Can Netflix cointinue borrowing its way to success?

When Netflix was founded, the Internet was young, DVDs were popular and no one considered watching a movie streamed online.

Twenty years later, Netflix’s transformation from an underdog DVD-by-mail service to Hollywood powerhouse — one that has redefined how TV and movies are produced and consumed — has been remarkable.

The global streaming giant today boasts some impressive stats: 104 million subscribers worldwide, up 25% from last year and almost quadruple from five years ago. Its series and movies account for more than a third of all prime-time download Internet traffic in North America. Its more than 50 original shows garnered 91 Emmy Award nominations this year, second only to premium cable service HBO.

But there’s another set of numbers that could spell trouble for the company’s breakneck growth. Netflix has accumulated a hefty $20.54 billion in long- and short-term debt in its effort to produce more original content. The Los Gatos, Calif.-based company hopes more new shows will capture more subscribers, its primary revenue driver. It’s also under pressure to keep spending on new shows as streaming rivals such as Amazon and Hulu expand their own slates of original programming.

The result is that Netflix is burning through cash at a growing clip. The company is pouring money into expensive prestige projects and expects to spend at least $6 billion in content this year. Its net cash outflow this year is forecast to grow to as much as $2.5 billion, up from $1.7 billion last year. Reflecting its growth, Netflix recently moved its Southern California headquarters into a 14-story building in Hollywood.

So far, investors have expressed approval of Netflix’s spendthrift ways. They are betting that debt financing in the near term will create growth and yield big results down the road on the theory that you have to spend money to make money.

Netflix shares surged more than 10% this month after it reported better-than-expected subscriber growth. For the year, the stock is up nearly 50%. It closed Friday at $184.04, up $1.36 or 0.74%.

But some industry experts are warning of a Netflix bubble that may burst if the company fails to produce enough hit series to keep attracting new subscribers.

“Nobody is ever the dominant player forever,” said Mike Vorhaus, president of Magid Advisors, a media and digital video consultancy. “I think they’re going to need some luck in not drowning in debt in the ultimate slowdown of growth.”

Still, Netflix isn’t expected to dial down spending any time soon. The company’s strategy is to invest more and more on self-produced original series such as the ’80s-themed “Stranger Things” and the kid-centric “A Series of Unfortunate Events.”

The goal, executives say, is to increase the portion of self-produced originals to 50% of its slate in an effort to own more of the shows on its platform.

“That’s a lot of capital up front, and then you get a payout over many years,” Chief Executive Reed Hastings said in a recent investor call. “The irony is the faster that we grow and the faster we grow the owned originals, the more drawn on free cash flow that we’ll be.”

As a result, Netflix said it expects “to be free-cash-flow negative for many years,” meaning it will continue bleeding cash for the foreseeable future.

A big chunk of Netflix’s expenses goes to licensing TV series and movies. Many of Netflix’s most popular and acclaimed shows are licensed from other studios despite being marketed as “Netflix Originals.”

In fact, some of the best-known shows on Netflix aren’t made by Netflix. “Orange Is the New Black” is produced by Lionsgate, and “House of Cards” comes from Media Rights Capital, an independent film and TV studio. “The Crown” is a Sony Pictures Television production, while “Iron Fist” is a Marvel creation.

Netflix pays undisclosed licensing fees for the exclusive rights to stream these shows. And many of those fees are expected to rise over time as TV networks — which have grown increasingly wary of Netflix — look to protect their business from further erosion. A growing number of consumers are bypassing linear TV in favor of streaming services like Netflix.

Netflix is investing more money into self-produced originals in hopes of becoming less dependent on outside studios.

But bearish experts say building a catalog of must-see titles can take years, even decades, and requires an enormous cash outlay. HBO has created numerous hit shows, including “Game of Thrones,” but more than half of the content consumed by the cable giant’s subscribers is still licensed from its content partners.

Netflix is still fairly low on the learning curve compared with HBO, and its self-produced original series have had mixed success. Whereas “Stranger Things” quickly became a popular and critical hit, shows like “Santa Clarita Diet” and “The Ranch” have so far failed to generate much buzz.

“I don’t believe Netflix is going to get this right at a better rate than anyone else,” said Michael Pachter, a Wedbush analyst who has long been pessimistic about the company. He said his “underperform” rating on Netflix shares has been wrong in the past but believes the company’s lavish spending will eventually catch up to it.

