Category: streaming content

Entertainment and the Fickle Finger of Fate

There has been much hand-wringing over the anemic box office this summer, with receipts near record lows.  This article spells out some of the reasons for why this might be happening, but the last line reveals what most in Hollywood already know:

“The New Hollywood of the ’70s begat the blockbuster age begat the indie rebels of the ’90s begat the superhero globalization of this century. This summer in Hollywood—by turns crass and inspiring, confounding and crystal clear—could trigger a new era. But more likely, it’s business as usual.”

In other words, it reflects the quote that I first read in William Goldman’s Adventures in the Screen Trade, which says that “nobody knows anything.” And when you see the quote in its entirety, it becomes obvious how it applies to entertainment in general, and filmmaking specifically:

“Nobody knows anything. Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess — and, if you’re lucky, an educated one.”

I read Goldman’s book before I even moved to Los Angeles, and find myself constantly advising people to read it. I’ve even mentioned it on this blog before. And that’s because it’s a lesson that people need to relearn every few years. The advent of new means of distribution is good news to many in Hollywood, but one bad summer does not a paradigm shift make.

The industry has weathered new technology before. Theater survived the emergence of radio and film, just as they survived television’s rise. Books are still around, and a good storyteller can make a living on podcasts or live events. The core of  entertainment is conveying a narrative that captures the zeitgeist of the moment, and we are in an era of new politics and uncertain times.

What will be the next trend? Well, who knows? If anyone did – with certainty – then they’ll likely get very rich. But we know that’s impossible, so just roll the dice and go with your gut. Just remember this other quote:

“Ambition drives you on, ability certainly helps, but the fickle finger of fate and luck are great things.”

As for that fickle finger, I will never forget when I was going out with a fantastic action thriller set aboard a hijacked airliner… then 9/11 happened. You just never know.

Good luck!

Apple’s missteps and future

I’ll admit to feeling a certain sense of vindication when I read this recent column on Bloomberg Businessweek about the sorry state of Apple’s TV initiatives (or lack thereof):

“After 10 years, Apple TV is pretty much the same. Meanwhile Amazon, Google and others are leading the way in revamping how people interact with TV sets by speaking to them or mixing live television programs with libraries of older shows and movies.”

Ever since it became apparent to me that digital delivery of TV programming was the inevitable future of distribution, I have thought it was a nearly-perfect fit for Apple to purchase Sony. It would deliver them a source of IP that spanned from videogames and music to television and film content, as well as the know-how to produce new material.

In the mid-2000s (like now), Apple was flush with cash and should have spent a chunk of it to acquire Sony, which to this day, still struggles with its own line of businesses, from the Vaio to the Walkman to the Betamax. Even their vaunted televisions are now second-banana to upstarts like Vizio.

Granted, I may be overstating the predicament that Apple finds itself, but it seems to be strategically challenged in the arena of digital content delivery, especially with regard to streaming video. A purchase like Sony would be a bold statement from this parent of the smartphone to enter the next phase of innovation.

In fact, I suspect (hope?) they’re working on the next entrant to the home digital assistant market. Will Siri’s home-based device – whatever that may be – serve as a viable and successful challenge to the likes of Alexis, OK Google, Cortana and Bixby? I won’t hold my breath, but hope springs eternal, right?

 

How sports rule the media world…

I’ve commented on this many times before, but with March Madness almost concluded – and being a graduate of two ACC schools – this article simply reinforces what I’ve been saying time and again. If you need advertisers, and said advertisers don’t want viewers skipping their ads, then sports seem to be the best cure-all for that.

Of course, this is no secret, and the leagues know that. Disney, which owns ESPN, has been feeling the pinch of greater competition and, in turn, higher programming costs. Disney’s stock price peaked in 2015, and pressure from the likes of Facebook, Twitter and even Snapchat has been driving sports programming costs up. Here’s one example of that.

With the advent of so-called “e-sports,” other digital players are seeking out new area’s that will eventually compete with legacy sports. Here, you can read about YouTube’s investment in this new arena, following the lead of singular startups like PewDiePie (which is an incredible story in and of itself). Perhaps we should have seen this coming when watching people play high-stakes poker entered the scene a few years ago.

Granted, the very definition of sports is in flux right now, but it is clear that the drive for viewers that won’t skip commercials are in great demand, and unless we are prepared for a completely ala carte world of consuming content – and that doesn’t seem realistic – we must prepare and predict the future of sports programming.

