PARQOR Monday AM Briefing #36

The stories and trends in OTT streaming you *need* to know for this morning & the week ahead

Good morning,

You are receiving this week’s Monday AM Briefing from Substack (and not Mailchimp) because I will be sending all PARQOR mailings from this Substack - parqor.substack.com - for the next two to three months (Apologies to readers of Mic Drop #16 for having to read this again).

Why?

The short, non-technical reason is because the existing WordPress backend for PARQOR.com is creating too many pain points and inefficiencies for me to list. With the saying, “never let a good crisis go to waste”, I am going to rebuild PARQOR.com.

How will this move impact you?

Positively, because you will get more content as part of this Substack subscription:

  1. The Monday AM Briefing

  2. Tuesdays or Wednesdays Member Mailings (the intro paragraphs, full access for members); and

  3. Friday Mic Drop

Also, a single destination for all mailings is easier for subscribers.

All PARQOR Members will be getting the full Member Mailings for free from this Substack as part of their paid subscription, for as long as they continue as monthly or annual Members. Members will now be able to read the entire mailing both in their email inboxes and online at parqor.substack.com

  • All Subscribers can manage their account at https://parqor.memberful.com/account.

  • All subscribers can upgrade to a Membership on Substack or on Memberful - I will honor both.

The heavy lifting will be on my end, managing paid Member subscriptions and any changes to Monday AM Briefing subscriptions .

My guess is if there is anything I will need to ask for your understanding and assistance with, it will be reconciling the back-ends of Substack and Memberful.

Lats, I created a coupon 90DAYS on both Substack and Memberful that will give a 33% discount for one year or $33.50/month, to any subscribers wanting to upgrade to Member Mailings.

A quick essay on Hulu after Q1 FY21

Disney’s Q1 Fiscal Year 2021 earnings brought us the news it is reaching 95MM subscribers (NOTE: I believed they would announced they crossed the 100MM threshold), and that its Average Revenue per User (ARPU) is trending lower, primarily because 30% of its user base is from India.

The other notable headline was Hulu SVOD’s quarterly growth, up ~11% to 35.4MM from 32.5MM in Q3. Why was it notable? Because it was lower than both Disney+’s growth (up 29% to 94.9MM from 72.7MM) and ESPN+’s growth (up 17% to 12.1MM from 10.3MM). But, it is growing.

On the one year anniversary of Hulu’s release of High Fidelity, it is worth taking note where Hulu sits at Disney. The reality is, Hulu is and will remain a U.S.-only service. There will be no global distribution of the Hulu app, or of original and library content owned by Disney via the Fox acquisition on Hulu. Instead, that content will be distributed globally through Disney’s new Star and Star Plus services.

Comcast still owns 33% of Hulu, and has the option to sell that share in 2024 at a total-company valuation of $27.5B or whatever Hulu is appraised at in 2024. That means, Disney is financially and strategically dis-incentivized to grow Hulu outside of the U.S., while Disney is incentivized to grow Star.

I focus on High Fidelity because it was the first of Disney’s adult streaming fare to go to market directly on Hulu. Despite a big star turn from Zoe Kravitz, critical praise, and some strong writing, High Fidelity was not renewed for a second season. As I wrote to Observer’s Brandon Katz in November for this article:

In Disney's hands, the production got caught up in a debate about how family-friendly Disney+ should be and which content should be distributed. It lost that debate, was distributed on Hulu instead, but the marketing never seemed to communicate why High Fidelity was a must-watch on Hulu's platform.  High Fidelity in Netflix's or even pre-Disney Hulu's hands probably would have had edited in post-production more for social sharing (which Hulu has): more GIF-able moments, more clips to share on YouTube, and more marketing of the characters so that social audiences identified with different characters as entry points. Neither Disney nor Hulu never communicated that it was fully invested in getting audiences engaged with the show, they didn't really engage with it, and it was not renewed for a second season. 

I don’t recall an instance of Netflix undermining the marketing of its own content (…but it’s not clear how we would know that if it ever happened?), and Netflix aims for wins or “big messy losses where we learn how to succeed better the next time” (as Co-CEO Ted Sarandos is quoted in Co-CEO Reed Hastings’ No Rules Rules).

But Netflix’s model is built to find audiences for its content, both on-platform and off-platform (“ubiquitous access”). This is true with content it did not produce but licensed after that content underperformed elsewhere (e.g., Her from Lifetime, Cobra Kai from YouTube Premium, and now Kingdom from DirectTV).