“I think it is kicking the can down the road and a looming write-down is coming,” he said.

Netflix, which declined to comment, has been canceling more shows in recent months, including expensive series such as “The Get Down” and “Sense8.” But the company said it has renewed 93% of its shows and it continues to greenlight new shows at a rapid pace, with a growing emphasis on foreign titles to cater to its overseas markets.

For the first time, Netflix counts more overseas subscribers than domestic ones, with 52 million subscribers outside the U.S. Titles such as the movie “Okja” from South Korea and the series “3%” from Brazil are designed to appeal to both local audiences and viewers worldwide.

Wall Street treats Netflix’s subscriber growth as the key indicator of future health, and as the U.S. market gets closer to saturation, executives will be under greater pressure to seek new viewers elsewhere. But foreign subscribers are more expensive to acquire than domestic ones.

read more here:

http://www.latimes.com/business/hollywood/la-fi-ct-netflix-debt-spending-20170729-story.html

Facebook’s Premium Video Section Will Arrive in Mid-August

Facebook’s first efforts in premium video programming are almost here. According to Bloomberg, the social network will offer TV-style shows in a new video section in mid-August.

While this section will include user-generated content, as well, the highlight will be professional content. Facebook has commissioned several short-form series for the area, as well as long-form premium content. News broke in June that Facebook is bankrolling some of its lead-off programs with six-figure budgets.

Premium video will include Last State Standing, a reality competition show, and Loosely Exactly Nicole, which continues a show that originally ran on MTV. These large-budget shows won’t be available at the August launch, but the short-form commissioned series will. Facebook doesn’t plan to fund premium shows going forward, but did so this time to jumpstart the area.

Facebook’s goal with premium video is taking a share of the television industry’s $70 billion ad market. Viewers won’t be limited to computer viewing, as Facebook announced apps for a variety of connected TV devices—including Apple TV, Amazon Fire TV, and Samsung Smart TV—earlier this year.

Bloomberg reports the video area was originally scheduled to launch a month ago, but has been impacted by delays. Facebook currently has over 2 billion members.

Facebook Raked in $9.16 Billion in Ad Revenue in the Second Quarter of 2017

Facebook reported advertising revenue of $9.16 billion in the second quarter of 2017, a 47 percent increase over the same quarter last year.

In its quarterly earnings report released today, the social giant beat analysts’ expectations with a total revenue of $9.3 billion—an increase of 45 percent year-over-year. Mobile now makes up around 87 percent of the company’s overall ad revenue, up from 84 percent in second-quarter 2016.

Earnings per share for the second quarter totaled $1.32, up from 78 cents during the same period last year.

The company also reported an increase in both daily and monthly active users, with daily active users totaling an average of 1.32 billion in June for a 17 percent increase year-over-year. Monthly active users also increased 17 percent year-over-year to total 2.01 billion as of June 30. (Facebook officially announced last month that it had hit the 2 billion mark.)

“We had a good second quarter and first half of the year,” Facebook CEO Mark Zuckerberg said today in a statement. “Our community is now two billion people and we’re focusing on bringing the world closer together.”

Facebook also reported an overall growth in head count. As of the end of last month, the company had 20,658 employees—an increase of 43 percent year-over-year.

While second quarter earnings were plenty strong, it does show a bit of deceleration—the company reported a 59 percent increase in overall revenue between the second quarters of 2015 and 2016. That year-over-year deceleration falls in line with what a few notable agencies reported to Adweek late last month—slower growth in cross-client ad spend in the second quarter compared to previous years. (For years, the company has consistently reported an acceleration of revenue growth. Late last year, Facebook executives have warned that advertising revenue growth would slow, given the lack of room for ad load growth.)

Barclays Analyst Sees Massive Cord-Cutting in near future

As many as 31 million homes could cancel their pay TV accounts or simply trim services over the coming decade. While many in the industry see cord-cutting as a minor trend and believe pay TV subscriber levels will eventually plateau, one Barclays analyst says that won’t happen anytime soon. Quoted in Broadcasting and Cable, analyst Kannan Venkateshwar gave the 31 million figure, noting that some networks will decline even faster.

