Weekly Roundup: Whoever controls the OS, controls their destiny

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:

• Roku explores pause ads on non-Roku devices and partners with the NBA on a FAST channel.
• Bob Iger wins proxy fight and unveils ESPN streaming launch.
• YouTube to become the #1 live TV provider?
• A look at how many subscribers each streaming service has.
• Measurement companies ramp up big data initiatives.

FROM THE FRONTLINES

Roku is considering integrating ads during pauses on its TVs, even when users are engaged with third-party (non-Roku) devices like game consoles or Apple TVs. A recent patent filing, discovered by Janko Roettgers, reveals Roku's intent to capitalize on inactivity periods by showing targeted ads. This approach, which is a straight boss move btw, addresses Roku's challenge of losing advertising opportunities when users switch to external devices via HDMI, a gap the patent aims to bridge by monitoring video and audio signals for pauses. Despite no confirmation of this from Roku, this strategy underscores the company’s shift towards revenue from ads and services, which is especially vital as the company reported a $44 million loss on device sales in 2023 but gained nearly $1.6 billion in gross profit from ads and services. This is exactly why whoever controls the OS, controls their destiny. Link

Roku has partnered with the NBA on a new FAST channel, “NBA Zone,” on The Roku Channel, featuring highlights, game re-airs, and NBA content. This collaboration also exclusively brings over 40 live NBA G League games to Roku for the 2024–2025 season. The initiative benefits both parties, providing a valuable platform for the NBA to share content and engage fans, while Roku gains a high-profile channel with premium ad opportunities and a potential increase in platform engagement from sports enthusiasts. This "shoulder content" type is cost-effective in producing and keeping sports fans deeply engaged, setting a precedent for other sports and niche content on streaming platforms. If you didn’t know, I co-founded an app development company called Float Left in the day. ?We built a LOT of Roku apps. In fact, we were the first company to do so. Our first Roku project was for the NBA and its 2009-2010 Gametime app. Link

YouTube will live stream the Coachella music festival for its 12th consecutive year and bring its "Multiview" feature. This addition enables viewers to watch up to four of the six Coachella stages being streamed, all at once, on their connected TVs, enhancing the viewing experience with more simultaneous live coverage. I’ll be eating and meeting through Vegas for NAB, so I’ll probably miss out. That said, hit me up if you’ll be at the show. Link

YouTube has introduced "key moments" on its TV apps, a new feature that auto-generates highlights within videos. This update is part of YouTube's ongoing efforts to improve its UX. Link

Bob Iger won a landmark proxy battle against Nelson Peltz's Trian Group, gaining 75% of retail investor votes. This victory spotlights Disney's strategic introspection amidst a broader industry shift, especially regarding streaming profitability and theme park innovation. Acknowledging the win, analysts foresee Disney's focus on growth areas like streaming and ESPN integration within Disney+ despite challenges transitioning from the ol’ pay TV. The outcome signals a pivotal moment for Disney, emphasizing the need for adept management and strategic evolution. Link

Bob Iger unveiled that the standalone ESPN streaming service will launch in the Fall of 2025. The service, targeted at a $25-$30 monthly subscription fee, will deliver ESPN's full content slate and live events, eliminating the need for a pay TV subscription. Access will be available through Disney+, though it remains unclear if it will be offered independently. Iger suggested the ESPN service might become an add-on feature within Disney+, similar to Warner Bros. Discovery's Bleacher Report Sports Add-On for Max. Link

Disney concluded its beta integration of Hulu and Disney+, which allows viewers to access Hulu's on-demand content directly within Disney+. While the move doesn't significantly alter the user interface except for removing the beta insignia, ?it does signify the beginning of a new promotional strategy that treats Hulu and Disney+ as a combined offering. As mentioned last week, this will broaden advertising opportunities. Link Apollo Global Management's offer of $27 billion to acquire the entirety of Paramount Global, which followed a previous $11 billion offer for Paramount Pictures, ?was declined amid exclusive talks between Shari Redstone and Skydance Media. Now, in a 30-day exclusive window, these discussions could pave the way for a merger involving Redstone's National Amusements Inc. (parent of Paramount). Link

