Weekly Roundup: Only 10% of us are satisfied with content recommendations

Every week, I diligently curate the most pivotal news, insights, and analysis in the FAST-paced streaming industry (pun intended). You can get content 4 days earlier plus additional insights, job postings, and other random fun things by subscribing to the free weekly email here.

In today’s edition:

• The DOJ has initiated an antitrust lawsuit against Apple
• Paramount’s not convinced on Apollo’s $11 billion bid
• Americans are spending $61 per month on streaming services
• Only 10% of us are completely satisfied with content recommendations
• The U.S. will have 129.6m internet households by 2029, over 92% of all homes

FROM THE FRONTLINES

The Department of Justice has initiated an antitrust lawsuit against Apple, accusing it of monopolizing the smartphone market through its stringent control over the app ecosystem. The DOJ argues that Apple's practices, such as enforcing fees on in-app purchases and imposing restrictive app functionalities, limit competition and innovation and lead to higher prices for consumers. This lawsuit has significant implications for media companies, which have devised strategies to circumvent Apple's in-app purchase system to avoid substantial fees, impacting their revenue and customer engagement. A favorable outcome from this lawsuit could dismantle some of Apple's restrictive practices, fostering a more competitive market. This could lower operational costs for streaming companies on iOS platforms, enhance consumer choice, and lead to more equitable pricing in the digital content distribution landscape. Link

SAG-AFTRA is currently in a standoff with video game companies over contract negotiations, primarily concerning the ethical use of generative AI in games. Despite a 98% member vote in favor of strike authorization last fall, the union hopes to avoid a work stoppage, emphasizing the widespread impact such action would have. Duncan Crabtree-Ireland, SAG-AFTRA's chief negotiator, stresses the need for comprehensive AI protections for all performers, pointing out the potential backlash from consumers over selective protections. While no strike timeline is set, the possibility of Hollywood studios influencing their gaming counterparts for a fair deal is highlighted, especially given the increasing crossover of video game IPs into film and TV content. Amid these tensions, SAG-AFTRA supports the burgeoning movement among game developers towards unionization, recognizing the need for workers to have a say in crucial aspects of their employment to ensure sustainable careers. Link

Apollo Global Management proposed an $11 billion bid for Paramount Pictures and Paramount TV studios, excluding CBS, cable networks, and streaming services. Despite the offer exceeding Paramount Global's market cap, Shari Redstone, president of National Amusements Inc. and controlling shareholder, remains unconvinced, favoring ongoing negotiations to merge with Skydance Media. Analysts suggest that selling Paramount in pieces could harm shareholder value, highlighting the interconnectivity of its film, TV, and streaming assets. The future of Paramount remains a focal point of M&A speculation. Link

Paramount+ is expanding its Basic (with ads) tier to Canada in April and Australia in June, marking a significant step in its global reach. The streaming service is also launching its premium subscription tier in Europe, beginning with France this month. This move is one of Paramount Global's major international developments, following its decision to scale back on original content plans outside its free-to-air networks in select countries. Link

Curiosity Stream reported a revenue decline to $56.9 million in 2023, marking a 27% decrease from the previous year's $78 million. Despite this, the company saw a reduction in its operating loss to $48.9 million and a 67% decrease in its Q4 2023 loss year-over-year. Strategic initiatives such as renewed distribution deals, price adjustments, and content package realignments contributed to this improvement. Furthermore, Curiosity Stream is leveraging AI and machine learning for efficiency gains in marketing, content editing, and customer support, aiming to enhance operational efficiency and content delivery globally. Link

Peacock is enhancing its service with new features like Multiview capabilities, debuting during the 2024 Olympics with plans to expand to other live programming. These updates aim to improve engagement by offering interactive viewing experiences, including dedicated hubs for nearly 40 sports and an interactive schedule. Multiview will allow viewers to watch up to four events at once, guided by Olympic experts, and include pre-selected groupings such as Team USA or trending events. Beyond the Olympics, Peacock plans to test Multiview on other events, like golf, and potentially expand it to various live programming. The Live Actions feature will also enable deeper viewer interaction with events, allowing for personalized viewing choices. These innovations are part of Peacock's broader strategy to enhance the UX and increase engagement. Link

INDUSTRY INSIGHTS

Leichtman Research Group found that Netflix's efforts to stop account sharing are working, with the rate of shared U.S. accounts dropping from 15% in 2022 to just 10%. Their report shows a broader decrease in shared DTC services, now at 10% compared to last year's 12%, and an increase in accounts not shared outside the household, from 68% to 73%. Sharing is notably, and unsurprisingly, higher among younger folks.”Why I oughta!” Link

Deloitte's Digital Media Trends report reveals that American households subscribing to streaming video services now spend an average of $61 per month for four services, a 27% increase from the previous year's $48. This cost rise pushes consumer tolerance, with 36% of respondents feeling that the content doesn't justify the expense. Additionally, the report suggests a potential tipping point for subscription prices, as nearly half (48%) of those surveyed would consider canceling their favorite service if the monthly fee increased by just $5. Link

