Category: Weekly News Update

Most Important Story of the Week and Other Good Reads – 7 December 2018: Youtube Pulls Back on Original Programming Edition

I should call this a round up of the last two weeks. Even though I got my column out on time last week, I had a lot of spill over ideas. So many stories that they bled into this week’s edition. (Which is late again.) Business-wise, the entertainment press had two stories dominate the news in the week of December 7th, one which matters and one which doesn’t. But first, our holdover article, with a key lesson.

The Most Important Story of the Week – Youtube Kills Original Programming

Or did they?

That’s a deliberately provocative headline not quite captured by, you know, the truth. But clicks, am I right?

In reality, Youtube is quietly pulling back from original programming. Or shifting their strategy to premiere originals on their ad-supported platform (just Youtube) instead of their subscription service. Along with this move will come a likely decrease in their overall spend and spend per show.

I don’t want to go overboard here. Like saying something like, “See all original programming is bad.” That sounds just silly on its face. Obviously, HBO was built by original programming. Actually, every broadcast channel was built by original programming. AMC and USA Network took leaps in popularity by leveraging original programming people liked. Netflix captured a lot of new subscribers with House of Cards.

But I do want to push back on what I see as the implicit assumption that “original programming = success”. Just making your own shows doesn’t give you a competitive advantage per se. It isn’t a panacea to all the problems ailing your business. This is another example of executives not being creative, but simply asking, “Well, what are they doing?”

That’s why I think economically-minded companies, like Youtube presumably, may pull back on original programming if it doesn’t work right away. Maybe they do have a flashy hit–like Cobra Kai–but the costs for that and the 10 to 12 other series may not cover their bills. In that case, you pivot away from original content. I’ve been bullish on Youtube for awhile, and I think the more they focus on Youtube and YoutubeTV, the better and more coherent their offering.

If you read Stratechery, you’ve seen Ben Thompson has his “aggregator theory” that I love. My only quibble is I’ve never understood why he applies this to Netflix as opposed to Youtube. (He actually does both.) Netflix is specifically not trying to aggregate it all, but Youtube is. If you have it all, you don’t need “just a little bit more”. You’ll get it eventually. And that shows why Youtube probably doesn’t need original programming.

Long Read of the Week – Youtube and The Pressure to Publish

While I’m on the Youtube train, I want to call out this article on Variety by Todd Spangler that has been sitting in my “to read” list for a while. I don’t have a ton of insight except that Youtube has problems that seem unique to it in the video world. Netflix is going to compete very traditionally with the big studio players by making big shows and streaming them. It’s just a different channel.

Youtube has to deal with, basically, it’s algorithm. The algorithm pushes people to extreme content. Or it burns out creators. Or it caters to children. Or it is addictive. It’s a fundamentally different problem that is both easier (fixing algorithms is easier than dealing with people) and harder (it cuts directly into revenue) to solve.

Other Contenders for Most Important Story – Technical Difficulties in PPV/Tiger and Phil Match

For those who don’t know, AT&T announced a giant pay per view golf match between Tiger Woods and Phil Mickelson. Since AT&T now owns Bleacher Report, they had the genius idea to have an option to purchase the event on BR too. Of course, the BR website crashed, so they offered it for free to customers, which bugged anyone who paid for it. So refunds were issued.

These refunds won’t bankrupt AT&T, and it looks like they’ll plow ahead with future PPVs in golf. Also, I don’t think this story portend some huge change for how we consume video content. So why was it almost the most important story of the week?

Because it provides such a great lesson on the relationship between “content” and “product”.

The lesson is one I’ve hit on a handful of times but will really emphasize going forward: product matters. Yes, content is king, but your product is right there. If the process to watch content is maddeningly difficult, then customer will find other ways or not watch. Content is king, but product may be the Queen. Or at least a rook.