With Disney-owned adult content now being distributed on Star, one has to wonder whether High Fidelity will have a Netflix-like success story via Star, like Cobra Kai on Netflix. Meaning, High Fidelity will perform better because Zoe Kravitz may be a bigger star globally than in the U.S. because she has been in so many hit movies globally (Mad Max: Fury Road, Big Little Lies, Fantastic Beasts: The Crimes of Grindelwald, The Lego Batman Movie, The Batman (upcoming))?

We won’t have many data sources for High Fidelity’s performance on Star, except for social chatter, third-party analytics companies, and the trending section of the Star app. But if High Fidelity emerges in this section, it will offer two valuable signals:

  1. Disney has learned its lesson from the shortcomings of High Fidelity’s U.S.-only roll-out, and

  2. In addition to being at 50% of Netflix’s global scale with Disney+, it will also be closer to Netflix’s “ubiquitous access” model.

Must-Read Monday AM Articles

  • HBO Max content chief Casey Bloys gave an in-depth, must-read interview with The Hollywood Reporter about the programming strategy for Game of Thrones and DC IP. HBO Max announced it will launch in 39 Territories In Latin America in June 2021. It also unveiled its first two original Latin American productions for HBO Max: Argentine freestyle battle series Días de Gallos and Mexico’s Bunker, billed as a half-hour acid comedy. HBO Max also debuted a new generational drama follow-up to join Euphoria with a trailer for genera+tion.

  • Apptopia reported that Discovery+ outpaced HBO Max in first month of mobile downloads. Discovery+ announced a content and advertising partnership with Snapchat that will bring the best Olympics content and coverage from Discovery+ and the media giant’s Eurosport network to a new Eurosport Olympics daily show on Snapchat’s Discover platform (Free - registration required). Discovery also made an interesting move with its Magnolia app with Chip and Joanna Gaines, rebranding the Magnolia app into a direct-to-consumer platform that will be a hybrid of a streaming service, online shop and MasterClass-style workshops.

  • Business Insider dove into how OTT brands are trying draw attention on TikTok, by blending video ad buys, sponsored influencer posts, and uploads of their own clips and "sounds" to the accounts they manage on the app. ($ - paywalled)

  • Sports was a big theme in headlines last week. The Super Bowl fell to its lowest lowest numbers in 15 years, and issues with CBS All-Access left Front Sports Office to conclude, “CBS was not ready for its own Super Bowl blitz”. On The Athletic, Richard Deitch attempted to answer why Super Bowl viewership declined ($ - paywalled).

  • Disney CEO Bob Chapek told analysts over the earnings call that Disney is cautious about its willingness to pay huge fees for a new NFL TV rights pact as negotiations heat up between the league and its incumbent network partners and ESPN. TV Answerman’s Phillip Swann dove into how the bidding will play out for the first big deal to come up, DIRECTV’s exclusive deal to carry the NFL Sunday Ticket, after the 2022 season.

  • Lots of activity in the European football broadcast rights. Revenues from football’s domestic broadcast rights deals are expected to fall across Europe’s top leagues this year, due to a lack of competition between broadcasters. DAZN is leading the race for rights to screen Italy’s Serie A matches over the 2021-2024 seasons in a challenge to the country’s dominant pay-TV player SKY. And, La Liga and Amazon agreed to a distribution deal that will see the Spanish soccer league’s 24/7 English-language channel made available on Prime Video Channels in the UK.

  • DAZN has emerged with a renewed focus on expanding to the global market, and is looking to local and niche sports streaming rights is looking to local and niche sports streaming rights.

  • For the next Summer Olympics, NBC plans to pre-empt an entire day of programming on the opening day , offering a telecast of the early ceremonies as they happen live on July 23, between 6:55 a.m. ET and 11 a.m. ET. 

  • It was a big week in AVOD and CTV advertising. Fox CEO Lachlan Murdoch told investors he expects Tubi revenues to more than double and exceed $300 million in the current fiscal year. Last Friday, Tubi exclusively debuted 2020 Sundance selection "Beast Beast", in a move typically reserved for SVODS .

  • Mediapost offers “5 Reasons Why Apple's Limiting IDFA Is Very Good For CTV” (free - registration required), and Wired breaks down why banning ad targeting “may be the single best way to fix the internet”. London-based research firm Omdia reported that monthly active users increased for AVOD, but so did the frequency of viewing, highlighting a greater conversion rate to daily usage.

  • There’s a fun conversation going on over at the Dithering podcast and Daring Fireball about the future of Apple TV hardware. John Gruber has a good summary of it.

  • Last, Reelgood released an interesting chart about exclusive content on streaming services (below). Netflix is surprisingly high, Amazon is notably low (which makes its most recent Donald Glover, Phoebe Waller-Bridge Mr & Mrs. Smith series announcement particularly notable).