The disappointment of ‘House of Cards’ and its final season

It seems like Netflix’s “House of Cards” had a real opportunity for a fresh start with season six.

Granted, the behind-the-scenes turmoil probably made this season particularly challenging: Production was already underway when “Star Trek: Discovery” actor Anthony Rapp came forward with allegations that Kevin Spacey made a sexual advance towards him when Rapp was only 14. In response, Netflix and production company Media Rights Capital halted production and ultimately decided to rewrite the season without Spacey’s character Frank Underwood.

If you’ve watched “House of Cards,” you know that this must have been a big change, since Underwood and his political schemes have been at the center of the show for five years. Still, the previous season ended with Robin Wright’s Claire Underwood taking over the presidency, so it seemed like the right time to rethink this as a show that’s centered on Claire.

What we got, however, was a season that’s still very much about Frank Underwood. Sure, he’s died offscreen before the season starts, and Spacey never appears in these new episodes. But he still casts a long shadow over the show, with all of the characters focused on the mystery of his death and the power vacuum he left behind. On the latest episode of the Original Content podcast, we try to explain why we found this approach so unsatisfying.

In addition, we talk about the death of comics legend Stan Lee and Hulu’s plans to create multiple series based on “Wild Cards,” a set of superhero stories edited by George R.R. Martin. This, in turn, leads us to the question on every “Song of Ice and Fire” fan’s mind: When is he going to finish the next book?

listen here to the poadcast:

Netflix ‘on course’ to pass 10 million subscribers in UK

Netflix is on course to pass the 10 million-subscriber mark in the UK by the end of this year, according to research by MTM.

According to MTM, some 1.1 million consumers intend to subscribe to the service by the end of this year, taking the service’s total past the 10 million subscriber mark.

MTM says that Netflix subscribers are among the most satisfied users of SVOD services in the UK with 88% claiming to be satisfied, the highest rating for any subscription TV or video service. This means that churn levels for the service are a less significant challenge than for other SVOD offerings.

According to MTM, Netflix’s integration as part of the Sky Q offering could support further growth for the SVOD service, with 200,000 current Sky Q users looking to subscribe to Netflix by the end of 2018.

MTN says that the ability to easily access Netflix’s service on the primary TV screen will likely increase Netflix’s share of overall viewing within Sky Q homes, pointing out that 31% of all cable operator Virgin Media’s homes with Tivo advanced TV set-tops currently access Netflix via their set-top box.

According to MTM’s ScreenThink market research tracker, based on a survey of over 3,000 UK online users, almost 25% of internet users say that services such as Netflix and YouTube are the first services they turn to when looking for TV or video content, rising to 39% of 16-24 year-olds.

Conversely, 54% of UK pay TV subscribers now believe that their TV service is overpriced, and 1 in 4 are thinking about cancelling their subscription.

“The most recent ScreenThink study provides a fascinating snapshot of a market in transition, demonstrating the significant impact of Netflix and other OTT video services in the UK market,” said Jon Watts, managing partner at MTM.

read more here: digitaltveurope.com

Netflix plans $2bn debt raise to fund further content growth

Netflix, which last week beat Wall Street expectations to post a strong third quarter rise in subscribers, is planning to raise $2bn through a bond offering to fund further content growth.

The funds will be used to acquire content, as well as develop and produce, the area Netflix is most interested in as it continues to build a war chest of original material.

Netflix expects to spend $8bn on content in 2018, and previously announced plans to increase the number of original titles by 700 this year. Stranger Things and The Crown are among its most popular original titles as the company races to build a stable that will overshadow the content creation ambitions of the likes of Amazon Studios and Apple.

Monday’s move follows recently announced fundraising plans by Netflix to the tune of $1.9bn last April, and $1.6bn back in in October 2017.

The announcement had little bearing on share price, which dropped to approximately $330 by mid-day on Monday. Moodys Investor Service gave the streaming giant a Ba3 junk bond rating. The service qualified that by attributing a “stable” outlook to Netflix, based on the latter’s strategy of greater original content delivered directly to customers across a global network.

