A Break From Netflix News (just kidding... it's almost all about Netflix)

1. Netflix Gets Ads

Unless you live under a rock, you're aware that Netflix announced a decline of 220K subscribers after a decade or so of continuous growth... about 0.09% of its subscriber base. This caused major panic on Wall Street where Netflix and other streaming stocks dropped by 30% or more and resulted in pretty much anyone with access to the internet writing a well-intentioned column about What This Means For Streaming.

Later that evening, CEO Reed Hastings admitted that it is looking into an ad-supported version. 

None of this is a surprise. 

None of it.

It does not take much insight to realize that at some point all the people who wanted a Netflix subscription would have one and subscriber numbers would level off.

Nor did it take much insight to realize that if Netflix wanted to be a major player in the many, many, many places where people do not have the sort of disposable income that allows them to buy subscription TV services, it was going to have to introduce advertising.

So that’s the key takeaway here: in their exuberance about the new, people often miss the obvious. Even Very Highly Compensated People. 

That said, Netflix has a number of fixable problems that helped accelerate reaching a point where Wall Street turned on it... [READ MORE]

2. Apple Gets Football

While the official announcement has yet to come down, every media outlet seems pretty convinced that Apple is going to get the NFL’s Sunday Ticket package, thanks to some inside info from Puck’s Matthew Belloni. The package, which could cost as much as $2.5 billion per year (chump change to Apple), is currently with Direct TV.

Sunday Ticket is designed for super fans. It includes all out-of-market games and costs $293.96/year or $73.49/ month during the season. Getting it would establish Apple as a key source for sports on streaming, as they already have an MLB deal.

More than that, it gives viewers a reason to continue to subscribe to Apple TV+ once they’ve finished watching Ted Lasso and, when combined with the low $5/month price tag, should help to reduce churn.

We’ve discussed Apple’s notion of making Apple TV+ a “sometimes” service rather than an “all the time” service, meaning that it’s more of a must-have add-on for quality programming (think HBO circa 2007) than the only app you’ll ever need.A Break From Netflix News (just kidding... it's almost all about Netflix)

This can only help with that while bringing in sports fans who might not have much desire to watch Ted Lasso, CODA or The Morning Show.

There’s also the ad thing... [READ MORE]

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Wall Street’s Streaming Reset

Netflix’s subscriber losses (minor, in the big scheme) spurred a massive selloff of the company’s stock and a Wall Street reexamination of the value of the overall streaming market, both now and in the future. If we’re nearing “maximum adoption” (debatable), there are fair reasons to be concerned about the ramp left for streaming to grow, but…

• Live sports and news – TV’s biggest draws – have still barely dipped their toes in that pool.
• New TV subscribers will only know a world in which streaming exists as a primary means to watch content.

Subscriber growth isn’t limited to the U.S. marketplace, and there are still BILLIONS of people that aren’t paying monthly streaming fees right now.

Madison Avenue Loves the Idea of a Netflix With Ads [WSJ]

Morgan Stanley analysts expect Netflix to generate billions of dollars in ad revenue over the long term, they wrote in a note Wednesday. They estimate that Hulu generates more than $3 billion in ad revenue, despite having just over half of Netflix’s customer base. Hulu didn’t immediately respond to a request for comment.

In the Streaming Wars, Peacock May Not Be a Turkey After All [IndieWire]

Weeks after the Tokyo Olympics were postponed, during a soft launch for Comcast cable customers in April 2020, Peacock decided to open up streaming access in exchange for email addresses it could theoretically monetize later. A relatively robust free tier wasn’t originally in the plans; today, it is a driving introductory force. 

The Party’s Over: What Netflix’s Horrible Quarter Means For the Rest Of the Streaming Sector [NextTV]

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