Streaming service wars news and trends 4 4

[1Cool]

On 9/20/2023 at 2:17 PM, CAHokie said:

I started the rotation model recently and it is the way to go.  Currently I am using a promo for Starz. As soon as finish the Power Series, John Wick 4, and Heels, I will drop it and decide what to watch next.  Netflix and Prime are the two I keep permanently as of now.  I had already paid for HBO for a year but I will most likely let it go for a while after the term ends. 

Streaming services will have to lock people in for 6 or possibly 12 months to combat people switching services each month.  Monthly services will double in price and the only way to keep the "cheap" service will be to lock yourself in kind of like they do with phone services.  The current price structure is just too cheap considering how much shows can be digested in a month (even 2 hours a day is 60 hours of entertainment for $15 ).  The number of people signed up will plummet but they will also plummet with everyone switching every month or two.

[CAHokie]

On 9/21/2023 at 8:18 AM, 1Cool said:

Streaming services will have to lock people in for 6 or possibly 12 months to combat people switching services each month.  Monthly services will double in price and the only way to keep the "cheap" service will be to lock yourself in kind of like they do with phone services.  The current price structure is just too cheap considering how much shows can be digested in a month (even 2 hours a day is 60 hours of entertainment for $15 ).  The number of people signed up will plummet but they will also plummet with everyone switching every month or two.

You have a point, but they want those subscriber numbers.  I think when I signed up for HBO it came with a discount to pay for a year in advance. I think that may be the way to go. I would not sign up for a Starz, Paramount, or similar service if I had to commit to 6-12 months unless the price was very good. 

[drotto]

On 9/21/2023 at 8:18 AM, 1Cool said:

Streaming services will have to lock people in for 6 or possibly 12 months to combat people switching services each month.  Monthly services will double in price and the only way to keep the "cheap" service will be to lock yourself in kind of like they do with phone services.  The current price structure is just too cheap considering how much shows can be digested in a month (even 2 hours a day is 60 hours of entertainment for $15 ).  The number of people signed up will plummet but they will also plummet with everyone switching every month or two.

Again this could backfire.  If you force people into longer commitments, they are more likely to say no thanks.  So if the monthly fee is significantly raised, it will cut down on rotation of subs, but what price for a 5 or 12 month sub becomes attractive? 

 

As an example if they push one month to $25, what is a tempting price for 6 months? Perhaps $100, so 2 months "free"? All this will do is cause people to drop or stretch their rotation.  

 

The prime issue with streaming will always be this, the old popular content will spend years on these serviced, there is no rush to see it.  To pull new people in you therefor need to add old but popular stuff (Friends, Sienfeld, the Office), or popular new content. You need several Stranger Things, Wednesdays, One Pieces, or even second tier stuff like the Boys, every year to get people to say that is worth it. But even say you get 6 shows a year that are must see material, you can sub for 6 months every other year and easily get through all that material. Since the popular stuff will not get pulled.

Edited September 21, 2023 by drotto

[1Cool]

On 9/21/2023 at 10:54 AM, drotto said:

Again this could backfire.  If you force people into longer commitments, they are more likely to say no thanks.  So if the monthly fee is significantly raised, it will cut down on rotation of subs, but what price for a 5 or 12 month sub becomes attractive? 

 

As an example if they push one month to $25, what is a tempting price for 6 months? Perhaps $100, so 2 months "free"? All this will do is cause people to drop or stretch their rotation.  

 

The prime issue with streaming will always be this, the old popular content will spend years on these serviced, there is no rush to see it.  To pull new people in you therefor need to add old but popular stuff (Friends, Sienfeld, the Office), or popular new content. You need several Stranger Things, Wednesdays, One Pieces, or even second tier stuff like the Boys, every year to get people to say that is worth it. But even say you get 6 shows a year that are must see material, you can sub for 6 months every other year and easily get through all that material. Since the popular stuff will not get pulled.

I agree there is no really good route forward at this point since any changes will push down subscription numbers which will off share holders.  But if I produce 6 great shows (and 10 not so great shows) for billions of dollars that you can stream in a couple months then it's a loss for me as the producers.  If all services push monthly fees up to $30 but then offer a year long subscription for $15 will give you locked in people money.  And at this point if all the subscription services start raising prices drastically what options do people have?  We have all cut the cord so there really is no going back to the old ways (where we were all paying $100 a month).  Things will have to change once all the services lose tons of cash.

