I can synthesize these two differing viewpoints down to this one word:


A good strategy, as strategy guru/UCLA Anderson professor Richard Rumelt describes it, is “focused strategy”. If you want to know the genius of Netflix over the last twelve years, it is that they were insanely focused on streaming.

Focus is also usually how disruptors beat incumbents. The incumbent has legacy businesses to protect. Sometimes–like with cable channels–those legacy businesses make lots and lots of money. Getting rid of that cash flow usually isn’t wise. So the legacy business will half-heartedly start a second business unit to mimic the disruptor. That means a company will have two different businesses competing with each other. By definition, that strategy isn’t focused. The genius of Disney under Iger was how swiftly he executed the pivot to streaming once he decided to do it. That was a focused strategy.

ViacomCBS has not been focused, even since the merger. While the announced a renewed focus on streaming, by planning to put all their Viacom assets onto CBS All-Access, they turned around and sold many of their current top series to other streamers. Like Yellowstone or Spongebob Squarepants. And Showtime is still lingering out there as it’s own streamer. Add to that Shari Redstone’s comments that they aren’t focused only on streaming and it’s not crazy to conclude that, yeah, they still don’t have a focused strategy.

But–and this is key–isn’t Paramount Plus their most focused strategy decision to date? They’ll be putting nearly all their best content into that streamer. Sure, they’ll still have two or three different streamers–Paramount Plus for subscription, maybe Showtime still, and Pluto TV for AVOD viewing–but the whole company is mostly behind them. In other words, they’re more focused than they ever have been. True, they aren’t winding down their cable and broadcast channels, hence Redstone’s comments about being a content company, but those businesses make billions each year. It’s one thing to be disrupted; it’s another to destroy legitimate cash flows too soon.

So that’s the “focus” part, but is this a “strategy”? Simply getting into streaming isn’t enough. Streaming is just a technology. Strategy is having a business plan to win.

Streamers need focus, but importantly they need to focus on a strategy. The successful streamers have had focused strategies leveraging their strengths. Disney is a house of uber popular brands, and Disney+ reflects that. Discovery Plus is the type of reality shows that, again, Hollywood chattering classes don’t watch. (Or do, but won’t say so on Twitter.) Peacock’s focus is on every part of TV that isn’t scripted. Those are all strategies I like.

My gut is that Viacom CBS is realizing that their streamer needs to be the scripted version of Discovery Plus. The home for the type of shows that made CBS the most watched network in the 2000s. Whether they have enough content or whether they can avoid the shiny objects of prestige TV, but at least they could have a strategy. And if that doesn’t work, just having the NFL could be enough. (Seriously, if ESPN+, Peacock and Paramount Plus end up as the future homes of the NFL, that’s a lot of guaranteed subscribers in the US.)

Overall, Viacom CBS is far from Disney or NBC Universal when it comes to showmanship in an investor day presentation. But that doesn’t matter for customers. (And an investor presentation is notably not for customers.) What matters is whether a company has a unique value proposition they can market to customers. I’d argue ViacomCBS is more focused on their strategy than they ever have been with the Paramount+ rebrand. I still wouldn’t put it in the same tier as the other streamers I just mentioned, but it’s better than it has been.

(Last point: the dunking on the choice of a name just needs to stop. Paramount is a much bigger brand outside the US than any option Viacom CBS had. Clearly they have global aspirations–which most of the dunking analysts also claim to want–and want a brand name that can deliver that. Meanwhile, the Paramount logo is still recognized in the US. Lastly, it doesn’t matter. 20 years ago, Netflix and Amazon weren’t brands. Now they are. Brands and name changes can come and go easily.)

Data of the Week – Discovery+ Gets To 11 Million Subscribers Worldwide

I’ve avoided setting projections for each streamer’s launch, because the error bars in those projections are huge. (Indeed, those who did project subscriber estimates for Disney+–especially the Disney bears–were off by tens of millions. That should dissuade any of us from making estimates!) However, I doubt I would have predicted that Discovery+ would get to 11 million subscribers in less than two months. 

When I update my “estimates of US subscribers” for the end of 2020 (coming soon!) Discovery Plus will be on the borderline between the tier 2 streamers (20-50 million subscribers) and the bottom tier. If they can double this number in their first year, they will be well on their way to establishing a foothold in the streaming wars. Notably, this is a worldwide figure, so parsing out the US totals will still require some guess work.

Other Contenders for Most Important Story

Direct TV spin off

AT&T is spinning off DirecTV to raise money to both pay down debt and buy wireless spectrum. The new venture will be 30% owned by private equity firm TPG. AT&T has long been looking to offset the disastrous DirecTV acquisition, so this isn’t a huge surprise and AT&T will still have a majority stake in the new venture. Long term, I don’t see this changing their priorities in streaming or cellular much.

The FCC’s Wireless Spectrum Auctions

I won’t pretend to be an expert on wireless spectrum, but the other big news from the week was that the FCC held an auction for additional “spectrum” that is needed for 5G. Verizon bought the most licenses in the new “c-band”, which is crucial for 5G. Overall, the spectrum set records for the FCC, indicating the high value of 5G for the cellular companies.

Disney+ Acquiring Licensed Series Globally

In the kids front–read my take on that from last week–Disney+ has acquired the streaming rights for two different series. Even Disney can’t produce everything they need for streaming. (Hat tip Emily Horgan.)

M&A – Vivendi Plans an IPO for Universal Music

With the fierce competition in music streaming from all the big tech companies and Spotify, music catalogues have seen their values rise considerably. As such, Vivendi is actually spinning out Universal Music Group into its own company. I’ll be curious how long it lasts as its own entity before getting purchased by some other player.

Lots of News with No News – NFL’s Next Round of Contracts

There have been lots of headlines about potential prices for the next round of NFL media rights deals. But very little facts. Let’s wait until this story finishes, then we can write about the implications.