Other Contender – Netflix keeps friends for $80 or $100 million, non-exclusively

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Most Important Story of the Week and Other Good Reads – 30 Nov 2018: Slight Tweaks to the Netflix Model

This week was a battle for the most important story between three related streaming stories. Who won? Well, Netflix, but not for the story you think.

Most Important Story – The First Netflix Original on Linear Broadcast

To steal from my own Twitter feed, Netflix is lauded as THE truly innovative company in entertainment. I read this all the time. And when they launched (ten years ago!) they really did change a lot of things: tons of episodes to watch on demand. All episodes released at once. Thousands of shows with scrolling. Recommendation algorithms. That really was a change in how the model worked.

Since then? Well, they’ve taken a lot of hard line stances:

– Never releasing originals in a week-to-week format.

– Never introducing live streams of shows.

– Never doing sports programming.

– Never releasing movies in theatrical windows.

– Never releasing original programming on linear or other platforms.

That’s a lot of “nevers” for a company that’s trying to be innovative. (In my head, I want to write a satirical HBR article called, “Innovation comes from Never”.) But it looks like the last two points may change, just very gradually. And not by Netflix’ choosing.

You probably missed this, but starting on this week, Bojack Horseman, the critically-acclaimed (?) Netflix original animated series is now airing on Comedy Central. The short explanation is that the distributor and production company retained linear rights after a hold back window for Netflix. So they sold it to the highest bidder.

Personally, I don’t mind this for Netflix. They don’t have a say either way, but they should really how premieres of existing shows off network help boost the ratings. Let me provide a personal anecdote to explain. I’ve wanted to watch The Magicians for a while now, but don’t currently have a Netflix subscription (we just weren’t using it). As a result, I never went over there to catch up on the previous seasons. So as each new season is released, I never bothered to catch up becuase Syfy never did a marathon of previous episodes to let me catch up.

But, for some reason, reruns of the season 1 recently appeared back on Syfy’s linear broadcast. Now my wife and I are debating turning Netflix on just for that show. (Or apparently the Syfy Now app has those episodes. We’ll see.) As a result, I may watch season 4 next season if I can catch up in time.

The point is that allowing sampling for bingeable shows will push people back to whoever has the most episodes. If you don’t have Netflix, then Bojack Horseman is dead to you…but for the people who just watch Comedy Central, they may get hooked and join. I’m sure there are other examples of streaming shows appearing on other platforms. I know HBO has put some of their very library shows into broadcast, and maybe some other Netflix originals appeared in other countries in different platforms. Either way, I’d say this is an experiment worth taking. Good luck Netflix, even if you didn’t want this.

Other Contenders for Most Important Story – WarnerMedia will have three tiers

I’m tempted to start this sub-section by blasting Warner Media and being as snarky as I can. It’s easy to make fun of them because they are doing something different, and different is easy to mock. The blink reaction I had was, “You’re going to try to go up against Netflix with three different, confusing price tiers? Really?”

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Most Important Story of the Week and Other Good Reads – 23 Nov 2018: Here Comes the Retailers

If you own a retail company, you know what you should do? Enter the TV business. In the glorious tradition of electric companies and liquor salesmen, now the big box and online retailers are entering the biz. Here come the retailers!

Other Contender for Most Important Story of the Week – Retailers Enter the Streaming Fray

When we think of strategy in the business context, we usually imagine an innovative business leader sitting down with his team, brainstorming plans, debating options and making a bold call. This sometimes happens in corporate America. The ur-example is Steve Jobs deciding to make the iPod and then the iPhone. Revolutionary!

You know what happens a lot though? (And isn’t the subject of books or HBR articles.) Instead of all that thinking, someone asks, “What are our competitors doing?” Then says, “Why don’t we do that too?” (Notably, the iPod followed the Zune and the iPhone followed the Blackberry. Apple just made both products much, much better.)

Disney launched the Marvel Cinematic Universe, and I’d call that a truly remarkable strategic initiative. Of course, Universal tried to launch a monsters-verse, Warners is trying to launch DC universe and a “big monsters”-verse, and Paramount even flirted with a GI Joe/Transformers universe. That’s not creative strategy, that’s copying.