Spotify, which recently surpassed 236 million paying subscribers, will raise its subscription prices by $1 to $2 in several markets, including the U.K., Australia, and Pakistan, by the end of April 2024, with an increase in the U.S. later this year. Following a previous hike in the U.S., this pricing adjustment partly supports the costs associated with its newly introduced audiobook service. Link

INDUSTRY INSIGHTS

LG Ad Solutions, operator of the free ad-supported TV (FAST) service LG Channels, has unsurprisingly found that 70% of connected TV users prefer streaming FAST content instead of a paid subscription without ads. Link

MoffettNathanson forecasts that YouTube TV will gain 1.5 million subscribers annually, reaching a net income of $600 million and achieving break-even status this year. This growth will position YouTube TV as the top live TV provider, surpassing the likes of Comcast, Spectrum, DIRECTV, and DISH. Link

Boston Consulting Group reveals that U.S. households spent $12 less on streaming services per month than they were willing to, indicating the potential for the subscription video market to increase prices. Despite a 35% rise in cancellations last year, consumer demand remains strong, with an $8 billion opportunity identified if services can bridge half of this spending gap. Link

A new Bango report reveals that SVOD and Retail subscriptions in the US lead with 76% and 62% of subscribers, respectively. Music subscriptions also show significant adoption at 44%. However, increasing competition prompts service providers to raise prices and curb password sharing, leading to 35% of respondents paying for a service that was free before. Moreover, 56% of subscribers canceled due to price hikes. Introducing ad-supported tiers triggers mixed reactions, with some subscribers downgrading or canceling subscriptions. Link

A Top10.com study has found that 50% of respondents approve of their streaming services' AI-curated content recommendations, with users of online TV services like Fubo, Sling TV, DirecTV Stream, and Philo showing appreciation. However, satisfaction with AI recommendations remains lower among top subscription streaming VOD platforms such as Hulu, Netflix, Prime Video, and Disney+. Moreover, most respondents express reluctance towards watching AI-generated movies and TV shows, with only a small percentage believing AI content would be superior to human-generated content. Link

But wait, there’s more:

• How Many Subscribers Each Streaming Service Has — Spring 2024 Edition. Link
• Your cut-out-and-keep guide to Big Tech talking points in a new age of antitrust. Link
• Survey: U.S. Internet Costs Continue to Climb. Link

ICYMI

Have news I should be talking about? Let me know.

Measurement companies are ramping up their "big data" efforts in anticipation of the NewFronts and TV upfronts season. Nielsen revealed plans to blend panel data with big data measurement to establish a new official currency by September. Simultaneously, the Joint Industry Committee (JIC) granted Comscore and VideoAmp certifications to serve as national currencies for transactions, with iSpot's conditional certification pending a final review in June 2024. Link

Crunchyroll is introducing the ability for subscribers to create up to five individual profiles, each customizable with a choice from over 30 avatars. This new feature is expected to roll out by the end of April, allowing for more personalized viewing experiences on the service. Link

Storiaverse launched a "Read-Watch" storytelling app, blending video and written content. Users can interact with animated clips and text, and the app offers 25 original titles at launch. The service, launched amid concerns over TikTok's future, provides a new revenue avenue for creators, compensating them for their contributions and exploring additional monetization methods. With over 100 creators and 100 stories in development, Storiaverse, backed by $2.5 million in pre-seed funding, aims to modernize content consumption and creator collaboration. Link

Tastemade has partnered with Crunch Fitness to provide its fitness club members a complimentary two-month subscription to Tastemade+, an ad-free, on-demand food and lifestyle streaming platform. This collaboration grants Crunch Fitness members access to over 12,000 recipes, cooking and DIY videos, meal plans, and various events. Link

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