Netflix has a famously heavy debt load – last month it reported $8.3bn in long-term debt, and total liabilities are understood to exceed $30bn – and acknowledged the scale of its content investment to shareholders last week, adding that they would drive growth in revenue and operating profits for a long time.

read more here: www.screendaily.com

Netflix faces subs losses if it includes ads between shows

Just as the SVOD leader confirmed that it has begun testing the idea of inserting promos for its shows and movies between episodes of current programme, Hub Entertainment Research warns that Netflix could face steep subscriber losses for such actions.

In its study, The Future of Monetisation, the analyst gauged consumer reaction to alternatives to the Netflix pay model status quo, including possible price increases and an ad-supported plan. It conducted its survey among 1,612 US consumers with broadband, who watch at least an hour of TV per week.

The overwhelming conclusion was that the subscription video-on-demand faced alienating its customers substantially, especially if ads were included without a reduction in monthly fees.

Hub found that if Netflix raised the fee for its current, ad-free service by $5 or more per month, about a quarter would consider dropping their subscription. A $2 increase would have just a marginal impact with only 8% saying they’d cancel, while at a $5 boost, 23% say they’d drop their subscription and this figure would rise to 28% at a increase of $10 or more.

Looking at scenarios of what would happened if Netflix began including ads during shows, about a quarter of current subscribers said they’d definitely or probably drop the service. Just 41% said they’d definitely or probably keep their subscription, with 37% undecided.

Hub also investigated what would happen if Netflix content included ads, but the subscription fee were $3 less per month. It found that subscribers would be more likely to keep the service, but that losses could still be significant. In this scenario, 16% said they’d cancel their Netflix subscription if ads were included while half of the sample said they’d keep their service under this scenario, but just 25% say they’d definitely keep it.

read more here: rapidtvnews.com

Disney Reveals Fresh Details of Netflix Killer

Disney’s chairman and CEO Bob Iger has revealed fresh details around the media giant’s upcoming streaming service, touted to be a competitor to the likes of Netflix and Amazon Prime. Iger, speaking on a conference call after Disney’s Q3 financial results, spoke of the “tremendous potential” he sees in Disney’s direct-to-consumer services, particularly following the company’s acquisition of 21st Century Fox.

Disney’s earnings themselves were slightly disappointing, with quarterly revenue of $15.2 billion falling short of analysts’ $15.4 billion expectations. Investors on the subsequent earnings call however were much more interested to hear further information about the company’s in-development streaming service, which Iger said is “on track for a late 2019 launch”, and described as the company’s “biggest priority of the 2019 calendar year”.

Iger said he believes the addition of Fox’s portfolio of content will help make Disney’s streaming service “even more compelling for consumers”. The company already had quite a formidable content catalogue before the acquisition, bolstered by the takeover of studios including Pixar, Marvel and Lucasfilm. The Fox purchase will bring brands such as Searchlight, FX, National Geographic and 20th Century Fox Film under Disney’s roof, adding more variety to content that could be available in Disney’s streaming service.

Iger emphasised that integration of Fox properties into Disney’s direct-to-consumer strategy won’t come at the expense of the movie theatre experience. “We’re obviously very excited to leverage the Fox assets to enhance and accelerate our DTC strategy, but I want to be clear that we remain incredibly supportive and enthusiastic about the movie theatre experience,” he said.

In the Q&A section of the call, investors and analysts were hungry for more specific detail about what Disney’s strategy for its streaming service will be, with Iger giving fresh insight into the company’s plans for the service..

When asked about Disney’s decision to split content over multiple streaming platforms, Iger said the company prefers to offer narrower packages of content at a cheaper price, as opposed to a more Netflix-like model which offers a very wide library of films and TV shows. Disney’s acquisition of Fox will grant it a 60 percent stake in Hulu, and the launch of ‘Disneyflix’ alongside the existing ESPN app will mean content is spread across three different services, but Iger believes this reflects consumers’ desire to pick and choose which content they have access to.