Netflix decided to binge release all its shows. Amazon thought about going week to week, then said, “Nah, we’ll just follow Netflix’ lead.” Now lots of platforms are aping the binge-release model without understanding the strategic ramifications. Again, that’s not creative strategy, that’s copying.

Which brings us to retailers. Amazon sells lots of things, and at some point launched a video streaming service to help improve the Prime memberships and presumably sell more memberships. As a result, early this year there was news that Walmart would enter the fray to launch its own streaming service. (It had purchased Vudu, a transactional video-on-demand service earlier, so this was an evolution of the strategy.) Not to be left out, there are now rumors that Costco may also start its own streaming service. Can Target and eBay and Kroger and others be too far behind?

(The Ankler pointed me to the CNBC article from October which inspired this section. This isn’t exactly breaking news, but a topic I wanted to cover nonetheless.)

The Costco news has been generally overhyped. They haven’t actually announced a streaming service and it seems very clear their goal is to partner with a streaming platform to offer it for free to their customers as a bonus for renewing. Then they get all the benefits of a streaming platform without having to do the work. (And don’t neglect the work all you aspiring streamers. If you have a sub-par product from a user experience, customers won’t use it. Netflix has usually excelled in this area, until autoplay trailers started.)

But guess what? They haven’t actually announced a partnership and it seems like negotiations stalled with the potential streamers. And I think I know why: Costco realized that offering a ten dollar a month streaming service won’t actually help boost the amount of memberships they sell. Getting people to pay $100 a year for a membership is great because they buy tons of stuff at your locations, and pay you for the privilege. But if you give all that away in costs for streaming–that your customers may not even use–well you lost all your revenue. Even at a discounted price, the economics are really tough. Walmart is likely realizing this too.

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Most Important Story of the Week and Other Good Reads – 16 November 2018: Goodbye to FilmStruck

The streaming wheel keeps spinning. More and more companies want to join the future of entertainment and release their shows on-demand. Yet, what intrigued me most was one of those massive conglomerates not announcing new businesses, but shuttering old ones.

Most Important Story of the Week – WarnerMedia shut down FilmStruck

Wait, did Warner Media just close FilmStruck? Did it really close DramaFever? What’s going on?

(Punctuation aside: in the age of digital websites, I never know if names of companies are one word or two. According to Wikipedia, both of these companies are joined words.)

As I mentioned in my article on the very vague announcement by AT&T/Warner Media, this generally augurs a smarter strategy by AT&T/Warner Media (a name I hate typing because it doesn’t make sense). Here’s the list of at least 13 streaming services currently run or planning to launch by the conglomerate: WarnerTBD, DirecTVNow, HBONow, Boomerang, DCU Streaming Something, Machinima, Uninterrupted, VRV, Stage 13, Ellen Digital Ventures, CrunchyRoll, FullScreen, Rooster Teeth and I’m sure there are more. And get this: Turner (with CNN, TNT, TBS and the NBA channel) has its own set of digital initiatives.

How did Warner and AT&T manage to launch so many simultaneously? And all for different price points? (Though, Otter Media did launch VRV to make one price point for multiple streaming options.) Warner Bros. and AT&T separately tried to launch streaming services, they just took a wildly different path than Netflix, Amazon and others by trying to micro-target a lot of these streaming services.

Now that they’re together under one roof, they’re consolidating. This is natural; as part of a “micro-target” strategy, though, if something doesn’t work you need to pull the plug. Closing down the least successful options should make sense if they weren’t profitable–but as long as the next step also makes sense: which is continuing to consolidate all the brands under one roof. There are two really compelling reasons to do this. First, recreating the bundle is ultimately what customers want. Sure, you may not like the idea of paying for ESPN if you don’t watch sports, but many viewers don’t want to pay for your Bravo or Syfy or History Channel fix either. The bundle ultimately spreads the wealth; everyone suffers and wins together.