Alongside this, Venkateshwar sees skinny bundles doing well, with services like Sling TV, DirecTV Now, and YouTube TV picking up 17 million subscribers over the coming decade. Viewers trading higher-priced pay TV services for lower-priced bundles will lead to a $13 billion loss in affiliate fees.

In related news, a report from Leichtman Research Group, Inc. finds that 64 percent of U.S. households currently have subscription video-on-demand (SVOD) service from Netflix, Amazon, or Hulu. That’s up from 47 percent in 2014. Looking only at SVOD subscribers, 51 percent have multiple services.

People are subscribing more and they’re streaming more: 29 percent of adults stream from an SVOD every day, up from 16 percent in 2015. That number is far higher for young adults, where 51 percent of those age 18 to 34 stream from an SVOD daily. This data comes from the report Emerging Video Services XI, which surveyed 1,207 U.S. households.

Netherlands in Top-15 illegal views Game of Thrones

The return of Game of Thrones lst week smashed previous viewing figure records for HBO in the US, where it has been watched more than 16 million times through official channels. However, that figure pales into comparison when compared to the number of people who watched it illegally.

According to data from analytics firm MUSO, the first episode of Season 7, entitled Dragonstone, has been pirated 90 million times by users around the globe. The figure is nearly six times the official viewer count and is made up of illegal streams, through the likes of Kodi and torrents.

According to the data, MUSO says Game of Thrones Season 7 episode 1 was streamed 77.9 million times, downloaded from torrents using public trackers 8.3 million times and using private trackers 500,000 times. 4.9 million people viewed the episode via direct download.

“There is no denying that these figures are huge, so they’re likely to raise more than a few eyebrows in the mainstream industry, but it’s in line with the sort of scale we see across piracy sites and should be looked at objectively, Andy Chatterley, MUSO’s CEO and Co-Founder told TorrentFreak.

Countries with the highest GoT piracy activity, according to MUSO:

USA: 15,075,951
UK: 6,252,903
Germany: 4,897,280
India: 4,335,331
Indonesia: 4,286,927
Philippines: 4,189,030
Canada: 3,182,851
France: 2,881,467
Turkey: 2,802,458
Vietnam: 2,436,149
Australia: 2,241,463
Russian Federation: 2,196,799
Netherlands: 1,881,718
Brazil: 1,796,759
Malaysia: 1,737,00

Consumers unconvinced by Virtual Reality’s future

The BBC has revealed it undertook a research programme into VR encompassing market sizing, a mix of existing ‘media needs’ research and a longitudinal ethnographic study. The Corporation recruited teens and adults from across the UK who were interested in VR but had little experience with it, giving each of them each a mid-range mobile VR headset for three months.

For the first few weeks the users asked participants to play with the hardware every day, discovering VR experiences themselves, and trying suggested content which had previously been researched and found to be of superior quality. Participants also joined an online community to talk about their experiences.

The BBC visited them in their homes in the first two weeks, and interviewed them at weeks 8 and 14, part way through and at the end of the study.

The following blog post by Time Fiennes, Senior Market Manager, revealed the findings:

What did our participants think about VR before they’d actually tried it?

Those with prior experience of basic entry-level mobile VR expected to be underwhelmed; others expected VR to be a futuristic, shiny technology, but were not entirely sure of its sophistication. Unsurprisingly many associated it with gaming. A few were concerned about the experiences they were about to have – they had heard stories of getting nauseous, they didn’t want to look silly in front of friends and family – or indeed, get pranked by them!

In summary, new-comers to VR are unsure about what to expect and about the type of experiences they want to have. But they are excited, and their first experience didn’t disappoint…

How did participants react to their first experience?

We found our participants were equally enthralled and delighted. Their initial – fairly low – expectations were far outstripped in terms of the quality of the experience and the very nature of being immersed in virtual reality.

However, this in itself presents a nuanced marketing challenge. The industry has difficulty communicating what VR experiences are actually like. Given the wide variety of technology which can determine the nature and quality of experience, setting the right level of expectation for audiences such that they don’t come away underwhelmed is tricky.

What content were participants initially drawn to?

Generally participants wanted to get straight to experiences designed to get your blood pumping, things like horror, rollercoasters and other extreme experiences that had some novelty value.

