Digital TV Europe

Are sports rights the brightest feathers in Peacock's plumage? #Peacock-owner #Comcast just turned in a very mixed quarter, taking a big hit from lower attendance at its theme parks (blamed on a maybe-peeling away of post-COVID enthusiasm) and a drop in revenue at its studios division (blamed on comparison with the prior year appeal of Super Mario Bros.). The cable business saw 419k video and 120k broadband losses, offset against 322k wireless adds, with revenue down slightly. Worse is expected in Q3 as the US govt’s Affordable Connectivity Program ends. As is now customary, very little info. on Sky (video subs down, wireless subs up). That leaves media, and particularly Peacock, with NBCU’s NBA deal a source of good cheer for company bosses. But what is the overall big picture for streaming? ·     Peacock subs dropped 500k to 33m, with Comcast CFO Jason Armstrong highlighting instead a 38% uplift yoy along with a 28% increase in revenue. EBITDA also improved by US$300m with what Armstrong said was “a lack of tentpole content” in Q2 contributing to the subs dip and – via lower costs – improvement in financials. ·     This comes ahead of a biggish price hike in July for new subs and Aug. for existing customers, timed for new subs to coincide with the #Olympics. Olympics viewing via streaming is expected to outperform broadcast thanks to a richer offering. Comcast will be hoping that sports-drawn subs already in or about to join will stick around at a higher price point thanks to ongoing investment in year-round rights. ·     Central to that investment is the acquisition of #NBA rights (with a nine month-long season) from 2025-26, shared with Amazon and ESPN. (Rights loser Warner Bros. Discovery may attempt to throw a legal spanner in the works by challenging the NBA over its right to ‘match’ rival offers, which the NBA reportedly believes does not apply to Amazon’s streaming package). For Peacock, these rights will complement a strong existing line-up. ·     Comcast’s drive to generate buzz around the Olympics and NBA deal highlights the high and growing importance of sport not only for Peacock but for streamers generally (possibly excluding Netflix). Comcast pres. Mike Cavanagh told analysts “the long-term goal for Peacock is to have a service that is a balance of sports, entertainment, and news”. That sounds a lot like a pay TV package of old, or even a broadcast network, delivered in a less energy-efficient way. But with legacy media outfits looking to streaming to offset linear TV’s decline, live sports will inevitably become a bigger part of the mix.

#Netflix has turned in another spectacular quarter, growing its paid membership base by over 8m to 278m, way ahead of expectations of 5m adds, boosted by its crackdown on password sharing, its lower-priced ad tier and the appeal of hit shows such as #Bridgerton and #BabyReindeer. It also saw revenues jump by 17% (or 22% excluding currency movements) to US$9.6bn. ·     Despite the boost, Netflix is being cautious about the next quarter, as the impact of its paid sharing initiative tails off. Average revenue per member is also expected to be flat due to currency impacts and stronger growth in lower revenue markets. ARM from the ad tier lags without-ads plans because Netflix has yet to really break big on ad sales. ·     Diminishing returns from paid-sharing growth and growth in ad tier members means more than ever that engagement is the top priority for Netflix, which sees YouTube, with a very different business model, as its main competitor for time and attention. #Streaming stands at 40% of US TV viewing, with half of that split between Netflix and #YouTube. However, growth for Netflix increasingly will mean less emphasis on sub numbers and more on capturing viewing time – not from YouTube but from other streamers and linear TV. ·     The ad tier is growing rapidly – up by 34% in membership – thanks to improvements in the offering and the phasing out of basic without ads in the UK and Canada, to be followed by the US and France. But ad revenue itself is still small, so the immediate impact is to flatter the subscriber total. Netflix admits that building the ad business will take time, with an expectation that the needle will move significantly in 2026. Building its own ad server, investing in operations, making it easier for advertisers to buy and see the results is a hard long-term slog. ·     More live content – including sports – helps drive engagement, but Netflix remains cautious about becoming tangled up with big sports rights deals that need to be renewed, “making these Netflix events, not necessarily taking on a lot of tonnage from any one league”, in Ted Sarandos’s words. ·     Content spend – US$17bn – will “grow as our revenue grows” but at a slower rate, says Sarandos. Within that, scripted drama and entertainment will continue to dominate rather than the sideline of sport. Netflix still knows where its core strength lies.

France’s Ligue de Football Professionel (LFP) this week struck an 11th hour deal for #Ligue1 rights that pleases no-one and may well be revisited a couple of years down the line – a continuation of the LFP’s ongoing story of a hand-played-badly in search of a billion. ·     #DAZN and #beINSports will split the rights (with DAZN taking the lion’s share) in a €500m a year (domestic rights) deal that falls dramatically short of the €1bn consistently cited as a target by LFP pres. Vincent Labrune. ·     The pair (and the LFP) have sought an exit clause that could be triggered after the first couple of years if things don’t work out (with the league still doubtless dreaming of a bigger overall take). ·     The deal as it stands shows the LFP’s threat of going it alone (or in partnership with Warner Bros. Discovery) with its own platform to has been an empty one – not enough time, too much risk, an unviable model. Nasser Al-Khelaïfi, straddling the two sides as pres. of both PSG and beIN Media, appears to have opted for the certainty of the agreement rather than the high-risk option. ·     DAZN now stands as a bigger presence than ever in premium football – with shared rights in Spain and Italy and its battle with the Bundesliga – despite scepticism in some quarters over the viability of its long-term business model. ·     Scepticism also abounds in France. Dissenting RC Lens pres. Joseph O. has pointed out that fans are now expected to have to pay around €50 a month for comprehensive match coverage, against around €35 under Amazon and Canal+, while the clubs are worse off than before. ·     The LFP once again has been a victim of the hubris that led it down the path to its disastrous pact with Mediapro. Enviously eyeing the amounts commanded by peers in neighbouring countries failed to produce bids to match, with a go-it-alone option convincing no-one. The revenge of twice-bitten Canal+, growing its business despite a much-reduced football presence and notable by its absence from the bidding this time round, is complete.

A few thoughts on #Skydance ’s #Paramount deal and what it seems to mean for the streaming side of the business. ·     Far from shutting down loss-making Paramount+, David Ellison and Jeff Shell seem committed to invest in making it better (Ellison: streaming is “the future of the business”). Ellison’s comments about turning Paramount into a “hybrid” #mediatech company are very much centred on this, with a focus on increasing stickiness and reducing churn. ·     CBS will be a “cornerstone” of new Paramount’s streaming strategy, says Shell, suggesting following the likes of Disney in making sport, as well as broader-based entertainment programming, a key part of the streaming offering. ·     A common re-engineered tech for Paramount+ and Pluto can help cut costs but also suggests advertising is seen as an important opportunity for both. ·     ‘Winning’ in D2C means being part of “the ultimate bundle”, says Shell – meaning streamers will theoretically be joined in a big cable-like bundle in the future, but also alluding to nearer-term opportunities for one or more specific partnership. ·     A couple of caveats re. the evident commitment to streaming: (1) licensing content rights to where they make money will be more important than strategic retention; (2) This seems a domestic US-centred vision – plans for an international streaming spin-off/JV pre-the deal closing remain in play. #Paramount #ParamountGlobal #Skydance #SkydanceMedia

I'd just like to say thanks to the many kind messages we've received since announcing the closure of Digital TV Europe (DTVE) today. It's very gratifying to hear that our news, analysis and (hopefully) insight is appreciated by so many people whose own insight, views and experience I very much respect. Thanks again to our team and external contributors, clients and (of course) our readers. For my part, I fully intend to carry on writing about, and participating in, this great industry. Stay tuned... https://lnkd.in/eapacs2d