More importantly, Netflix set that expectation for consumers. When I’ve spoken with legacy media companies, they’ve always insisted that they just can’t lose money the way Netflix does. Fair enough, but customers expect a product like that. Charging $3 a month for access to only cartoons or only DC, when Netflix charges just $11 for both superheroes and cartoons and sitcoms, well what would you rather buy? You may not like that Netflix has set unrealistic expectations, but there you have it.

2019 will be fun to see how these different strategies finally collide.

Side Note: Really DramaFever is closed? This is one of those companies that two years ago seemed like the “hot new thing”. But like many things that are reported in the growth phase and ignored in the death phase, seems to not quite have matched the hype of its initial growth.

Side side note: Just because Netflix and Amazon Prime/Video/Studios have a “big tent” approaches doesn’t mean that they aren’t losing the equivalent amount of money on their international programming. Essentially, snapping up a bunch of international originals from Japan to Korea to Latin America–which both have done–is the same thing as launching your own channel, you just cover the costs in the upfront fee. The key becomes “allocation”. How much of an original productions costs are allocated to the US, UK, EU and other foreign territories versus the country of origin? If it’s a lot–and from Netflix and Amazon’s statements this seems to be true–and no one tunes in, well you’re losing money on those bets, even if shareholders can’t see those losses. But if they are over-indexing in viewers globally, they could be making money. At the end of the day we don’t know enough to say, but it is a risk.

Context Update – WeWork is Too Big To Fail…Who Else is?

This is a new feature for me: the context update. I’ve been seeing a lot of general economic stories that had me thinking. Stories about a possible recession, about a possible stock market crash, and about the debt markets. Just last week, I had an update on how the election could impact regulation of media & entertainment. So in addition to strategic moves, it felt right to regularly make room from “context” updates, stories I want to call out because I think they could change the context in which we conduct the business of entertainment.

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Most Important Story of the Week and Other Good Reads – 9 November 2018: How the Elections Could Impact Hollywood

Over the last few weeks, there were big stories (elections), tragic stories (devastating forest fires in the southland), and heart-breaking stories (the shooting in Thousand Oaks). So many stories that it gets hard to stay focused on the business of media and entertainment. So a few days/weeks late, here is my round up of stories I’ve been following. I won’t touch the personal tragedies as they’ve been covered better by other news outlets.

I struggled to call out a “most important” story, with the election gobbling up media coverage. So you know what…

Most Important Story of the Weeks – How the Election Could Change Regulation

As everyone knows, Democrats took control of the House of Representatives while Republicans held onto the Senate in the American elections of last week. (Then came a bunch of other political news. If you follow most entertainment journalists on Twitter, you don’t need me to repeat it for you.)

The key is the ramifications for business. First, what I don’t think will happen. I don’t think there will be a sudden wave of anti-trust regulation. I don’t think there will be a wave of pro-consumer legislation like finally addressing the United States unwieldy IP/patent/copyright law. The Democrats only control one branch of the Federal government, and will still battle a hostile Senate and hostile President Trump to pass any new legislation. Betting on the status quo is always a good bet in our current political climate.

What could happen? Well, caution in rolling back some regulations. The chairman of the FCC, Ajit Pai may be just a little be more worried than before the election about his agenda of wholesale deregulation of media & entertainment. (In fact, he’d already blocked one merger in the broadcast space.) Under threat of testifying on the hill multiple times, he may dial back a few of his more controversial proposals. With their newfound agency, Democrats could tie some consumer-protection measures to budget bills, such as support of municipal broadband or, gasp, net neutrality. Again, I’m skeptical but they could try. Also, as Variety noted here, Hollywood could pressure Democrats to put pressure on tech giants to fight piracy. Again, could, but likely no bills will result.

