Streaming service wars news and trends 4 4

[drotto]

On 5/10/2023 at 5:00 PM, Bosco685 said:

 

But they also planted the seeds that the 3rd quarter could get ugly.  That is why the stock is trading sharply down in after hours trading.  Seems like them pushed off many of the negatives into the third quarter in thr hope that things improve as it moves forward. Apparently they lost about 300000 subscribes in the US but ended up overall up with international increases. 

 

In addition to the app, they announce add free rates are going to be increased again, but ad tier sound like it will remain the same. They also said some content is going to be removed from the service likely to cut storage and bandwidth costs.  Disney also hinted that original content is still being looked at for viability and costs savings.

 

Not the best earnings call ever.

[theCapraAegagrus]

That's good for me, since I have access to my best friend's D+ account.

[drotto]

Disney stock is down about 8% today. OUCH. Investors did not like what they heard.

[PsylockeSmythe]

Investors still seem to be focused on the streaming side of Disney, the Parks and other parts did just fine.  Disney+ going down to 157+ million subscribers is what they are all focusing on, even though most of those were in India where the average ARPU was 60 cents, and by losing those customers, the overage ARPU for Disney+ increased to $7.14 for the latest quarter, compared to $5.95 the previous quarter.

Yes it is getting hammered today, which I think is an overreaction.

Psy

[1Cool]

On 5/11/2023 at 11:28 AM, PsylockeSmythe said:

Investors still seem to be focused on the streaming side of Disney, the Parks and other parts did just fine.  Disney+ going down to 157+ million subscribers is what they are all focusing on, even though most of those were in India where the average ARPU was 60 cents, and by losing those customers, the overage ARPU for Disney+ increased to $7.14 for the latest quarter, compared to $5.95 the previous quarter.

Yes it is getting hammered today, which I think is an overreaction.

Psy

I'm more concerned about the 7 billion in profits on a 170 billion valuation.  I've been trying to grab companies with a sub 12 multiplier and a value of 23.3 seems pretty high in the current market.  I've got some shares and I'm holding but I'm not buying any more for the foreseeable future.

[Gatsby77]

I think companies are waking up to streaming's being - maybe - a necessary investment -- but not an automatically profitable one.

Netflix not only had a huge head start, but now stands with the largest library of content -- and the brand recognition of being the category leader (with such memes as yesterday's "Make it a Blockbuster night" giving way to today's "Netflix & chill.")

Fox and MGM, realizing they couldn't compete alone in this new landscape, opted to sell entirely.

Even Disney+ has failed to find significant traction - and combining Hulu and Disney+ into one reflects this -- the Disney+ library (even with Marvel, Star Wars and legacy Disney cartoon characters) simply isn't enough to compete on its own.

Even Paramount's stock is sitting at ~50% of Warren Buffett's average buy price last year, when his investment thesis was essentially that Paramount had solved the hard technical part of building the streaming infrastructure, and it would really take off on the content & subscriber side by 2024.

Net/net: I think we're going to see more consolidation going forward.

Frankly, I don't see Peacock or CBS All-Access surviving long-term, as I imagine both their content libraries and subscriber bases lag well beyond those of Netflix, Amazon, Hulu/Disney+, Max and Paramount+.

And Max was absolutely correct to start selling off content to the likes of Roku and Netflix - that helps save bandwidth costs and frees up some cash for additional, more current content.

[drotto]

On 5/11/2023 at 11:28 AM, PsylockeSmythe said:

Investors still seem to be focused on the streaming side of Disney, the Parks and other parts did just fine.  Disney+ going down to 157+ million subscribers is what they are all focusing on, even though most of those were in India where the average ARPU was 60 cents, and by losing those customers, the overage ARPU for Disney+ increased to $7.14 for the latest quarter, compared to $5.95 the previous quarter.

Yes it is getting hammered today, which I think is an overreaction.

Psy

Iger specifically said that the cruise line was the biggest profit center last quarter.  The parks did ok.  Unfortunately, what you have is a situation where the tourism side (parks and cruises) is propping up the streaming and entertainment side, which is not doing well, but is higher profile.  Granted, people seem to forget the tourism side of Disney has historically generated far more revenue than entertainment.  