“Rather than one, let’s call it, gigantic aggregated play, we’re going to bring to the market what we’ve already brought to market, sports play,” said Iger. “I’ll call it Disney Play, which is more family-oriented. And then, of course, there’s Hulu. And they will basically be designed to attract different tastes and different segment or audience demographics.”

Iger also shed light on how the company plans to handle issues around existing licensing deals for some of its content. As Sanford Bernstein analyst Todd Juenger pointed out, popular film franchises like Star Wars and the Marvel Cinematic Universe are already tied into distribution deals with other streaming services.

Iger confirmed that some content produced by Disney-owned studios won’t be available on Disney’s streaming service, at least initially, with Star Wars: The Force Awakens for example being unavailable due to an existing distribution deal. He said however that in some of these deals, there will be opportunities down the road to put those films on Disney’s service, and that any content produced from 2019 and beyond will be unencumbered by any such deals. “What we have been doing is making sure that since the time that we made the decision to bring the service out, we’ve not done anything that further encumbers any of our product,” he said.

read more here: videoadnews.com

‘Netflix has killed Canalplay’

Appearing before the French Senate’s commission of Culture and Communication, Maxime Saada, chair of the Canal+ board, has announced that SVoD service Canalplay will cease operating in the coming weeks.

“It’s over for Canalplay. In the last two years, we have been taken off the map in this market which is surplanting television. We had a French Netflix, it was killed,” said Saada.

The platform has seen subscriber numbers plummet from 800,000 to just 200,000 today.

“We were deprived the possibility of exclusives for Canalplay when Netflix stepped into the market,” Saada added.

Giving the example of the upcoming launch of a Studiocanal channel in the US without local hits Versailles or The Bureau, Saada urged the French State to re-examine the production decrees in order to allow French TV groups to own the rights to the drama series they’re investing in.

“We [are bound by] a ball and chain when competing with hegemonic US players such as Netflix, which is recruiting 100,000 subscribers each month in France, and investing billion of dollars into content.”

Saada pleaded for French production players to be helped and protected by new, fairer rules. He suggested that tackling piracy could represent 500,000 new subscribers and an additional €40 million to invest into the country’s movie industry and sports rights.

On the fact that Canal+ lost the rights to the French Football Ligue 1 (to Spanish group Mediapro), Saada also put forward the question of rights sovereignty.

Cordless TV streamers prefer Amazon Prime Video to Netflix

New comScore data shows one-third of TV streamers are cordless. It also shows that cordless Amazon Video users watch 13% more than Netflix users. The difference is all in their content strategies.

Cord-cutter and cord-never differences

According to comScore, one-third of households streaming to the television are cordless. The other two-thirds have either cable, satellite, or telco pay TV services. The cordless group is broken into two broad categories: those that had pay TV and got rid of it (18%) and those that have never had pay TV (14%.)

The cord-cutter group primarily skews older than the cord-never group. The largest group of cord-cutters comes from the 35-44-year-olds, with 23%. 21% of cord-cutters are millennials (18-34-year-olds). Millennials dominate the cord-nevers. 24% of 18-34-year-old TV streamers have never had pay TV, versus 15% of 35-44-year-olds.

Cordless favor Hulu, YouTube

Hulu has the highest percentage of cordless subscribers of the top four online video services. Hulu subscribers make up almost half of those without pay TV. 41% of YouTube users are cordless, and 37% of Netflix and Amazon Prime Video are cordless.

Cordless Hulu users also watch a lot more online video on their televisions. They watch, on average, 86 hours per month and stream to the TV 21.6 days per month. Cordless YouTube users watch 78 hours per month and stream to the TV 19.8 days a month. Surprisingly, Amazon Prime Video users best Netflix in engagement among the cordless users. Amazon users watch 70 hours and 19.8 days per month, Netflix users watch 62 hours and 18.6 days per month.