Then you have the wildcards. Not saying they will happen–I mean, is a wildcard a 10% or less probability?–but I’m thinking about them. My first wildcard is President Trump going crazy with antitrust legislation on his enemies: AT&T/Warner (cause CNN), Comcast (cause MSNBC) and Amazon (cause Jeff Bezos). I think he isn’t focused enough to follow through, but wouldn’t bet against him, especially if his new Attorney General sticks in the role. At the local level, I’d look at “municipal broadband”. Since everyone hates their cable providers, with lots of new Democratic gains in state houses, more states and cities could try their hands at alternatives to traditional cable companies.

The final wildcard would be legislation that finally addresses robocalls. Any politician who stopped all the annoying phone calls would become a hero to consumers. (That’s a hint for politicians already thinking about 2020.)

Other Contender for Most Important Story – BlumHouse Does it Again

Another horror film by Jason Blum, another box office smash. (Current numbers are $76 million opening weekend and $151 domestic box office to date.) That said, this one feels a bit more expensive production-wise (Jamie Lee Curtis, Halloween franchise owners) than past BlumHouse super hits. Still, he’ll definitely make his money back. Again. (Blum was rightfully feted in THR in a good read.)

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Most Important Story of the Week and Other Good Reads – 26 October 2018

The last two weeks have featured key new moves in the multi-dimensional chess match that is the future of TV viewing. (For some of my thoughts in general, check out my NBA-to-entertainment translator where I throw a lot of fun analogies out about old and new media.)

Most Important Story of the Week – AT&T/WarnerMedia Enters the Streaming Fray

Well, AT&T had already entered the fray. They just have a new plan.

Warner Media and AT&T both had their own “OTT” options for the consumers of the world. AT&T owns DirecTV Now, a “skinny bundle” of TV channels, and had a stake in Otter Media, which owns SVOD channels such as Crunchy Roll, Full Screen, and Hello Sunshine. These rolled up into VRV, a larger subscription bundle.

WarnerMedia had its own “digital networks” group that offered subscriptions to Boomerang–featuring cartoons owned by Turner such as Looney Tunes and Hanna Barbera cartoons–DramaFever–Korean dramas–and a soon-to-be-launched DC Universe streaming service. And HBO owns HBO Now. So both companies had played in the “SVOD” or “OTT” universe.

Just not very well.

The announcement–like the “DisneyFlix” announcement before it–was pretty sparse on details. Here’s what we know: in Q4 of 2019 AT&T/WarnerMedia will launch something. The assumption from many people is that AT&T/WarnerMedia’s offering will ultimately be more like a much larger OTT: there is a base bundle, but then multiple options to add on top. This would be similar to Amazon Prime/Video/Studios approach with its “Amazon Channels” business.

Let’s do good and bad of this vague announcement:

The good: The content offering could be compelling…

I mean, it’s basically a cable package, if Turner gets brought in. TNT for drama, TBS for comedies, Cartoon Network for kids, HBO for prestige viewing, CNN for news and Warner Bros. for movies. Make that as the base with other channels as OTT add-ons, and you may have something.

The good: with a much more coherent price offering.

When I first heard about Boomerang, I could never quite believe what I read. “So you’re offering me a lot of cartoons for $4.99 a month? But Netflix is just $10 a month. Are those cartoons worth 50% of that price?”

Not really. If anyone can get away with that, well it’s Disney. Given that they have the top, in demand movies, they can charge a premium when they launch their platform (and will hurt Netflix in the process). Everyone else needs to offer a large bundle that mimics Netflix prices (and cash losses). The reason Warner Media didn’t offer that before is simple: they couldn’t afford it. Netflix can’t really “afford” it either, from a cash perspective (they just took on $2 billion more in debt). But they can lose money and watch their stock go up; formerly Time Warner couldn’t.

The bad: Do consumers want one bundle, or do they want four different bundles?

Do you buy the whole AT&T bundle, or buy that and Disney and Netflix and CBS Now? And if the prices go up on all of those, do you end up paying $100 for internet, and now $80 for OTT, meaning you’re paying more than you do now for internet and cable, just with way less viewing options? That’s bad for customers. (And a prediction I want to look into. I’m not bullish on customer benefit in a future of greater industry consolidation.)