 

My worry is long term that the parks to an extent are dependant on strong IP's and merchandise sales.  So even if entertainment is a smaller revenue driver, it is essential to IP developement and maintenance.  So if thr IP's lose there ability to drive people to the tourism side, how does that effect Disney?

Edited May 11, 2023 by drotto

[Bosco685]

On 5/11/2023 at 11:28 AM, PsylockeSmythe said:

Investors still seem to be focused on the streaming side of Disney, the Parks and other parts did just fine.  Disney+ going down to 157+ million subscribers is what they are all focusing on, even though most of those were in India where the average ARPU was 60 cents, and by losing those customers, the overage ARPU for Disney+ increased to $7.14 for the latest quarter, compared to $5.95 the previous quarter.

Yes it is getting hammered today, which I think is an overreaction.

Psy

I keep hearing that about the India market and cricket being no big deal because - pffft - they pay very little anyway. That's like straight out of a Disney Marketing playbook using that as an excuse to write it off. Yet the stateside gains Disney+ experienced in 4Q 2022 are erased and then some with the increase in subscription prices.

Disney+ loses 4m subscribers amid exodus in Indian market

Quote

Disney, known for Pixar, Star Wars and Marvel films, said its flagship streaming service lost 4 million subscribers in the first three months of the year.

 

Subscribers to Disney+ services, home to movies such as Toy Story, Monsters, Thor and Black Panther, fell to nearly 158 million from January to March, the second quarter of customer losses after a net loss of 2.4 million in the previous three months. Analysts had expected Disney+ to add more than 1 million customers in the quarter. The shares fell nearly 5% in after-hours trading.

 

Most of the lost subscribers came from Disney+ Hotstar in India after the company lost streaming rights to Indian Premier League cricket matches. Disney also lost 300,000 customers in the US and Canada, after raising subscription prices in December.

Compared to 4Q 2022 Disney+ losses, that started this train.

Disney+ Lost 2.4 Million Subscribers in Q1: What Happened

Quote

Disney+ lost 2.4 million subscribers in the final calendar quarter of 2022, which the company observes as its first fiscal quarter of the new year (in this case, 2023). While the loss took place outside of the U.S. and was not as bad as some analysts expected, it is still a harsh reality to see in black-and-white.

 

The company’s own previous guidance predicted modest “core” Disney+ growth, excluding India, where Disney+ Hotstar lost IPL cricket rights at auction. (Viacom18, a joint venture between competitor Paramount and India’s Reliance Industries, won the digital rights with a $2.62 billion bid; Disney Star got the linear-TV rights for $3.02 billion).

 

Things went smoother stateside. In the U.S. and Canada, Disney+ gained 200,000 subs to reach 46.6 million. Hulu added 800,000 subscribers in the quarter (to reach 48 million); ESPN added 600,000 (to reach 24.9 million).

 

[PsylockeSmythe]

On 5/11/2023 at 12:02 PM, 1Cool said:

I'm more concerned about the 7 billion in profits on a 170 billion valuation.  I've been trying to grab companies with a sub 12 multiplier and a value of 23.3 seems pretty high in the current market.  I've got some shares and I'm holding but I'm not buying any more for the foreseeable future.

I'm also just holding, though I might try and nibble some at the current price.  I feel that the combination of what has happened over the last 3 years has caused the stock to go from overpriced based on Disney+ Streaming numbers that inflated fast due to the lockdowns to somewhat undervalued when it gets below $100 share price.  Since 2009 the PE ratio has been anywhere from 10 to 283 (back in 2021) and the I agree that based on current numbers the PE is higher than I would like, but some of the drag on earnings in my opinion is that the media side hasn't performed as well has it has previously and they expanded Disney+ faster than expected.

On 5/11/2023 at 2:08 PM, drotto said:

Iger specifically said that the cruise line was the biggest profit center last quarter.  The parks did ok.  Unfortunately, what you have is a situation where the tourism side (parks and cruises) is propping up the streaming and entertainment side, which is not doing well, but is higher profile.  Granted, people seem to forget the tourism side of Disney has historically generated far more revenue than entertainment.  

 

My worry is long term that the parks to an extent are dependant on strong IP's and merchandise sales.  So even if entertainment is a smaller revenue driver, it is essential to IP developement and maintenance.  So if thr IP's lose there ability to drive people to the tourism side, how does that effect Disney?