The comScore data could suggest that, though the cordless group rejects pay TV, they are not rejecting traditional television. They will continue to hear about great TV shows through the social and traditional media and around the water cooler. Moreover, when they hear about a great show, the place they are most likely to find it online is Hulu.

Why cordless Amazon users watch more than Netflix
Another interesting question is why those cordless TV streamers using Amazon watch significantly more (12%) than those using Netflix. This fact is particularly interesting given there is a large overlap between the two groups.

The viewing difference stems from the different content business models used by both companies. Amazon provides a far greater variety of content than Netflix because it resells other SVOD services through its Channels program. It also rents and sells movies through the Prime Video app. According to Ampere Analysis, consumers could access 26,000 distinct movie and TV show titles through Amazon Prime Video as of February 2017.*

read more here: nscreenmedia.com

Netflix Uses Data to Drive Creativity, and It Terrifies Hollywood

“There’s a whole thing going on in Netflix right now and in Silicon Valley saying, ‘We’re going to use algorithms to make creative decisions.’ I say ‘posh.’ You can’t. It’s not like making a computer program that can work in the fixed and formal rules of chess.” —John Landgraf, CEO, FX Networks

Is big data a help or a hindrance to creativity? I had the chance to explore the topic with Michael D. Smith, a professor of information technology and marketing at Carnegie Mellon’s Heinz College and Tepper School of Business and the author of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment, cowritten with Heinz College professor Rahul Telang.

Netflix has a lot of data about what we like to watch. It began collecting data years ago, when it was in the business of sending DVDs through the mail. It turned to that data when it began commissioning original movies and series. It was able to make smart decisions about what genres, directors, and actors we wanted to see, and how to fund each project based on expected viewership.

That approach has led to some critics, like FX’s Landgraf, accusing Netflix of programming by algorithm, of replacing intuition, experience, and Hollywood know-how with a computer routine. To critics, the Netflix formula produces hollow results and ignores the value of the creative process.

What Smith and Telang show in their work is that Netflix doesn’t use data for creative decisions; it uses data to match content with viewers. Netflix is excellent at getting out of creative peoples’ way, Smith says. Unlike studios, it lets its talent do its work without a lot of notes or advice. When projects are completed, it uses its data to match them with viewers who will mostly likely enjoy them.

Doing so not only drives views, it also helps with discovery. Netflix churns out a lot of original content, and subscribers could easily feel overwhelmed if they had to wade through it all. But they don’t—they only see the titles Netflix is pretty certain they’ll like.

It’s something the big broadcasters can’t do, Smith notes. Broadcasters can only show one program at a time, so they go with whatever they expect to get the biggest return in each slot. Netflix doesn’t have to turn every show into a blockbuster, so it’s free to create niche hits that appeal to specific groups. The power of Netflix’s data is in microtargeting.

With that in mind, Netflix’s four-picture deal with Adam Sandler starts to make more sense.

Hollywood creatives have been surprisingly vocal about their dislike of Netflix. Consider that Steven Spielberg joined the Netflix hate squad in March, saying Netflix output should be considered TV movies and not be eligible for Oscars.

Some of this comes from wanting to protect the traditional theater model or the glamour of a theater opening. Some people look at Netflix’s data and think it has an unfair advantage.

“Netflix can do things that would be very difficult for Hollywood to copy,” Smith says. “There’s a quote that we use in the book where [Netflix chief content officer] Ted Sarandos is sitting around a table of TV execs and he says, ‘The difference between my business model and everybody else here is that we can hit singles and doubles and the business is just fine.’ I think what he’s saying is the traditional business of Hollywood is, blockbusters are everything. You’ve got to have the blockbusters. It’s hard to sell a piece of niche content in any of the existing channels. What Ted Sarandos is saying is that we can sell niche content. If I can find an audience who likes this and is going to subscribe next month, it doesn’t have to be a big audience. I just have to be able to find them.”