What they were not doing was discovering a wide variety of other experiences available to them (more on that later).

We found that when we suggested particular pieces of content, the appeal of VR can go far beyond the novel and extreme, and that audiences can have profound experiences.

What impact did the VR experiences have on participants?

Participants loved VR which allowed you to:

walk in someone else’s shoes to better understand the world (e.g. experiencing what it’s like to lose your sight – Notes on Blindness).
experience something you wouldn’t normally do (e.g. sky-diving – although the novelty factor wore off quickly so it’s likely you’d watch these sorts of things a small number of times).
learn effectively (e.g. become microscopic and travel through the body to learn about anatomy – like the The Body VR);
remove all distraction, enabling focus on activities like relaxation.
This last type of experience threw out a few surprises. Our participants frequently came back to watching traditional 2-D widescreen content in a virtual cinema – i.e. watching traditional content on ‘the biggest screen in the house’. This was everything from long-form scripted content from popular VOD providers through to music videos on YouTube.

We know from broader media behaviour research that audiences will tend to seek out the best screen available when watching long-form video; however, whether a virtual big screen counts ‘as the best screen available’ given the resolution challenges devices currently have is questionable – it would certainly appear the largest though.

Our emerging hypothesis is that headsets provide audiences with a rare opportunity to engage with content utterly free from distraction. The rise of the smartphone being rarely away from one’s side means that it can often be challenging for audiences to be fully immersed in any kind of activity. A recent eye-tracking study from Facebook found that 94% of US consumers kept a smartphone to hand when watching TV. Headsets are a helpful blocker to being distracted by multiple mediums.

What are the other characteristics of content which worked?

From an industry perspective we are still developing the VR story-telling grammar around producing content that works.

By spending time with real people and talking to them about their experiences, we were able to pull out a few key insights into what got them excited and why.

First, leading the audience on a journey is crucial; experiences without a narrative or goal tended to fall flat – experiences with good story-telling or clear objectives worked well.
Second, making the most of the unique possibilities of VR. Playing with scale was particularly evident here – for example ‘The Body VR’ shrinking you to a cellular level. Presence and embodiment were also important asthe viewer must feel ‘there’ to be immersed. For example, a Cirque du Soleil experience resonated because the characters made plenty of eye contact with the viewer.
Third, recognising the risk of cognitive overload: audiences need time to process and understand what is happening around them before being able to follow a narrative. When and where to draw their attention is also fundamentally important.
Experiences that do these things well can blow audiences away and provide a real depth of emotional engagement.

The challenges…

So, to recap the story so far: audiences are excited, albeit uncertain about the prospect of the new technology; they love having adrenalin-fuelled experiences to begin with, but the novelty can dissipate fast; content with a clear narrative that thinks about the audiences’ experience is crucial; and there’s an opportunity to have a real world impact, and to add value to people’s media routines.

However, we’ve identified four challenging areas that need to be kept in mind when assessing the opportunity VR presents. These are:

The occasion in which VR will be used.
The hardware.
Discovery of content and the current poor user experience.
The play-out.
There are evidently a range of behavioural barriers to overcome before VR will be habitual. These include:

Safety and security – some audiences were concerned about being shut-off from what’s happening around them.
Social norming – some were anxious about feeling stupid in front of friends, or self-conscious about their appearance, hair and make-up.
Physical space – often audiences weren’t in the right physical situation – sitting down on a sofa after a long day or lying in bed is not conducive to an experience which necessitates turning around and looking behind you.
Proximity of headset – the headset needs to be conveniently available. Many of us will have hundreds of potentially entertaining distractions in our homes; however, it will tend to be the ones which are the most visible / proximate / easy to engage with which we use. If a headset has been put away on a shelf, in a cupboard, or under a bed, it will not be front of mind.
Social interaction – for some audiences the insular / individual nature of the experience was off-putting as they preferred connecting with others either digitally or in physical space.
This underlines how the issue of how VR integrates into real lives in the home is of great importance. To overcome this the VR industry needs to give care to making seamless experiences in occasions and settings that are appealing to audiences.