I agree with this, that people seem to forget the tourism side of Disney.  If you compare the park side numbers between Q2 2019 (year before lockdowns) and Q2 2023, the park side numbers have increased by around 1.6billion in revenue.  My concern is that at some point they will start to price people out of going to the parks.  I don't mind doing a Disneyland day when we visit family in Southern California, but I would rather do a Disney cruise before going down to Disney World, since they both would cost similar for 7 days and I feel that the cruise would be so much more relaxing to me.

On 5/11/2023 at 2:47 PM, Bosco685 said:

I keep hearing that about the India market and cricket being no big deal because - pffft - they pay very little anyway. That's like straight out of a Disney Marketing playbook using that as an excuse to write it off. Yet the stateside gains Disney+ experienced in 4Q 2022 are erased and then some with the increase in subscription prices.

Disney+ loses 4m subscribers amid exodus in Indian market

Compared to 4Q 2022 Disney+ losses, that started this train.

Disney+ Lost 2.4 Million Subscribers in Q1: What Happened

 

I was just pointing out what was on a CNBC article that I read.  From my understanding is that Disney+ has one of the lower ARPU of the major streaming services and that everything that I read, showed that ARPU from India has always been a drag on the number.  I figured that with the price increases and them raising the price later this year will cause more people in NA to drop the service.  My hope is that at some point they find a good balance between everything so that the service is not a drag on the rest of the company.

Psy

[drotto]

On 5/12/2023 at 11:16 AM, PsylockeSmythe said:

I agree with this, that people seem to forget the tourism side of Disney.  If you compare the park side numbers between Q2 2019 (year before lockdowns) and Q2 2023, the park side numbers have increased by around 1.6billion in revenue.  My concern is that at some point they will start to price people out of going to the parks.  I don't mind doing a Disneyland day when we visit family in Southern California, but I would rather do a Disney cruise before going down to Disney World, since they both would cost similar for 7 days and I feel that the cruise would be so much more relaxing to me

I have been to Disney World 4 time with my family or friends over that last 15 years, and have been on 3 Disney Cruises (Yes, I have giving Disney way too much money), but I have not been there in at least 5 years now.  The cruises if you can get past the ride experience, are a vastly superior Disney experience. Better access to characters, more meaningful interacts with cast members, great food, great shows, and far more relaxing.

[Bosco685]

 

[awakeintheashes]

Bad news for all or most people who get Max as part of their cable bundle or as streaming service add-on. HBO appears to have removed the 4K/Dolby Vision and Atmos versions of content from all tiers except the Ultimate Ad-Free tier. This was confirmed by some on the AVS Forum who chatted with customer service reps at HBO.

I think HBO had confirmed this would happen but never said when. Also, I believe HBO said that some would be grandfathered or there would be a 6-month period where legacy subscribers could enjoy 4K content before being forced to change plans to enjoy such content. However, this change is effective immediately for those using an AppleTV and have updated to the latest version of the Max app. 

Edited June 17, 2023 by awakeintheashes

[awakeintheashes]

Looks like this was either a glitch and customer service was ill informed or the removal of 4K content was premature. The 4K/DV versions of content on my Max subscription were restored today. Others have reported the same. 

[Bosco685]

Quote

Streaming Shocker: Warner Bros. Discovery In Talks To License HBO Original Series To Netflix

 

EXCLUSIVE: HBO’s streaming walled garden is coming down, it seems.

 

In a hugely surprising move, Deadline understands that Warner Bros. Discovery is shopping some of its HBO library titles to rival Netflix. Such a deal would mark the first time in nearly a decade that HBO shows would exist on a rival SVOD service in the U.S.

 

The first title that Deadline understands is set to be part of the arrangement is Issa Rae comedy Insecure, which ran for five seasons on HBO and finished in December 2021. We hear there are other titles being discussed.

 

According to sources, this is a financial move. We hear HBO veterans pushed back against the plan but corporate financial consideration won out. 

More DC content please, as WB seems like it can't handle it.

[Buzzetta]

Anyone sharing a Netflix account and have NOT been impacted by the change ?

I gave my Netflix account to my parents who live across town.  So far so good.

