If you needed any more proof that “free” sells in the streaming space, Peacock, the only major contender streaming service that offers a free version already has 10+ million subscribers.
More than 10 million households have signed up for Peacock, the new streaming service from Comcast’s NBCUniversal. The media giant shared the update in its second-quarter earnings release, and management had much more to say about the early results during the accompanying conference call.
“Not only are more people signing up than we projected, but they are watching more frequently and engaging much longer than we projected,” Jeff Shell, CEO of NBCUniversal, told analysts.
Speaking of earnings calls, Roku is scheduled to deliver theirs Wednesday 8/5, and some analysts are predicting — gasp — no profits.
The average estimate right now is for revenue to come in 25% stronger in Q2 2020 than it did in Q2 2019. Despite this sales growth, however, analysts predict that Roku’s losses will only increase — more than quintuple, in fact, to a loss of $0.51 per diluted share.
I probably shouldn’t get started on companies that don’t make profits being popular, but it concerns customers. This week Sprint is going the way of the dinosaur, as it was gobbled up by another company. Maybe that will be the future for Roku someday.
(this gets me thinking about who might want to buy them … hmm)
Seems like every news organization has “inside sources” — Fast Company has some saying that following the big splash of Tom Hanks’ Greyhound on AppleTV+ they want to buy 2-4 of these type blockbuster movies a year.
Going forward, one source says the streamer is discussing plans to release a dozen new movies a year on Apple TV Plus, roughly one a month. Two to four of those would be blockbuster-type titles such as Greyhound and Emancipation, the runaway-slave thriller starring Will Smith and directed by Antoine Fuqua (Training Day) that Apple recently acquired for $120 million in a bidding war with Warner Bros., Universal, and other studios. Another source had fewer specifics but confirmed that Apple is telling Hollywood that it’s now in the market for more tentpole-like feature films. (Apple would not comment for this story.)
Simple math suggests, if this is true (big “if” there), could cost upwards of $500+ million. I’m sharing this article here because my confidence in this is pretty high. Apple has the cash to throw around and it fits their historic corporate culture rather than dive into something, they pick and choose.
Under Steve Jobs, rest his soul, this would be exactly the way they’d get into the movie business. It’s what he did with music. Jobs didn’t want to have a subscription plan like Spotify, he wanted to sell tracks for a buck each and so they did — they sold tons of them. Eventually this model would lose out to Spotify, but they made a boatload of cash in the interim.
If you compare the business types, that’s kind of what Apple is doing right now with AppleTV+. They don’t want to pay to rent licenses of movies for subscribers on a license, they want to take a piece of the pie to sell or rent monthly movies only and create their own originals.
The problem is Apple is so far behind Netflix, Amazon, HBO, Hulu, Peacock, that they may never catch up buying and/or creating a mere dozen or so movies a year.
10 years = 120 movies 20 years = 240 movies
That isn’t going to build them a sizable enough library of originals to keep members subscribed. Sure, there are buying TV series, documentaries, miniseries, too (they just bought Werner Herzog’s new documentary “Fireball” according to MacRumors), but will it add up to what Netflix is releasing?
Netflix currently releases around 50+ originals a month. Most are TV shows, documentaries, miniseries, etc, but they offer a fair number of movies each month on average. This original content is on top of the existing library they are paying for of rotating movies. An argument could be made that Netflix doesn’t even need the rotating movies from other studios any more. You can’t say that about any other service of originals except maybe, possibly HBO, that also has an impressive catalog of original programming created since the 70s.
It seems Apple believes this and wants to go grocery shopping on the theatrical movie aisle. So, if you’re a movie studio with a delayed title and contemplating taking it to streaming, Apple has arrived with multiple suitcases filled with cash.
Unfortunately, Apple aren’t the only ones who want to buy these theatrical releases. Netflix, Amazon, WarnerMedia/HBO, NBCUniversal/Peacock … perhaps to a lesser extent even Disney might cough up a few bones (although they seem less likely to be buying other movies, when they have a bunch of their own content in the pipeline).
The studios with finished movies, waiting for release dates will continue to have this option: sell to the highest streaming channel bidder. I’m sure every studio has Apple programmed on speed dial.
If any company ever needed to quit the doom diet, it’s AMC. We realize time’s are challenging and they need to tell shareholders something, but does it have to be that they have “substantial doubt” their business can continue to stay afloat? I mean, really.
Negative prophetic hypotheticals aren’t even remotely encouraging for businesses.
Sure, AMC are burning cash while closed and if they open and don’t do enough business they’ll burn reserves even faster. The problem is the longer they stay closed, I’d argue, the worse it all gets.
The theater chain, which closed its theaters earlier this year, expects to have lost between $2.1 billion and $2.4 billion in the first quarter.
I’ve been saying all along that they should reopen as soon as it’s safe to do so. More and more businesses are being allowed to reopen. We’re in June now, and while there are no new wide release movies available, it seems prudent to me that they should get the theaters open — again, if it’s safe to do so — then start showing movies.