The hardware

If you have decided you want to try some VR, you have found your headset, you’re in a social situation and geographical context you feel safe, you then have the hardware to contend with:

Often the headsets or the screens of the phone will be dirty – if not cleaned this will significantly diminish the quality of the experience, blurring or obscuring the images.
The phone must be charged: headsets are often used at the end of the day – after school, college or work, often when the phone is low on power.
Then of course you have to find something to consume

If you haven’t used your headset for a while, you might forget how to use it – many of our participants found the user interface to be tricky in any case.
Often the way to navigate around various VR environments differs from app to app – adding to frustration.
The way in which content is then presented to audiences is a challenge. We found that when our participants were left to discover content themselves, they rarely ventured out of the main app; by themselves they found very little of the high quality content we had given them. Their discovery was mostly limited to gimmicky, adrenalin-focussed and games-orientated experiences, resulting in the novelty factor wearing off quickly.
Audiences need to be exposed to content they might not automatically choose to expand their range of tastes in VR. There is room for intelligent content curation from trusted brands which takes into account the different usage occasions, the different types audience needs, and the goal of expanding VR beyond novelty experiences for audiences.

Once participants had found something to consume, the play-out also caused problems

Many handsets overheated after 30 or so minutes of usage.
Variable Wi-Fi quality leading to poor content resolutions and slow download speeds was also limiting.
The content itself

The industry is obviously still learning, but there is a risk of sub-par experiences flooding the market and turning audiences off the idea of VR altogether. We found that much of the content available didn’t add any value over and above consuming the same sort of thing on a TV screen.

A typical comment was “If the content could have been just as easily consumed on a TV screen, why go the effort of watching it immersively?”

For the occasion to be worthwhile, the content must be a special experience that could only have been conveyed in VR and not through any other media.

Thoughts for the future

VR in-home entertainment definitely has massive potential. Headsets will get cheaper and more content will be made. Some content will have substantial impact. These are potentially great things for creators, the public service and the audience.

But when thinking about the audience first, we’ve seen there are some challenges that need to be addressed for VR to realise its potential. For VR to be successful it needs simple, intuitive and consistent interfaces, better curation and content discovery, and a higher supply of quality content which is ‘worth the effort’.

When experiencing problems, audiences don’t particularly care if it’s the hardware, the software, the content or anything in-between that causes a glitch. They just want good experiences and become frustrated when this isn’t possible.

This is exemplified in how our participants responded at the end of the 14 weeks, upon giving the hardware back to us – when asked “Would you now go and buy a VR headset”, they said that with the current mix of content and difficulties with the hardware they would not, but may consider it in the future.

Many of you will recognise this hype curve showing the typical cycle of new technology. But it isn’t a given that all technology becomes mainstream. Think 3D TV.

When thinking about VR in-home entertainment, there could be another trough of disillusionment if we don’t address these challenges.

This is clearly a challenge for the VR industry. Hardware, platforms, and content creators need to be aware of the limitations of technology, but also of the real world context in which audiences will be interacting with VR. This sounds straightforward, but in the fragmented VR landscape, there are a variety of experiences and it’s not clear this is going to be solved automatically.

read more here:

http://advanced-television.com/2017/07/21/bbc-study-consumers-unconvinced-by-vr-future/

How Emerging Sales Channels Complicate Account And Campaign Management

– by David Hills, managing director of strategy at The 614 Group.

There’s no place where complexity and the need to innovate is starker than at the intersection of campaign and account management.

As publishers increasingly use new and different sales channels, each requires different approaches to managing customer satisfaction and reporting in a way that demonstrates that publishers understand and respond to customer needs.

Campaign management is the management of ad pacing, quality and performance at the campaign level to meet client KPIs. It is often performed by campaign management or ad ops teams.

Account management is the overarching management of the agency or client relationship with the goal of generating revenue. Often defined as a sales function, account management is the reporting of campaign results and using customer feedback into inform future campaigns as part of a productive cycle of effort, reporting and interpretation.

What’s changed is the shift from two sales channels to a multichannel world. Publishers’ direct sales forces have long promoted their brands to customers and set the table for how they want the brand to be perceived by customers. That’s the traditional channel that most are expert at selling through, delivering satisfaction and reporting back on.

Years ago, when publishers sold their fill of direct, they’d simply backfill the rest with networks, which was the second sales channel. The network channel didn’t require much in the way of optimization or account management, so publishers focused on the direct channel, where they could tell their story, deliver good value and report back on it.

