Weekly Wrap: Spotify for Hollywood

Every week, I diligently curate, and also rap about, 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:

• FIFA raising $2 billion to expand FIFA+
• NFL owes $4.7 billion over Sunday Ticket
• Peacock will recap the Olympics with an A.I. Al Michaels
• Caffeine abruptly shuts down
• Netflix to get 313 million customers by 2029
• Jason Kilar proposes “Spotify for Hollywood”

FROM THE FRONTLINES

Bango and Uber have formed a strategic partnership to expand Uber One memberships through bundling and Superbundling partnerships, initially launching in the U.S. Uber One will be available as an add-on with mobile and broadband plans via Bango's Digital Vending Machine?. This partnership aims to grow Uber’s subscriber base by leveraging indirect channels and catering to the rising demand for flexible and bundled subscription services, as highlighted by Bango's 2024 consumer survey. Link

FIFA is seeking to raise up to $2 billion to expand its streaming service, FIFA+, targeting financial investors in the US and Middle East. The investment would be for a minority stake in FIFA+, launched in 2022 as a free ad-supported service to stream live soccer matches. Link

The NFL owes over $4.7 billion after a jury ruled it violated antitrust laws with its "Sunday Ticket" subscription service. The lawsuit claimed the league inflated prices and restricted competition by offering games only through satellite providers. The NFL plans to appeal, asserting their distribution model is fan-friendly. The verdict affects 2.4 million residential and 48,000 commercial subscribers. Post-trial motions start on July 31. Link

Peacock will offer extensive coverage of the 2024 Summer Olympics in Paris, including a "Your Daily Olympic Recap on Peacock" feature starting July 27. Viewers can personalize their 10-minute highlight reels featuring the AI-generated voice of Al Michaels. Peacock will provide 5,000 hours of live streaming, multiview options, and a whip-around show called "Gold Zone." New customers can sign up for a year of service for $30. Link

Accedo, Qualcomm Technologies, and HBS have formed the XR Sports Alliance to advance XR sports services, integrating expertise in video user experience, XR technology, and sports broadcasting. The alliance aims to accelerate XR sports development and deployment by providing an end-to-end framework for immersive video production, system architecture, and monetization. Link

YouTube is in talks with major record labels to license music for AI training, aiming to develop its Dream Track AI tool for Shorts. This follows RIAA lawsuits against AI music generators for copyright infringement. The move aligns with YouTube's strategy to compete with TikTok and addresses the legal complexities of using copyrighted material for AI purposes. Link

Caffeine, a streaming platform for sports, gaming, and entertainment, shut down on June 26 due to profitability issues despite having 61 million monthly users. The platform partnered with 200 sports entities, including niche leagues like the World Surf League and LIV Golf. Caffeine, which received a $100 million investment from Fox in 2018, explored various monetization models and aimed to expand its advertising and distribution partnerships before the shutdown. Link

Dish Network has announced a deal that offers Netflix's standard plan with ads at no additional cost for two years with a Dish TV subscription. This initiative aims to slow subscriber losses by requiring a 24-month commitment. Pay-TV operators like Charter Communications and Comcast employ similar strategies to attract and retain subscribers. Despite a net loss of 348,000 pay-TV subscribers in Q1 2024, Dish's new offer hopes to mitigate further declines. Link

The European Commission has criticized Apple for restricting developers from promoting cheaper purchasing options outside the App Store and charging excessive fees, potentially breaching the Digital Markets Act (DMA). Apple claims its compliance efforts are sufficient. A final decision is expected by March 2025, and Apple could face fines of up to 10% of its global revenue if found guilty. Link

Roku is launching a weekly trivia game on its home screen to engage users and enhance monetization. This new feature, increasing programmatic ad capabilities and growing subscriptions, supports Roku's strategy to capture traditional TV ad budgets shifting to streaming. Roku's platform revenue grew 19% year-over-year to $755 million in Q1 2024, driven primarily by advertising. Link

The University of Texas is rebranding the Longhorn Network into a free streaming platform, coinciding with its move to the SEC. The new LHN will offer original content, live coaches' shows, and historical footage. Partnering with Endeavor Streaming for technology and Learfield Studios for staffing and advertising, Texas aims to modernize content delivery and increase engagement through branded content and advertising instead of subscription models. Link

Cineverse has partnered with XL8 to integrate AI-powered translation into its Matchpoint platform, reducing costs and enhancing content distribution. This technology will enable real-time localization, including AI-generated subtitles and captions, helping FAST content partners expand internationally more efficiently. This partnership aims to improve content distribution and monetization. Link

Paramount Global is exploring asset sales to save $500 million annually, reduce debt, and focus on streaming. Potential sales include BET, linear cable networks like Comedy Central and Nickelodeon, and international networks such as Network 10 and Channel 5. This strategy aims to improve financial stability and enhance direct-to-consumer streaming services. Link

HBO and Max content CEO Casey Bloys announced that major Warner Bros. IP projects, including the "Harry Potter" TV show and "Green Lantern" series, will now be branded as HBO originals instead of Max originals. Starting in 2025, this shift aims to unify high-budget, high-quality productions under the HBO label. This decision follows the realization that the distinction between HBO and Max shows needed to be revised, as both used similar production methods and talent. Link

MyBundle will soon offer a $11 monthly premium package bundling My Outdoor TV and Tastemade Plus through its direct-to-consumer marketplace and broadband partners. This follows a distribution agreement with Outdoor Sportsman Group, leveraging MyBundle’s payment and subscription tools. The partnership aims to expand My Outdoor TV's reach, offering extensive outdoor lifestyle and adventure content and attracting high-value subscribers. Link