Two tales of sports domination

As television continues to splinter, with more entrants into the fray on a regular basis (see YouTube TV), what is becoming clear is the struggle of broadcast networks to maintain a hold on their traditional audiences. And the power of popular sports to attract viewers that will sit through advertising is almost unquestionable. There are two recent articles in Ad Age that echo this sentiment.

First, in this article about the IPO of Snapchat (aka, Snap) makes clear that their dependence on sports programming is a paramount concern. The revenue stream depends almost solely on advertisers, and Snapchat has devised a way to make it a preferred source for watching sports.

“In many ways, the NFL is the quintessential example of Snapchat’s dream of becoming the next TV — top media partners producing original content and selling that to advertisers in upfront multimillion-dollar deals.”

For broadcasters, the news just keeps getting worse. As this other article mentions, every traditional broadcast network has seen a decline in viewership, with the sole exception of Fox. And in their case, this is revealed:

“Pull sports out of the mix and Fox’s ratings struggles become even more self-evident.”

So, what does all this mean? It’s not entirely surprising, and with digital platforms like Twitter and Facebook, as well as mobile providers like Verizon, all trying to get a piece of the sports action, it is no wonder that Disney stock is suffering mainly due to ESPN, which must now face higher license fees for sports because of the competitive bidding.

The real winners continue to be the owners, and I expect the players will also get a taste. The question becomes, what sport will emerge as demand for programming grows? UFC? Drone racing? Spelling bees? One can only speculate…

Where is this all heading?

I’ve been watching with deep interest the progress of various video platforms as they emerge and develop, from YouTube and Netflix to Twitter and DirecTV Now. Here’s a brief rundown of a few of them from eMarketer that should give you an appreciation for the current state of flux, as well as the huge potential for coming disruption in the marketplace.

It seems that first we had simple websites that provided a platform, notably YouTube and Vimeo. Then we saw the TV Everywhere approach from HBO Now, as well as non-cable providers like Netflix, Hulu and Amazon. There’s a move to applications that can provide video content, from sports leagues to Twitter and Facebook. But it is such a tangled web that there is no clear indication as to where it will all shake out.

I suspect that a combination of advertising strength with high-demand content will drive this initially. Those platforms with which advertisers are comfortable (YouTube, Facebook, etc.), and content that is both timely and popular (primarily sports), will be the leaders in the transition that is currently underway. This is a chapter that is very much being written, and companies will rise and fall depending on their ability to forecast and anticipate the trends. But this much continues to be clear: Those who control the rights to this content (sports, awards) will control much of the destiny, and those who must pay for licensing  those rights will face increased price pressure in the coming days (witness ESPN’s effect on Disney stock).

Discuss…

That didn’t take long…

emerge JPEG logo - from Sulmonetti

As I mentioned in my most recent post, the merging of entertainment with devices really signaled the arrival of the digital era, epitomized by the iPod and iPhone. Now, this article just landed, detailing how Sony and the Playstation have been working on getting back into the streaming media mix.

As Variety reports, HBO Now will now be available on the Playstation. I’d be very interested to hear more about the financial arrangement behind this, but if you’re going to be in the console game, you’re going to need content.

This is what e-merge is all about!

When I first devised the concept of e-merge Media (back in 2003!), my thought was that the landscape of entertainment would be forever changed by the adoption of digital media. We see it on our mobile devices everyday, and now there is increasing convergence of media devices with entertainment. Apple was the first with its wildly popular merging of iTunes with the iPod and, eventually, iPhone.

Today, we are seeing Amazon, initially a online retailer, using music again to promote a tech device. In this case, its Echo. It already has experience with the Kindle and ebooks, but this now puts it squarely in competition with Apple, Spotify and Pandora. But this poses a larger question…

Will it become necessary for device makers to create (or own) the content it provides? Microsoft tried it with the Xbox, and Sony tried it with the Playstation, but each has had varying degrees of success, and the outlook is still hazy.

I will be watching very carefully to see what happens with Verizon and Yahoo! I will also see what develops with AT&T and DirecTV. Now that Netflix is enjoying success with its original programming, and previous suppliers becoming reluctant to sell to a direct competitor, will the it become a takeover target for a television manufacturer or wireless provider?

I am very excited about the prospects of this merging of entertainment with technology… and I humbly (or not) say that i saw it coming way back in 2003.

