Weekly Digest from the West
Jean-Baptiste Piron
Cultural Attaché I Attaché culturel I Québec Office Los Angeles
-HBO is getting a bigger budget under AT&T to challenge Netflix: HBO’s new owner is looking to devote more money to the network behind “Game of Thrones” and “Westworld.” John Stankey, the incoming head of AT&T Inc.’s entertainment division, plans to boost HBO’s original-programming budget to keep pace with deep-pocketed rivals such as Netflix Inc. AT&T took over HBO and the rest of Time Warner Inc. on Thursday after overcoming an antitrust battle. “I fully expect we’re going to be investing heavier in content development at HBO,” Stankey said. Stankey, a phone-company veteran, will have to convince Hollywood that he can oversee a massive entertainment business. He’s taking charge of Time Warner’s three units: HBO; Turner Broadcasting, home of CNN, TNT and TBS; and the Warner Bros. studio. That puts him front and center in trying to marry a film-and-TV culture to a telecom business that dates back to Alexander Graham Bell.At HBO, Stankey plans to have a bigger programming library and more on-demand content. He added that he wants to bring the online-only version of HBO to additional countries, giving cord cutters around the world a way to watch the network. “Clearly there’s an opportunity internationally, where HBO could choose to have more direct relationships with end users than what they have today,” he said. Even if HBO steps up spending, its budget probably will remain a shadow of Netflix’s. HBO’s overall programming budget, including original series and film deals, was around $2.5 billion in 2017. Netflix plans to spend $8 billion on programming this year. Besides HBO, one of Time Warner’s most prized assets is its sports programming. Stankey said he sees new opportunities to use Turner’s NBA broadcasts for AT&T’s phone subscribers because the games are shorter than in other sports. “It’s a format that’s well-tuned to a distracted society,” he said. “The highlights can be compressed in better ways to get engagement.” But he said AT&T would be cautious about future sports rights and would not go “willy-nilly and look at all sports content.” He said he preferred investing in programming that AT&T can own, not license, so it has the flexibility to show it on different platforms and markets. “If we can manage those rights more effectively we can have better products,” he said. “Licensing sports content is more cumbersome. There’s a balance that needs to be struck.
-Fate of Hulu Hangs in the Balance of Comcast-Disney War for Fox: The showdown between Comcast and Disney to acquire 21st Century Fox will have a major effect on the future of Hulu. Since each of the three companies currently owns a 30 percent stake, whichever wins Fox could take control of the over-the-top service, which on May 2 revealed that it had crossed the 20 million-subscriber mark. (AT&T’s WarnerMedia holds the remaining 10 percent stake.) Disney has been keen on rivaling Netflix by seizing command of Hulu in its Fox deal and using the acquisition to beef up the content for its own streaming service. Comcast, meanwhile, also stands to benefit from possibly controlling the video streamer in the age of cord-cutting. « While only worth approximately $8 billion, or 9 percent of the total Fox/Sky transaction, [Hulu] may in fact be the most important asset within it," said Macquarie Capital analyst Tim Nollen in a recent report. « Hulu is Comcast’s only direct-to-consumer option in the U.S., and seeing Disney gain majority control would weaken its hand in this further — it would be worse for Comcast to be a 30 percent minority owner of an asset with a majority owner than to be one of a consortium of minority owners." "The combination of content of Hulu, Sky's Now TV and Hot Star in India would leave Comcast well positioned in the global OTT market," says Jefferies analyst John Janedis. Meanwhile, for Disney, « We think Hulu is also an 'important to have' if not a 'must-have' — for the same reason as it is for Comcast," Nollen argues. So much is at stake in the showdown for Fox that would shape the streaming video future of the Hollywood giants bidding for it, but analysts say that the rights of minority owners of Hulu aren’t fully known, which could be a wildcard. Says Pivotal Research Group analyst Brian Wieser: “I think the minority owners may have some veto rights that we don’t know everything we might want to know about.” Some reports have suggested that Comcast and Disney, if one of them wins Fox, could be willing to sell Fox’s 30 percent share in Hulu while keeping its own stake to help seal a megadeal if regulators require it.But analysts say the odds of that happening are slim unless their hand is forced — Hulu is just too valuable. Says Tuna Amobi of CFRA Research, « A potential controlling stakeholder in Hulu — either Disney or Comcast — is more likely to leverage the platform as an important component of its overall direct-to-consumer strategy."