Titan OS has launched Titan Ads, a connected TV advertising marketplace targeting over 30 million European streaming households. Titan Ads will expand further and be available in the UK, Germany, France, Italy, and Spain. It offers homepage ads and in-stream video ads, leveraging Titan OS's reach on over four million connected TV sets and partnerships with platforms like Virgin Media. Initial launch partners include Currys in the UK and Boulanger in France. Link

Related: Titan OS And The Continued Rise Of The Independent TV Operating System

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THE TAKE

Netflix Expands Beyond Streaming with Popcorn, Experiential Stores, and Gaming Ventures

Netflix is diversifying beyond streaming into consumer products and physical experiences. It launched “Now Popping” popcorn at Walmart, is opening Netflix House venues in shopping centers, and continues to expand its gaming portfolio. The new popcorn line includes flavors like “Cult Classic Cheddar Kettle Corn,” while Netflix House will feature themed entertainment, dining, and shopping. In gaming, Netflix is leveraging its IPs, with popular titles like Assassin’s Creed and the Grand Theft Auto Trilogy. These moves aim to create deeper audience engagement and position Netflix as a comprehensive lifestyle brand. Link

INDUSTRY INSIGHTS

Digital TV Research projects that Netflix will grow from nearly 270 million to 313 million customers by 2029, while Disney+ will increase from 153 million to 193 million subscribers. Overall, global subscription streaming customers will reach 1.79 billion by 2029. Link

Niche streaming services are thriving in the competitive industry by targeting specific, loyal audiences. Services like Dropout, Crunchyroll (13 million subscribers), Shudder, and Fandor (1.4 million subscribers) offer specialized content such as comedy, anime, and horror. AMC Networks operates niche streamers with a total of 11.2 million subscribers. Despite lower budgets than giants like Netflix, these services succeed by deeply engaging fans and sustaining operations through unique content and dedicated followings. Link

Related: Popular YouTubers Turn to Self-Branded Streamers - Will It Work?

YouTube continues to dominate media consumption, especially in living rooms, holding 9.7% of all TV viewership in the U.S. in May 2024, surpassing Netflix's 7.6%. With over 150 million Americans watching YouTube on connected TVs monthly, it remains a formidable presence in the streaming market. Media giants like Netflix, Disney, and Warner Bros. Discovery are grappling with YouTube's influence. YouTube's ad revenue reached $31.5 billion in 2023, attracting over 2 billion monthly active users globally. Link

Variety reports a nearly 20% decline in original TV show releases from streaming services in the first half of 2024, with 367 new series compared to 452 in 2023. Disney+ releases fell 54%, while Paramount+ saw a 35% decrease. This decline is due to the industry's shift towards profitability, cautious content investments, and delays from the WGA and SAG-AFTRA strikes. Link

Disney Advertising's "Generation Stream: Family Edition" study shows that 76% of families enjoy nostalgic content, while 72% prefer educational and cultural programming. Streaming improves family connections, with 77% reporting better relationships through shared viewing. The variety of streaming options leads families to discover new content together. These insights help advertisers create targeted campaigns, capitalizing on significant moments in family entertainment. Link

Parks Associates reports a 30% drop in US spending on streaming services, averaging $63 per month in 2024, down from $90 in 2021. Consumers are turning to ad-based alternatives to save costs. The average number of streaming subscriptions per household has fallen below five, with 32% canceling due to expense cuts. Link

But wait there’s more:

• Are 200 Million Streaming Subscribers Enough to Survive? Perhaps Not Anymore. Link
• Inside Amazon Games Chief’s Strategy to Build Up a Triple-A Threat With ‘Tomb Raider,’ ‘Lord of the Rings’ and Leaving Space for New IP. Link

ICYMI

Netflix and other streaming giants are shifting towards profitability with slowing user growth and consolidations. Executives like Netflix's Ted Sarandos and Amazon's Mike Hopkins highlight trends of more ads, higher prices, and fewer prestige TV projects. Predictions include increased investment in live sports, more bundling, and potential mergers or shutdowns of smaller services. Streamers need at least 200 million subscribers to compete, making the industry resemble the old cable TV ecosystem. Link

Jason Kilar, former WarnerMedia CEO, proposes a "Spotify for Hollywood" model where studios contribute content to a single platform, earning 70% of the revenue. This concept could replace current streaming bundles like Comcast's Peacock, Netflix, and Apple TV+ packages. Kilar predicts only three global entertainment companies will achieve the necessary scale for profitability, foreseeing major mergers in the next two years. His vision contrasts with the trend of bundled streaming services. Link

The Streaming Innovation Alliance (SIA), initially formed in September 2023 with members like Netflix and Disney, has added six new partners: Demand Africa, FedNet, In The Black Network, Radiant Technologies, Skins, Plex, Native America On Line, and TVEI Network. These additions enhance the alliance's diversity, including coverage of the US Congress and African and Native American storytelling. Link

Neal Zuckerman from Boston Consulting Group believes we are on the brink of a new growth era in media. Previous phases saw growth driven by advertising and subscriptions, with companies like Netflix and Spotify at the forefront. Now, companies are blending ads with subscriptions, as seen with Google's YouTube Premium and Netflix's ad-supported tiers. This transition leads to diverse revenue strategies, including video games and theme parks. Link

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