Or are they literally going to wait until the week of Tenet on July 17? I’ve heard they may reopen in July, but not seen any actual date on the AMC website. Has anybody else?
Just don’t think this method is a business wise or most effective way to monetize by disrupting your website readers and potential subscribers. In my detailed comment reply I stated there were other creative ways to drive more subscribers to their site.
Enter virtual events.
“With the huge success we’ve had with virtual events — over a quarter of a million attendees have tuned in from over 110 countries — we’ve realized that a significant portion of our attendees were not current NYT subscribers,” said Jessica Flood, managing director, NYTLive. “We are working to engage that group over the long term in a variety of ways, including a new suite of subscriber-only virtual events launching in the coming weeks.”
By holding special subscriber-only virtual events, it drives more paid subscribers.
When we choose to monetize this site someday, virtual events will be on the menu. I’d love to watch movies with the most engaged and energetic readers and it ties into what we do on YouTube with our “just left the theater” movie reviews. One way to scale these virtual events is to do it behind a paywall.
The New York Times isn’t having movie watching sessions, no, but there are all different types of virtual events and, as the article states above, they are attractive to paid subscribers as an added benefit.
And it continues to bother me that movie theater chains feel like they can’t make any money while they’re closed in the pandemic. Ideas exist, but they’d rather just say “we’re waiting for the new movies to launch in July” — what happens if Tenet and Mulan are delayed? Does that mean they’d hold out on reopening in August?
Summer is going to come and go. Movie theaters need to reopen during the summer. At least one some sort of scale. Open your best performing theaters in major markets first, fine, whatever, just start reopening the locked doors.
Most reading know what happened to O.J Simpson, the fallen football hero and actor. Also, many recognize the big yellow and black Hertz, the rental car company. The business and the man they called Juice once were linked.
O.J Simpson wasn’t always a villain, he was at one time an extremely talented football player, who parlayed his charm and grace into advertising and acting roles in movies like The Towering Inferno (yes, The Juice was in that 70s disaster flick).
He’s perhaps better known for his role in the murder trial in the 90s for his wife Nicole Brown Simpson and Ronald Goldman than his role as Norbert in The Naked Gun movie series, a charge of which he beat with a Dream Team group of lawyers lead by the now deceased Johnny Cochran and F. Lee Bailey.
More recently Simpson is remembered for the botched memorabilia robbery in Vegas that led to more legal trouble. He was convicted and sentenced to a Nevada prison. He did his time, and was eventually released from prison not too long ago.
But let’s go back in time to when O.J Simpson was not a social leper and convicted felon. If only to reminisce about the company Hertz’ before their current financial struggles.
Certainly at least some reading remember O.J Simpson in the mid to late 70s running around airports and other areas promoting Hertz rent-a-car? If not, YouTube has our fix:
Look, I dig watching these nostalgic commercials. O.J Simpson looks good in these commercials and so does Hertz. Here’s another Hertz commercial with Simpson in 1993, a couple short years before his infamous murder trial:
The slogan for Hertz is particularly interesting in the first commercial: “Nobody does it better than Hertz” — considering they have now filed for bankruptcy in 2020.
Not here to celebrate people losing their jobs or the downfall of Hertz (although the CEO of Hertz making $9 million is disappointing), rather I found the article quoted below an interesting parallel to the movie business. I’ve bolded the important part.
It’s easy to blame the company’s misfortunes, as well as the other corporate casualties, on the pandemic. The reality is a different story. The failures of Hertz and the others have more to do with their own arrogant inertia and inability to recognize the fast-changing trends and a refusal to adapt their business models accordingly.
If we look at Hertz’ failure, parallels to the movie business are clear. An inability to recognize changing trends — streaming becoming something more and more people want to do and how can this be embraced better?
Luckily, AMC and Cinemark never had O.J Simpson as spokesperson, but one thing these businesses can do is not fight with studios in public. Get together behind closed doors and hammer out deals that make movie theaters better partners. Work together and recognize every business loses when customers aren’t listened to.
As the article states, rental car companies have fallen on hard times not only because of the pandemic, but because customers would rather take an Uber or Lyft than deal with the red tape and hassle of renting a car.
We rented a car in Vegas recently — not from Hertz — and it was a fairly quick and painless process, but we still had to wait in line, go through an unnecessary upsell process for overpriced add-ons we didn’t need, despite reserving a car in advance. The process should have been even further streamlined. We get off the plane, go to the rental car parking lot, show ID, pick out our car, inspect it for damage and leave. Done. Why the additional need to go to some stuffy counter and talk to someone so they could sell us more coverages or a “better” vehicle? Yes, of course, because all customers want to be sold something else after they’ve already made a decision to buy from you. Not.
The movie business when it reopens needs to learn lessons from other companies like Hertz that are going out of business. Listen to your customers.
Hertz’s slogan in the 70s should have been: “Nobody does it better than YOU, our customers!” That sort of thinking is the ticket to longevity in business.