-Starz Is Coming to YouTube TV as a $9 Add-On: YouTube TV subscribers can now add Starz to their channel line-up, if they’re willing to pay a little more: Starz announced the launch of its family of premium channels on the Google-owned online TV service Tuesday. The channels, including Starz, Starz Encore and Starz Encore Westerns, are available to YouTube TV subscribers for a monthly premium of $9. Altogether, YouTube TV is getting 14 Starz channels as part of the pact. “The addition of STARZ on YouTube TV offers consumers another exciting new way to subscribe to our channels and access the breadth of top quality original programming and content with the freedom to watch it anywhere, anytime,” said Starz COO Jeffrey Hirsch in a statement. Google launched YouTube TV as a “skinny bundle” online TV service a little over 2 years ago. The service has since expanded its line-up to over 60 channels, including the big broadcasters ABC, CBS, FOX and NBC as well as select cable networks.
-Sony’s PlayStation Now may let you download games in the coming months: Gamers, get ready. You may soon be able to download PlayStation Now games from the cloud. Sony's on-demand streaming games library will allow gamers to play offline starting this September, according to Kotaku. That means you’ll be able to download your favorite games onto your PS4 and play them even if you aren't connected to the internet. Players can also access games on the same PS4 even if their using different accounts, according to Kotaku. You’ll be able to play them as long as you have an active PS Now subscription, the site reported. The functionality will be limited to the PS4 for the time being, the report said. The PS Now service launched in 2014 and its catalog expanded last year to include PS4 games. The service costs $20 a month.
-Viant Launches Next Generation TV Solution: Viant, a Meredith Corporation people-based advertising technology company, today announced the launch of its next-generation Viant TV platform. The major advancements include improved addressable household reach and scale through expanded data partnerships; the addition of low latency TV retargeting capability; and increased connected TV (CTV) inventory scale. Through Viant’s expanded partnerships with automatic content recognition (ACR) providers and TV intelligence companies, live viewing data from millions of Smart TVs is now ingested and continuously refreshed on Viant’s platform throughout the day. The next generation Viant TV platform provides advertisers the tools to retarget consumers across their smartphone, laptop or tablet immediately after exposure to an ad on TV, driving additional message frequency or enabling timely competitive conquesting. Rather than retargeting an ad hours or days after it was seen on TV, Viant’s low latency retargeting solution generates stronger brand recall, conversion and return on ad spend. In conjunction with low latency retargeting, Viant TV offers advertisers tremendous CTV inventory access and scale. Integrations with Xumo, FreeWheel, SpotX and others result in access to over five billion CTV impressions monthly. Combined with the largest TV ACR and set-top box data sets in the industry, Viant TV combines precise audience targeting with high-quality inventory, all at a scale unmatched in the industry.
-Disney Ups Fox Bid to $71.3 Billion, Outflanking Comcast: The Walt Disney Company has boosted its bid to acquire the bulk of 21st Century Fox, raising its offer to $71.3 billion in cash and stock. In a statement, Fox said Wednesday that the new deal is significantly better than Disney’s earlier offer and “is superior to the proposal made by the Comcast Corporation.” The move comes after Comcast launched a rival bid for most of Fox’s film and television holdings. Its $65 billion all-cash offer topped the $52.4 billion deal that Disney inked with Fox in December, fueling expectations of a bidding war between two of the world’s biggest media companies. Both Disney and Comcast see a Fox acquisition as potentially transformative, adding to their arsenal of hit movies and shows at a time when digital behemoths such as Netflix and Amazon are changing the way consumers watch and pay for content. Disney said it would now pay $38 per share for Fox, up from its initial bid of $28 per share. The deal would be about 50% cash and 50% stock, and debt would be used to partly finance the transaction.