 

[sd2416]

On 6/21/2023 at 5:47 AM, Buzzetta said:

Anyone sharing a Netflix account and have NOT been impacted by the change ?

I gave my Netflix account to my parents who live across town.  So far so good.

 

No, but both my kids still use my Hulu, and its been prompting to change our "home" location each time one of them logged in. You can only change it so many times in a year, so they had to get their own accounts.  

[Bosco685]

Hulu landed a hit when it picked up this show

 

[paperheart]

[Bosco685]

On 7/5/2023 at 6:45 PM, paperheart said:

It gets worse.

 

[Bosco685]

Quote

It must have been quite a shock to the captain of industry—standing at the lectern at his alma matter, resplendent in his red-and-black graduation regalia—when he realized the Boston University Class of 2023 was booing him. David Zaslav, president and CEO of Warner Bros. Discovery, was delivering the commencement address, recalling how the late General Electric CEO Jack Welch once told him, “If you want to be successful, you’re going to have to figure out how to get along with everyone—and that includes difficult people.”

But instead of listening to his pearls of wisdom, the students were heckling him. Others had turned their backs to the stage. Now more were chanting, “Pay your writers,” as Zaslav, a studio head, was one of the oft-invoked villains of the striking Writers Guild of America.
He tried to press on with his story, continuing to quote Welch: “Some people will be looking for a fight.” The booing continued.

Zaslav later issued a statement thanking BU for the invitation, and insisting, “as I have often said, I am immensely supportive of writers and hope the strike is resolved soon and in a way that they feel recognizes their value.” But he had been humiliated, openly and unapologetically, and while he was duly kowtowed after the fact—BU President Robert Brown publicly apologized for the incident, blaming it on “cancel culture”—he must’ve wondered, somewhere in the back of his mind, how it had come to this.

 

In a relatively short period of time, David Zaslav has become perhaps the most hated man in Hollywood. Few people who weren’t industry insiders even knew his name two years ago, when Discovery merged with WarnerMedia to become Warner Bros. Discovery.

 

Zaszlav had been CEO of Discovery Communications since 2006, where he oversaw the transition from, in his words, “no longer a cable company, (but) a content company.” What that meant, from a viewer’s perspective, was Discovery’s transition from educational programming to reality slop—which is, of course, a much more lucrative business model.

In his (slight) defense, there were considerable challenges awaiting the CEO of the new Warner Bros. Discovery conglomerate, whomever that might have been. Warner Bros. had, like most motion picture studios, struggled considerably during the pandemic. Their decision to simultaneously stream their entire 2021 theatrical slate on the HBOMax streaming service upset other filmmakers, including those whose films were impacted by it (and theatrical chains as well). One example? Christopher Nolan, who’s enormously profitable relationship with WB began back in 2002, was so pissed that he took his new film Oppenheimer to Universal out of frustration by the company’s poor handling of his 2020 feature Tenet.

 

In retrospect, the right person for the job of healing those wounds and reestablishing relationships with filmmakers might not have been the guy best known for shepherding the likes of Naked and Afraid, Dr. Pimple Popper, and My 600-lb Life. And, to be fair, figures from the world of reality TV are often seen with suspicion, if not outright snobbery, by those responsible for scripted fare. But Zaslav did himself no favors, and did little to blur that binary, when announcing the merger of the HBOMax and Discovery+ streaming services in a quarterly earnings call—which included a much-derided infographic deeming HBOMax’s scripted programming as “male skew,” “appointment viewing,” and “lean in” (?), while Discovery+’s unscripted shows were “female skew” “comfort viewing,” and thus ”lean back” (?!?).

UFC Fighter Ciryl Gane Breaks Down Combat Sports in Movies
More distressingly, in that same call, Zaslav announced that two nearly completed films that had been greenlit and produced under the previous regime for streaming on HBOMax—the DC superhero story Batgirl and the family sequel Scoob!: Holiday Haunt—would not be distributed on the platform or released in theaters. Instead, they would be essentially wiped from existence and used as a tax-write down.