That’s not the case anymore. Both complexity and opportunity are exploding. Private marketplaces, header bidding and new formats continue to proliferate.

Each channel has distinct needs for managing campaigns and reporting results.

Publishers continue to use traditional direct sales to establish their brand value. Publishers demonstrate value by managing campaigns toward multiple KPIs and quality measures. Account management will continue to reinforce the brand value of audiences and report back on various KPIs and quality measures.

That’s quite different from PMP business from both a campaign and account management perspective. This sales channel introduces distance between publishers and customers that doesn’t exist in direct sales so publishers must bridge that distance through performance and reporting.

Since a PMP is a discrete allocation of audience and inventory, publishers need to focus on getting it to perform and ensuring customers are buying as much of it as possible. Campaign management is different in PMPs since KPIs and quality measures, such as viewable inventory, can be designed into the PMP. Campaign managers can focus on pushing KPI performance harder. Account managers can then report back on that and let the buyer know they could actually buy more of the PMP, using a share-of-voice calculation.

With header bidding, publishers supply a series of access points to audience and inventory. While we might think about header bidding as a replacement for a network waterfall, I think there’s a proactive way to manage campaigns and accounts here, though it’s subtler. The goal of header bidding is to get relevant fill at increasing prices. Campaign management here largely involves optimizing utilization rates, not having one demand partner dominate the header and increasing the rate paid over time.

While it might not be apparent that there’s any account management to be done with header bidding, I’d submit that as publishers better understand which combination of demand partners work best for them, there’s an account management opportunity. Here, simple emails or phone calls can call out to a partner that they’re losing opportunity to other partners. I think publishers provide a service to partners when this is done; if publishers give partners the chance to understand there’s more the partner can effectively spend with the publisher, there’s likely a better yield paid by the partner.

read more here:

https://adexchanger.com/the-sell-sider/emerging-sales-channels-complicate-account-campaign-management/#more-113592

Hulu boosts content, cuts out the middleman!

Hulu on-demand just got a massive boost to its library from Fox, and Live can now distribute HBO and Cinemax. Do Hulu’s broadcast owners need pay TV to distribute their content anymore?

The launch of Hulu Live in May of this year brought another strong competitor to the virtual MVPD market pioneered by Sling TV. The slick integration between the on-demand content from Hulu with live TV and DVR’d shows caught the markets attention immediately. It also offers solid consumer value with 59 channels for $39.99 a month. However, until now consumers could not access premium channels through the service.

Last week, Hulu announced that subscribers to Live and on-demand packages can subscribe to HBO for $14.99 a month and Cinemax for $9.99. Customers will get access to HBO’s and Cinemax’s East and West Coast live feeds through service. The many other live channels will become available in the coming weeks, including channels like HBO 2, HBO Latino, and MovieMAX HD.

Of course, this nothing new. Sling TV, DirecTV Now, and PlayStation Vue also allow customers to subscribe to HBO and Cinemax. However, Hulu Live offers a nice bonus. Customers will be able to access HBO’s own branded service, HBO Now, through their Hulu account.

Fox boosts Hulu on-demand library

Hulu announced a deal with one of its investors, Fox, that brings a huge library of TV content to the on-demand service. 20th Century Fox Television is licensing 3,000 episodes of 26 shows to Hulu. Recent shows like Bones, How I Met Your Mother, and Glee join classics like Hill Street Blues and The Mary Tyler Moore Show. Hulu will also be the only site with all 11 seasons of M*A*S*H and all episodes of NYPD Blue.

Last week Hulu completed another deal with 20th Century Fox Television. It added all episodes of animated series Bob’s Burgers, American Dad, Futurama, and The Cleveland Show.

Market progress on all fronts

Hulu on-demand continues to grow strongly with the overall market for SVOD services. According to TiVo/Digitalsmiths data, 6.2% of US consumers were using Hulu in Q1 2015. By Q1 2017, 7.8% of consumers reported using the service. The company has also retained its position as the third most popular SVOD service. Amazon is the second most popular with 18% of consumers saying they use it in Q1 2017, and Netflix is number 1 with 36%.