In the 2018 Oscars, Netflix had two big winners, Mudbound, which was nominated for four awards, and Icarus, which won best documentary feature. Both were movies Netflix acquired rather than commissioned, but the company still used its data to find each an audience (after brief theatrical runs). Some Academy members were vocal about not wanting to vote for a Netflix movie.

While studios condemn Netflix’s business model, they’re doing their best to reproduce it. The mergers and acquisitions we’re seeing these days are all about major media companies trying to own customers’ data so they can serve targeted content the same way Netflix does. Models are changing, and studios see they’re at risk if they don’t own the data, so there’s a race to best serve the viewers.

read more here: www.streamingmedia.com

2018 Will Be Netflix’s Best Year (yet)

Netflix’s growth, especially outside the United States, has been so robust that some analysts had to change their outlooks. “These forecasts are a lot higher than the last edition of this report,” says Simon Murray, principle analyst at Digital TV Research, of his Netflix Forecasts report. “Similar to many other analysts, we underestimated the fast take-up in international markets.”

That fast take-up suggests Netflix will have its strongest year ever in 2018 as it adds 28 million subscribers. Its growth should slow after that, Digital TV Research believes.

By the end of 2023, look for the SVOD leader to count 201 million subscribers around the world. That’s up from 111 million at the end of 2017. By the end of 2023, North America and Western Europe will make up 62 percent of Netflix’s customer base. That’s down from the 76 percent they made up in 2017 thanks to surging demand in other countries. For example, look for the Asia Pacific region to make up 14 percent of Netflix’s base by the end of 2023.

“Netflix expanded to 130 more countries (notably excluding China) in January 2016 to bring its total to 190 countries.” says Simon Murray, principle analyst at Digital TV Research. “The 130 new countries will have 40 million subs combined by 2023, quintuple the 8 million at end-2017. The 2023 figure corresponds to 20 percent of Netflix’s global total; up from only 7 percent in 2017.”

As for revenue, look for it to grow from $11.3 billion in 2017 to $28.8 billion by the end of 2023. Of that, $11.2 billion will come from the U.S.

Netflix Q1 exceeds expectations

Netflix’s Q1 numbers show that the OTT operator is growing as fast as ever. It added a net 7.4 million global subs during the quarter, only slightly down on the previous quarter’s record-breaking 8.33 million.

US new additions were also healthy at 1.96 million. Overall, this latest quarter year were the second-biggest ever, and the quarter-year exceeded all consensus expectations, and to a total of 125 million subs. International operations now generate 50 per cent of revenues, and 55 per cent of its subscribers.

Netflix generated $290 million (€234m) net income on revenue of more than $3.7 billion. That compared to net income of $178 million and revenue of $2.63 billion during the previous-year Q1 period.

Netflix’s CEO Reed Hastings and Chief Content Officer Ted Sarandos took the analyst call with Benjamin Swinburne of investment bank Morgan Stanley, and confirmed that they would be spending “upwards” of $8 billion this year on content.

As to the recent bundling of Netflix into the pay-TV operations of Comcast and Sky, Gregory Peters, Chief Product Officer, said: “We love the fact that we can work with these partners to access whole new groups of consumers, make it easy for them to find out about Netflix, to sign up and have a great way to access the service and watch more and more. So you’ll see us leverage that sort of evolving strategy not only in the markets that we’ve been in for many years, but also in these new markets.”

Netflix confirmed that it will be launching a dedicated service to mobile phones. Peters said: “We definitely want to have a mobile experience which allows us to access more of that market and access a group of consumers who basically only want to have their relationship with Netflix on a mobile device. And so whether that is making sure that our apps are lightweight enough so they load really quickly and have a great experience there, to making sure that our encoding is very, very efficient, so that even if you have a less-than-great network connection, you can still get a really incredible video experience on that mobile phone.”

read more here: advanced-television.com