Eagle-eyed subscribers subsequently noted that several other Max originals, including the Seth Rogen comedy An American Pickle and Robert Zemeckis’s remake of The Witches, had been quietly removed from the service, in a further attempt to save money. The service proceeded to remove several dozen series from its library, from HBO originals like Westworld and Vinyl to family programming like The Not-Too-Late Show with Elmo to animated series like Infinity Train. Even episodes of Sesame Street weren’t safe. Several other streaming services, including Paramount+, Starz, Showtime, Disney+ and Hulu, have followed suit, disappearing their underperforming originals for tax purposes, creating giant swaths of shockingly recent yet bafflingly “lost” media.

 

Meanwhile, the merger of the HBOMax and Discovery+ services continued apace, with a bizarre rebranding to simply “Max,” consciously choosing to remove its most prestigious and identifiable piece of branding. (It was akin to Disney+ renaming itself “Plus.”) It was almost as if the reality-skewing CEO was ashamed of the streamer’s affiliation with high-quality, high-profile scripted programming—a perception further confirmed when Max launched in May.

 

On the “details” tab for film and shows on the service’s new interface, writers, directors, and producers, no matter how they’re credited in the work in question, are lumped together (in no particular order) under the nebulous designation of “creators.” (That means, for example, that according to Max, the film Raging Bull was “created” by Peter Savage, Martin Scorsese, Mardik Martin, Robert Chartoff, Paul Schrader, Jake La Motta, Irwin Winkler, and Joseph Carter.) A joint statement from the Director’s Guild of America and the Writer’s Guild of America West criticized the “unilateral decision by Warner Bros. Discovery to change the long-standing individual credits of directors and writers in the new rollout of Max.” Max quickly promised to “correct the credits, which were altered due to an oversight in the technical transition from HBO Max to Max.” More than a month later, the “oversight” has not been corrected.

 

That backlash, however, was nothing compared to what happened recently. In mid-June, Warner Bros Discovery cut loose five of the most senior executives (“the people who’ve been the architect of the brand for decades,” according to one insider) at Turner Classic Movies, the cable network beloved among cinephiles—and high-profile filmmakers. Steven Spielberg, Martin Scorsese, and Paul Thomas Anderson quickly released a statement, noting, “Turner Classic Movies has always been more than just a channel. It is truly a precious resource of cinema, open 24 hours a day, seven days a week. And while it has never been a financial juggernaut, it has always been a profitable endeavor since its inception.” And while they insisted Zaslav had assured them “that TCM and classic cinema are very important to him,” subsequent reporting indicated that TCM’s staff had been cut from 90 employees to a skeletal 20.

Nearly lost in the hullabaloo was yet another of the company’s exhaustive attempts to squeeze a profit from its assets: a $500 million deal to sell around half of their film and TV-music library. In a perhaps too-good-to-be-true detail, the sale would reportedly include “As Time Goes By” from Casablanca—the musical fanfare that plays before every Warner Bros. feature film.
Barely a month ago, Graydon Carter was hosting a party in Zaslav’s honor at Cannes, all but crowning him as the heir apparent to Jack Warner. But there’s a crucial difference between Zaslav and the old-school moguls he’s attempting to emulate: They loved movies, and cared about filmmakers. Zaslav sees movies as “content,” sees filmmakers as “content creators,” and is only interested in maintaining, preserving, and presenting “content” that can make him and his stockholders a quick buck. Anything that doesn’t, he’ll happily gut. He’s closer to Logan Roy than Jack Warner and there is a genuine, understandable fear that his bean-counting represents not just shrugging indifference but outright hostility to cinema and its rich history.

In Pretty Woman, Richard Gere stars as Edward Lewis, a corporate raider who buys companies “that are in financial difficulty” and sells off their pieces. “So it's sort of like stealing cars and selling them for the parts, right?” asks call girl Vivian (Julia Roberts), when he explains what he does, and it’s hard not to think of Lewis when looking over Zaslav’s reign at Warner Bros Discovery, stepping into the distressed conglomerate and stripping it for parts.

Edward Lewis, however, is at least honest about what he does. “You don't make anything,” Vivian notes, and he agrees; “You don’t build anything,” she continues, and he concurs with that as well. And perhaps that’s why David Zaslav is earning a concerning reputation so far. He’s out here carrying on like a mogul, but based on his performance to date, he’s only good at breaking things.

 

Edited July 5, 2023 by Bosco685