To those running AMC or Cinemark: embrace both humility and change. Hertz has been in business over 100 years. They didn’t change. Movie theater chains need to change.
UPDATE 5/24/2020 9:45am PT: OJ Simpson on Twitter says he is “available” to Hertz.
Netflix, as of this writing in May 2020, has the most subscribers at 183 million. They are also spending the most on original content, and it shows in the battle for who has the most new to offer every week.
Netflix has something new — movie, TV show, documentary, mini-series, etc — every other day, it seems. It’s challenging keeping up with everything new they’re putting out, even when trying to cover them.
What is everybody else in the streaming wars game up to as far as budgeting for original content? Forbes to the rescue.
Piggybacking on a Bloomberg study, Forbes have further broken down how much the major streaming services are spending.
Coronavirus shutdowns and stay-at-home orders have sparked a new boom in the streaming world as established companies rev up content and new players, like HBO Max and Quibi, look to make a splash.
Here’s the numbers in list format from most spent, to least, in 2020 as well as current number of subscribers:
Netflix – $16 billion – 183 million subscribers
Amazon – $7 billion – 150+ million subscribers
AppleTV+ – $6 billion – 33 million subscribers
Hulu – $3 billion – 28 million subscribers
Disney+ – $1.5-1.75 billion – 50+ million subscribers
HBO Max – $1.25 – $1.5 billion – 35 million subscribers
Quibi – $1 billion – 1.3 million subscribers
Peacock – $800 million – $1 billion – ??? subscribers
CBS All Access – $800 million – ??? subscribers
Apple is perhaps the biggest surprise on the list. Clearly, they have the $$$ to compete with others, and are focusing on a bunch of original content. To be spending almost as much as Amazon seems ambitious, but if the content they’re spending on is good (listen up, Quibi), it will work in luring in more subscribers.
Missing from this list is niche player Shudder, owned by AMC, but my guess would be they’re budget is in the small millions. Another standout niche streamer is DC Universe, but you can sort of count part of DC Universe budget as HBO Max, since the parent company for both is AT & T / Warner Bros, and again, just a guess, but probably a tiny fraction (way less than $100 million) of the HBO Max pie.
Those bolded in the list are the services we’re signed up for as of this writing. We just signed up for HBO Max through the HBO Now, so we’re ready for the May 27 launch at a reduced price of $11.99/month for 12 months, should we stay with them that long. We have been long time subscribers to Netflix and Amazon (via Amazon Prime annual). Disney+ we signed up for a year at launch and will likely renew in November 2020 when it comes up again, mostly for our grandchildren and their excellent library of (mostly) animated movies for children. Peacock we receive as part of being Xfinity high speed internet customers. We don’t subscribe as of this writing to any of the others listed, although we do subscribe, binge watch what’s available, and then cancel from all other channels, including the premium add-on channels like Showtime, Starz, Cinemax, Epix and so on. We do not subscribe to any TV streaming channels like YouTube TV, Sling TV, etc.
It’s not news that landlords are feeling the sting from tenants that can’t pay rent, but I’m a bit flummoxed by this lawsuit. $7.5 million for the entire balance of the lease? That’s what a Florida landlord is asking AMC to pay.
Palm Springs Mile Associates, Ltd., filed suit in federal court in Miami, alleging that AMC had failed to pay the $52,153.87 monthly rent on the AMC Hialeah 12. The suit contends that the breach of contract has triggered a requirement for immediate payment of the balance of the lease. The suit seeks in excess of $7.5 million in damages.
Let’s talk about that rent for a minute. $52,153.87 per month. If we divide that by 12 screens that works out to a cost of $4,346 per screen, if we then divide that by 30 days, that works out to 362 movie tickets sold per screen per day just to pay the rent.
This doesn’t take into account that the theaters don’t get to keep 100% of the ticket price. In fact, they get far less from the new movies when first released. This also doesn’t cover any labor costs.
This makes me feel less annoyed that popcorn is sold at an extreme markup (see: 788% Profit on Movie Theater Popcorn). Clearly, without the concessions these movie theaters would go broke.
Why aren’t movie theaters selling and delivering popcorn? There’s Doordash, Ubereats, etc. I’d think this would give at least some revenue to theaters from their businesses that literally are making $0 while shuttered. Some independent theaters are doing this but not the big three. They just shuttered and furloughed a bunch of their employees. They didn’t even try.
On that front, I can see why landlords would feel a little put off. No attempt to use any of that real estate to generate any kind of revenue makes little sense. The flip side of that is that rent seems ridiculous to me. Maybe it’s in a prime location, I don’t know the details, maybe it is well worth that price, but that is some real difficult math to wrap your head around for a viable business model at the least.
AMC, open the theaters when it is safe to do so, there are plenty of movies to show — classic movies, if need be. Using the excuses not to reopen because now there are no new movies to show? That will likely not hold up in neither the court of public opinion or court that decides financial judgments against your business.