Edited September 21, 2023 by 1Cool

[HighRadArt]

On 9/21/2023 at 9:32 AM, 1Cool said:

I agree there is no really good route forward at this point since any changes will push down subscription numbers which will off share holders.  But if I produce 6 great shows (and 10 not so great shows) for billions of dollars that you can stream in a couple months then it's a loss for me as the producers.  If all services push monthly fees up to $30 but then offer a year long subscription for $15 will give you locked in people money.  And at this point if all the subscription services start raising prices drastically what options do people have?  We all have all cut the cord so there really is no going back to the old ways (where we were all paying $100 a month).  Things will have to change once all the services lose tons of cash.

Plus the money they're going to lose if they want the strike to end.

[Bosco685]

Bob Iger and Brian Roberts lock horns over ‘kingmaker’s asset’ Hulu

Quote

By early next year, Iger will have discovered how much the decision to hold on to Hulu, home to shows such as Only Murders in the Building and The Bear, is going to cost him. On September 30, Iger’s team will begin a months-long process with Comcast to determine the value of the cable giant’s minority stake in Hulu, setting the stage for Disney to purchase it and gain full ownership.

 

Disney and Comcast have been in an uneasy relationship over Hulu since 2019, when Iger’s company gained a 66 per cent stake in the streaming service through its acquisition of 21st Century Fox. Comcast holds a 33 per cent stake, and the two companies agreed at the time that either could initiate a sale or purchase of all of Hulu at a minimum valuation of $27.5bn. 

 

The process of determining the value of Comcast’s stake was expected to begin sometime next year, but the companies recently agreed to start it sooner. Wall Street analysts admit they have no idea how it will play out, but the consensus is that Disney will end up having to pay at least $9bn for the 33 per cent stake — and possibly much more.

 

Brian Roberts, Comcast’s chief executive, called Hulu a “kingmaker’s asset” at a Goldman Sachs conference this month. He argued that Hulu’s value has increased significantly since 2019, and suggested that a fair price would be around $60bn thanks to potential synergies and a reduction in customer “churn” if it is bundled with Disney+, its flagship streaming service.

 

“Hulu is a great business,” Roberts said. “I think if we’re selling all of this as-is there would be a line of bidders around the block.”  

 

However, Disney will want the Hulu value to be set as close to the $27.5bn “floor value” as possible, analysts say. “Any payment above this level may put pressure on Disney’s equity,” Citi analyst Jason Bazinet wrote in a recent research report. “Hulu’s valuation is apt to make someone disappointed: either Disney will pay more than investors want, or Comcast will receive less than investors expect.”

That's quite the value proposition gap.

[1Cool]

On 9/26/2023 at 9:09 AM, Bosco685 said:

Bob Iger and Brian Roberts lock horns over ‘kingmaker’s asset’ Hulu

That's quite the value proposition gap.

Nobody is getting Disney+ to get Hulu.  Not saying Hulul doesn't have a few good shows and some value but the 60 billion price tag seems silly.

[Bosco685]

 

[Bosco685]

 

[The humble Watcher lurking]

I wonder how HBO Max and Disney Plus will compete with Pluto TV, Freevee, and Tubi going forward?

All of them are free streaming services and at any time can watch some good stuff like Star Trek:Next Generation, Mission Impossible ,Perry Mason, Classic Doctor Who, The Joy of Painting, Johnny  Carson, Columbo,X-Files, Twilight Zone,Three Stooges, Dark Shadows , Godzilla and thousands of other options of movies and shows to watch. . 

I don't see how Disney Plus and HBO Max will be able to compete when the word is out about how easy accessible Pluto TV , Freevee and Tubi are. Can't beat free. 

 

[Bosco685]

Quote

The stock closed at $401.77, up 16%, on nearly five times normal trading volume. The dramatic upswing, the biggest single-day increase since January 2021, came against a muted backdrop for the broader markets and a mixed bag for media and tech stocks.

 

On Wednesday, the streaming giant posted results that soared above analysts’ expectations for third-quarter subscriber gains and earnings. It also reported a surge in free cash flow and signs of growth in its nascent advertising business.