Hub Entertainment Research reveals that only 10% of consumers express complete satisfaction with the content recommendations offered by their streaming services. This indicates a notable shortfall in content discovery. Link

Antenna's latest findings underscore that customers who maintain their subscription to streaming services for a year exhibit a significantly higher propensity to remain loyal over the long haul. Link

HarrisX, in an exclusive poll for IndieWire, discovered that 34 percent of U.S. adults favor watching movies in theaters. This implies two-thirds of respondents prefer to await their release on streaming platforms. Link

According to Parks Associates, the United States will have 129.6 million internet households by 2029, representing over 92% of all homes. Link

CNBC looks at ESPN's strategy to navigate pay TV’s decline, including the challenges of decreasing cable subscriptions and the company’s approach to digital transformation. Historically reliant on escalating cable fees, ESPN confronts a changing media environment. While Chairman Jimmy Pitaro acknowledges the industry's digital shift, former executives caution about potential hurdles on ESPN's journey forward. Link

Almost everyone in Hollywood wants to get back to work. So what's taking so long?" The LA Times cites the aftereffects of last year's strikes, the industry's cautious approach post-streaming wars, and higher costs associated with filming in California. These factors have led to a decrease in major productions in the state, impacting a wide range of employment and businesses reliant on the entertainment sector. Link

India's OTT Video market is on track to hit $4 billion in revenue this year (per Statista), with projections reaching $5.81 billion by 2029. Prime Video's Kelly Day and Gaurav Gandhi highlighted India's crucial role in Amazon's global strategy, noting its significant subscriber growth. With a focus on the young adult demographic, Prime Video is introducing nearly 70 new films and shows for Indian audiences. Mike Hopkins emphasized India's high Prime to Prime Video conversion rate, making it a key market for Amazon's international expansion, aiming to secure the next 250 million subscribers primarily from outside the U.S. Link | Link

JB Perrette, Warner Bros. Discovery's global streaming head, detailed Max's upcoming European launch, starting in the Nordics, Iberia, and Central and Eastern Europe, with France and other countries to follow. Aiming for profitable growth, Perrette highlighted Max's successful pivot from a subscriber-focused to a profitability-focused strategy in the U.S. With Max yet to enter major European and Asian markets, its European rollout marks a significant phase in WBD's global expansion. Link

But wait, there’s more:

• Why Amazon is bringing Twitch’s most lucrative parts deeper into the Amazon Ads fold. Link
• Streaming Surges On, But Smart TV App Usage Plateaus. Link
• CTV Accounted for More than Half of Video Ad Impressions in 2023 according to Innovid. Link
• Why Spotify Keeps Trying To Get "Radio" Right. Link

ICYMI

Fox and Netflix collaborated on an ad experiment this past NFL season, where they aired a two-minute segment featuring Julian Edelman and Zack Snyder discussing Snyder's Netflix film "Rebel Moon." However, unlike traditional ads measured by audience size, the social media engagement it generated gauged this ad's success. The partnership, facilitated by Netflix's media buying agency Mediahub, aimed to explore alternative metrics for ad performance, focusing on social interactions rather than viewer numbers. This move reflects a broader industry trend towards outcomes over impressions. The experiment, which saw four times the expected social interaction, may pave the way for more ads evaluated by their ability to generate buzz rather than just reach a large audience. Link

TelevisaUnivision's ViX is launching six new original shows in Q1, including a comedy with Spain's The Mediapro Studio. This lineup showcases the platform's range in genres and storytelling. With over 7 million subscribers and $700 million in revenue in 2023, ViX continues to grow despite facing industry-wide challenges like competitive pressures and rising costs, leading to reduced production budgets. ViX, which emerged from the Televisa and Univision merger, offers both ad-supported and premium subscription services, featuring over 75,000 hours of content, including original shows and a significant library from both companies, alongside 7,000 hours of live sports. Link

The NBA launched an in-app betting feature, emBet, in the League Pass app through a partnership with Sportradar, enabling fans to place bets via FanDuel or DraftKings. This initiative started in October, aims to merge viewing and betting for an enhanced fan experience, with options for money line, point spread, and game total odds. While bets aren't placed directly within the League Pass app, users are redirected to the respective betting app to complete their wagers. This move mirrors a growing trend in digital sports platforms embracing live betting to boost engagement, where betting is legal. Link BBC Studios and BBC News launched a redesigned BBC.com and a new BBC app globally, enhancing user experience with a fresh design and broader content. Despite the ambition, the BBC News app faced criticism for seeming rushed and under-tested, reflected in a 2-star average rating in the App Store. Critics pointed out bugs and unrefined features, suggesting more development is needed. However, the potential for improvement remains, and further updates could address these initial shortcomings. This launch is part of BBC's effort to widen its global digital footprint and offer a more integrated content experience. Link

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