There is one area where Hulu is number one: Hulu viewers watch more video on the service than any other. According to comScore, Hulu viewers watch 2.9 hours a day versus 2.2 hours for Netflix, and 2 hours for Amazon. comScore also says the virtual MVPD side of the house, Hulu Live, is driving a lot of viewing. Hulu Live delivers 9% of total time spent watching all the vMVPDs, despite being only a few months old.

read more here:

http://www.nscreenmedia.com/hulu-live-boosts-content-cuts-middleman/

Viewers Will Stream 47 Minutes of Video Per Day in 2017

Global viewers will average 47.4 minutes of online video viewing in 2017, forecasts media buying agency Zenith. That’s up from 39.6 minutes the previous year. Nearly all of that increase will come from mobile devices, where online video viewing will grow 35 percent to 28.8 minutes per day. Looking ahead, it should grow another 25 percent in 2018 and 29 percent in 2019 thanks to an increased use of mobiles, better screens, and faster mobile connectivity.

Viewing time on non-mobile devices (including connected TVs, desktop computers, and laptops) will grow only 2 percent in 2017 to 18.6 minutes per day. Within that area, Zenith sees connected TV streaming time rising, while desktop and laptop viewing times are decreasing. Viewing times on non-mobile devices will actually shrink by 1 percent in 2018 and 2 percent in 2019.

This data comes from Zenith’s Online Video Forecast 2017, and includes all online video sources such as video sharing sites and subscription services. In 2019, mobile devices will make up 72 percent of all online video viewing, Zenith says, up from 61 percent in 2017.

All this video viewing will lead to an increase in advertising on streamed video. Zenith predicts the global online video ad market will reach $27.2 billion U.S. this year, an increase from 2016’s $22.2 billion U.S. It should grow by 21 percent in 2018 and 17 percent in 2019, reaching $38.7 billion U.S.

Netflix breaks 100M customers, here are the details

Netflix broke two barriers in its stellar Q2 2017 results: the company crossed the 100 million subscriber barrier, and International subscribers now exceed domestic. The company will keep the peddle-to-the-metal on growth but doesn’t plan on using SVOD aggregation as a tool to keep up the pace.

The Q2 2017 results

Netflix added just over a million US subscribers and 4.1 million international customers in Q2 2017. This is a remarkable achievement in a quarter that is typically slow for the company. In the same quarter in 2016, the company added just 200,000 US subscribers and 1.5 million international customers. This performance was well ahead of the company’s own guidance for the quarter.

This quarter marks two landmark achievements for the company. For the first time, International streaming customers outnumber domestic subscribers. Netflix finished the quarter with 51.9 million U.S. subscribers and 52 million outside the U.S. The company also broke the 100 million streaming customer barrier for the first time, finishing Q2 with a grand total of 104 million.

International remains the content focus

Understandably, Netflix remains keenly focused on foreign markets when it comes to original content creation. However, there is a schizophrenic ring to the approach the company is taking. Ted Sarandos, Netflix’ Chief Content Officer, talked about how creating local content can be an excellent way of driving global viewing:

“We make a fantastic movie for Korea but it’s an even bigger story that the movie is getting watched by millions around the world.”

He later admitted that approach doesn’t always work, particularly in Asian markets.

“We have to get better and better at matching those tastes and those tastes are not as easily aligned with Western tastes.”

Clearly, the company is searching for a balance between creating local content with a global audience, and local content with a strong local appeal. Reed Hastings, Netflix CEO, said the company still had a lot to learn in Asia. None more so than in China, where the company has decided not to release Netflix. Rather, it is looking to partner with Chinese companies for the distribution of its original shows.

Growth with its own original content remains the focus

Mr. Hastings continues to focus on growth, rather than profits, as the chief motivator for the company. Though he said the company is now streaming 1 billion hours of content a week (that equates to roughly an hour-and-a-quarter per day per subscriber,) he feels the company is still lagging other video providers.

“We’re such a small player in our viewing compared to linear TV, compared to YouTube. We’ve got a long way to go to have more content to please more people.”

Mr. Hasting was asked about the threat that Amazon posed to Netflix, particularly in markets like Germany where Amazon has a substantial lead over Netflix. As usual, he didn’t accept that Netflix and Amazon were necessarily competitors. He feels there is room for both companies.

read more here:

http://www.nscreenmedia.com/netflix-q2-2017-breaks-100m-customers-international-leading/