All hail e-merge Media!

The shake-and-bake state of the media landscape…

Increasingly, the means of digital content distribution are being revised, altered and shuffled. As this article reports, cable providers are facing reductions in subscribers, and the outlook is not good. So what does this indicate?

It seems that, with every passing day, there is another video platform, phone app, or HDMI plug-in device that promise to wean you off of the exorbitant cable fees that you pay every month. First, it was telecoms, then it was Netflix, Hulu and Amazon, then it was the Roku stick and Chromecast. We are seeing a rapid fragmentation of how we receive video content, and that bodes ill for the traditional distributors.

A few things have transpired recently that hammer this point home. AT&T acquiring DirecTV, ESPN being a drag on Disney stock, Netflix and others producing more original content, and Twitter getting into a content deal with the NBA. This doesn’t even take into consideration the growing popularity of live-streaming, altered-reality gaming, and real virtual reality. As old-timers like myself become less important to the subscriber bases of legacy providers, and advertisers scramble to reach the youth demographic, money and eyeballs will migrate to new means of content delivery.

This is just the end of the beginning, if that. Things are moving very fast in this segment of the media, and a new, transformational technology is likely just around the corner. For now, I’ll go back to my DirecTV and watch some reruns…

One look at the future of digital media… on the sports page!

Being an almost-native Los Angeleno, I have adopted the Los Angeles Clippers as my hometown NBA team (sorry, Lakers). But in this LA Times article from the sports section of the newspaper, I was genuinely surprised to read about their negotiations and plans for airing/streaming their games in upcoming seasons. Their contract with Fox Sports has come to an end, and the new landscape of mobile viewing, digital streaming, and augmented screens have made it potentially much more complicated than in days past.

You really should read the article closely for mention of these considerations, but here is an excerpt which exemplifies the nature of what is involved:

Another possibility would be video streaming the game and the analytical data individually. A third alternative would be integrating the data onto the screen as part of the game feed.

What is conspicuously absent is any mention of virtual reality, which in light of recent acquisitions and investments, lead me to believe will be coming sooner than most expect. And if Time Warner’s awful experience with exclusive deals for both the Dodgers and the Lakers is any indication, I would expect all parties to be very sensitive about unnecessarily restricting viewership.

Finally, the quote I found particularly intriguing is this:

The content for the streaming feed would be produced independent of Fox through a third party.

It’s been my opinion that it was just a matter of time before the professional sports leagues and their owners realized that their share of the advertising revenue would increase substantially if they could provide it without the aid of a middle man. With companies like Facebook and Twitter providing live streaming, the necessity of a Fox or Time Warner falls to the wayside. Granted, at this late stage before the start of the 2016-17 season, it probably doesn’t make sense, but it is most certainly on the horizon.

In fact, the bigger question is whether the leagues themselves, or the owners individually, will become the producers and distributors of games and data. This explains much of the recent stock woes of Disney, which owns ESPN. Stay tuned.

AMC’s chief has it right

I’ve been posting about the relative value of content and its place in the financial landscape of streaming media. One revealing interview was on Charlie Rose a few weeks ago with the president of AMC Networks, Josh Sapan. It is well worth a listen, but it also leads into this particular post.

In a recent interview with MultiChannel News, Sapan expounds on the pricing strategy for the likes of AMC, IFC, WeTV, Sundance and BBC America. It is the age-old adage about supply and demand, and said demand it a function of its importance to the other programs out in the programming universe. He puts it simply:

“We take some comfort in that we have shows that are very important to some people,” he added. “If I was a video retailer I would pay a lot of attention to that.”

Pricing to what the market will bear is standard operating procedure for entertainment, and the article also has some interesting numbers that reveal the perceived value of some channels:

“…affiliate fees range from 13 cents per subscriber per month for WeTV to 40 cents per subscriber per month for AMC. That stacks up against monthly charges of more than $6 per month per subscriber for ESPN and $1.60 for TNT.”

As a dedicated “The Walking Dead” fan – and based on the fan chatter in cyberspace – I suspect AMC may be underselling its channel, but I grant that I am biased. Still, it is an important peek into how cable suppliers look at the popularity of a given channel and decide what the market will bear. It also points to the promise and peril of sports programming. As ESPN can really only license a sports program, they will never have the leverage needed to avoid a bidding war over and given league.

And that’s why owning  content is so crucial in the evolving media landscape.