The unknown: Will AT&T/Warner Media stop selling bad OTT services?

From what I understand, the DC streaming platform–that I guess will launch with a per month price of 20-40% of a Netflix subscription–will still launch. That just seems like a bad business model. At the same time, since acquisition, AT&T shuttered other digital platforms like DramaFever and Super Deluxe. So we’ll see. Maybe they’ve learned their lesson, but I’m skeptical.

Other Contender for Most Important Story – SnapChat Launches Originals

I don’t think that social platforms are good for video.

Phew, glad to get that off my chest.

Let’s explain. I’m a big believer in understanding the problem your company is trying to solve, and delivering solutions to that problem. I haven’t written about the “Marketing Framework” (3Cs-STP-4Ps) yet, but I love to use it to analyze business problems. The key insight of the framework is to align all parts of the product with the solution to the problem.

With social platforms, producing “original video” fundamentally misunderstands the core problem these social networks set out ot solve. Twitter connects normal people to the thoughts of other famous people and their friends. Facebook connects social networks online. Instagram is flashy fun images of famous people and your friends.

Video can help that. Hypothetically, people want to see Instagram videos from celebrities. They want to see videos of kids (they know) blowing out candles on a birthday cake. Those reinforce the core solution to the initial problem.

Notice, I never said those platforms were about sitting back and watching entertaining TV shows and movies. Yes, video from famous people or friends is a part of those social networks, but the problem being solved isn’t wanting to watch long-form (or even short form) video. Specific other apps are optimized to do that and do it better. (And even with the rise of mobile viewing, mobile viewing, phone or tablet, is inferior to the living room experience.)

So welcome to the originals game SnapChat. I think you are trying to inject original video production to solve a problem your customers don’t want solved.

Other Contender for Most Important Story – Annapurna Films Struggles

I considered the news that Megan Ellison’s Annapurna films is (allegedly) in chaos, then (allegedly) not in chaos as my most important story, but there wasn’t enough there there to write it out. But still…

A few months back, I wrote about the fall of Global Road, comparing its performance to STX Entertainment, which felt really similar to me. Well, I could have thrown in Annapurna Films, which I didn’t. In a lot of ways, they’re suffering from the same fate as their predecessor: launching a standalone studio in the age of monopolistic super-conglomerates is tough. In my defense for ignoring Annapurna, until recently they weren’t in the distribution business, sticking to producing films.

I’d add one other point I haven’t really emphasized enough: streaming is my theory for why so many new studios popped up since the financial crisis. (My count? Relativity, Global Road, STX Entertainment, Annapurna Films, and A24, at least.) What fueled this mini-boom was the rise of licensing of movies. Basically, if Amazon or Netflix will pay your production costs in a film output deal–which they may do on a global basis in some cases–then you can make money if you have just one hit at the box office.

I’ll also add that Annapurna plays (mainly) in an even trickier world: prestige films. If you don’t deliver your Best Picture Oscar film each year, then you can lose a lot of money. Initially, Annapurna didn’t have a problem there. Recently, though, they have. That’s also basically the life story of Miramax and The Weinstein Company, that always struggled financially year to year.

Long Read – Streaming Arms Race May Make Cable Look Like a Deal

This is a good summary of the streaming landscape now that AT&T has entered the fray, but I’d really point out they make the same point I do: at some point having a cable bundle may offer more content then all the OTT services put together. I’d add this is doubly so if: 1. SVODs raise their prices or 2. SVOD’s restrict sharing of passwords.

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

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

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

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

The Instagram founders are out!

Kathleen Kennedy is staying!

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

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

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

Instagram Founders – Departing

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

Kathleen Kennedy – Renewing

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

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

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

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

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

All the Broadcast TV people – Hirings, Firings and Departings

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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