 

Laurent Yoon, an analyst with Bernstein, spoke for many in his note to clients. “They crushed it,” he wrote. “The management deserves an Emmy for managing investor expectations.” Yoon maintains a “market perform” (neutral) rating on the stock, however, so he included a caveat. The third quarter results prompt “one key question in terms of subscriber growth: Did Netflix pull-forward future paid-sharing net adds, or is the addressable market for paid-sharing bigger than anticipated? We expect it is likely a bit of both given the magnitude of the beat.”

 

[Bosco685]

"Fortune favors the brave!"

[drotto]

On 9/26/2023 at 11:28 AM, 1Cool said:

Nobody is getting Disney+ to get Hulu.  Not saying Hulul doesn't have a few good shows and some value but the 60 billion price tag seems silly.

But unlike Disney Plus, Hulu is actually profitable.

[Bosco685]

 

[Bosco685]

Quote

Disney announced today that it would be buying Comcast's remaining 33% stake in Hulu to become the sole owner of the streaming service. The purchase, announced today, is estimated to cost Disney roughly eight-and-a-half billion dollars.

 

Many have speculated on Disney moving to acquire the remaining 33% of Hulu it didn't already own for a long time. Disney became the majority stakeholder following its acquisition of Fox's entertainment division in 2019, which gave it 2/3 ownership over the streamer. Since then, it's also been selling Hulu as part of a streaming bundle with Disney+ and ESPN+, further fueling speculation on the acquisition.

 

According to a press release issued by Disney earlier today, The Walt Disney Company expect to pay NBC Universal approximately $8.61 billion, "representing NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu." The release also specifies that this acquisition is set to be completed by December 1.

Quote

Given these numbers are based on the streaming landscape in 2019, it's very possible that Disney will have to pay more than expected. Not only have Hulu's subscription numbers more than doubled since early 2019, but its original shows and content have become more critically and financially successful.

 

Unlike some of Disney's other large acquisitions in the media landscape, such as the aforementioned Fox acquisition, this move is unlikely to see any interference from entities such as the FTC given the conglomerate's already large stake.

 

Edited November 2, 2023 by Bosco685

[drotto]

On 11/2/2023 at 6:57 AM, Bosco685 said:

 

They actually lucked out a bit on this number, as $9 B was the initial low estimate, and some people were saying it could get over $20B.  Still not money they really have to spend right now, but not as damaging, and Hulu is profitable at least.  Still money that Comcast can use to hang them with.  How is that next next expansion to Universal studios parks looking? Heck build 2 of them. 

[paperheart]

On 9/26/2023 at 8:28 AM, 1Cool said:

Nobody is getting Disney+ to get Hulu.  Not saying Hulul doesn't have a few good shows and some value but the 60 billion price tag seems silly.

Different strokes… Watch Reservation Dogs, What We Do…, Only Murders… on Hulu. Last thing I watched on D+ was the GOTG holiday special a year ago.

[1Cool]

On 11/2/2023 at 11:14 AM, paperheart said:

Different strokes… Watch Reservation Dogs, What We Do…, Only Murders… on Hulu. Last thing I watched on D+ was the GOTG holiday special a year ago.

Good point.  I don't watch anything on Hulu but I watch all the Star Wars / Marvel shows that come out so it's got more value to me so I'm a bit biased.  Regardless - a valuation of $25 billion seems a lot more reasonable then the $60 billion that was being discussed.

[Bosco685]

On 11/2/2023 at 9:18 AM, drotto said:

They actually lucked out a bit on this number, as $9 B was the initial low estimate, and some people were saying it could get over $20B.  Still not money they really have to spend right now, but not as damaging, and Hulu is profitable at least.  Still money that Comcast can use to hang them with.  How is that next next expansion to Universal studios parks looking? Heck build 2 of them. 

The article mentions Disney may need to pay more since the price was based on 2019 subscription numbers. Should be interesting if that happens.

[media_junkie]

On 11/2/2023 at 11:52 AM, Bosco685 said:

The article mentions Disney may need to pay more since the price was based on 2019 subscription numbers. Should be interesting if that happens.

Yeah an article I read said the $8.6 billion was basically just a "holding fee".  A full on appraisal will be done in 2024 and Disney will have to pay the difference of the appraisal minus the $8.6 billion they are paying now.  So they could still end up paying quite a bit more.