-Apple Teams With Sesame Workshop to Develop Kids’ Programming: Apple is getting into children’s programming. The streamer is teaming up with Sesame Workshop to create a new slate of kids’ programming for Worldwide Video, led by Zack Van Amburg and Jamie Erlicht. The content will be wholly original — and will not include “Sesame Street,” which has its own separate deal at HBO and also airs on PBS. Under the multi-series order, Sesame Workshop — the nonprofit educational organization behind “Sesame Street” — will produce live-action and animated series, as well as develop a puppet series for Apple. Over the course of its 50-year history, Sesame Workshop won more Daytime Emmys than any other children’s production company. This deal marks the latest in Apple’s ever-growing slate of originals. The streamer is prepping a lineup of series including a drama set behind the scenes of a network morning show starring Reese Witherspoon and Jennifer Aniston, a reboot of Steven Spielberg’s “Amazing Stories,” a psychological thriller series from executive producer M. Night Shyamalan, the true crime podcast drama series “Are You Sleeping?” starring Octavia Spencer and Aaron Paul, and an Emily Dickinson series starring Hailee Steinfeld among many others.
-Instagram Launches Long-Form Video Service Called IGTV: Instagram unveiled IGTV, a new service for long-form videos from professional Instagram creators, at an event in San Francisco Wednesday morning. IGTV will live both within the main Instagram app, as well as via a dedicated app for iOS and Android. “It’s mobile first, it’s simple and it’s high quality,” said Instagram CEO Kevin Systrom. Systrom positioned IGTV as Instagram’s answer to shifting entertainment consumption habits. “Teens may be watching less TV, but they are watching more creators online,” he said. At its heart, IGTV will be both a hub within the existing Instagram app, as well as a new dedicated app that will allow users to watch IGTV videos. These are basically vertical videos produced by some of Instagram’s top creators, and curated based on past viewing behavior of Instagram’s users. At launch, IGTV will not feature any ads, and the company doesn’t yet have any revenue share agreements with creators in place. “Right now, we are focused on building engagement,” Systrom said during a Q&A with press following the announcement. However, he said that Instagram ultimately wanted to allow creators to make a living on the service. “This is obviously a very reasonable place to end up,” he said about revenue sharing. Instagram partnered with a number of creators to pre-populate the service with content, and executives said Wednesday that brands and media organizations would be invited to participate as well. However, Systrom said that the service had no plans to fund original content “for the foreseeable future.”
-AT&T’s WatchTV bundle will come with new unlimited data plans: AT&T, fresh off sealing its $85 billion deal to buy Time Warner, isn't wasting time showing that video will be a core part of its service. The company on Thursday unveiled two unlimited data plans, dubbed AT&T Unlimited &More and AT&T Unlimited &More Premium, bundled with WatchTV, a new "skinny bundle" of more than 30 live channels. The plans replace the existing options, with a starting price that's $5 more expensive for a single line. Also gone is the default "HBO for life" promotion. WatchTV is available to non-AT&T customers for $15 a month. The new plans and WatchTV launch next week. The announcement makes good on a plan that AT&T CEO Randall Stephenson teased last week in an interview with CNBC. The standalone price puts in competition with Philo, which strips out sports and news channels for a $16-a-month bundle of entertainment networks. It's the latest in a growing crop of online options for live television, which include players like Sony, YouTube and SlingTV. The phone plans are also the latest in a slew of new unlimited options to come from the wireless carriers, which are seeking to both redefine how unlimited plans work and add on extras to justify different, more expensive options. These plans come on the heels of Verizon's debut of a new, pricier unlimited data plan, as well as the ability to match different tiers within the same family plan. Sprint, meanwhile, just ended a promotional offering for a stripped down unlimited data plan for $15 a month.