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- The Connection Newsletter 64 - The Streaming Edition
The Connection Newsletter 64 - The Streaming Edition
The Connection Newsletter 64 - The Streaming Edition
Hello!
This is edition #64 of
The Connection
, the weekly email I send family, friends, and future friends (hello!) Glad you're here.
I love watching the streaming companies jockeying for position, preparing themselves for a war of attrition. There seem to be more hats in the ring than Democratic presidential candidates (current event joke? check) and everyone’s taking pot shots at the frontrunner, Netflix.
Let’s look at the ways:
WarnerBros is taking back FRIENDS to stream on HBO Max
NBCUniversal took back THE OFFICE
Disney is taking back their Disney, Star Wars, and Marvel properties (so get that JESSICA JONES s3 binge on while you can)
Price is another part of each streaming service's strategy and positioning. Here’s a snapshot of what you can expect to pay a month for each service:
Apples Streaming - $30-$40
HBO Max ~$15 (HBO Now is $15/month so expect it’s step-sibling to be a tad pricier)
NBC Universal streaming - Free for TV subscribers, ~$12 for non-subscribers
Netflix - $9 and $16
Disney+ - $7
Hulu - $6 and $12
How’s Netflix responding? By digging deep(er) moats.
First, CEO Reed Hastings plans to continue investing in content, and “remain at negative free cash flow for many years.” Last year, they invested $12 billion in programming. In 2015, it was $4.6 billion.
To put this in perspective, HBO and Cinemax combined spent just $2.24 billion in 2017.
The second way Netflix is fortifying its defense?
The tech company is starting to behave more and more like a Hollywood entertainment company.
According to
(email gated), Netflix is:
1. Considering using Hollywood compensation structures
There’s a reason why Netflix is spending 6x HBO’s content spend: in the past, they’ve bought out all the rights to their content. That means there are no royalties for writers, producers or actors. In success, Netflix reaps all the upsides in perpetuity… but it's expensive
.
Now, they’re considering profit share deals where the talent takes less money upfront in exchange for a cut of profits on the backend.
2. Considering pilots instead of only straight to series shows
For years, Netflix did away with the traditional Hollywood “pilot season”(basing the decision on whether or not they’d buy a whole season of a show by testing the first episode with executives and test markets). Instead, they greenlit entire seasons (or two) based entirely on the pitch and perhaps a few scripts.
However, Netflix recently ordered a pilot of an unscripted restaurant show from Vox Studios, and ended up not moving forward with it.
3. Looking at unscripted showsUnscripted shows, without a staff of writers and A- or B-level actors are much cheaper to produce than their scripted counterparts.
Which streaming service has the potential to disrupt the disruptor?
That would have to be Disney+.
As Ben Thompson put it:
“The goals of the two services are very different: for Netflix, streaming is its entire business, the sole driver of revenue and profit.
Disney projects that the service will achieve profitability in 2024, but the larger project is Disney itself.”
In other words, unlike Netflix, Disney isn’t just trying to get you to watch its shows. It wants to deepen your relationship with Disney. It wants you to buy Disney clothes and Disney ornaments for your Christmas tree. When you think about summer vacation, Disney wants to be the first theme park on your list.
Which is why Disney can pursue a price-cutting strategy against Netflix, and look to get onto the screens of as many consumers as possible. They have hundreds of other ways -- and an entire lifetime -- to make up for the cost.
Onto this week's articles. I spent less time reading this week, and wanted to pick articles that were in some way (even if just the barest of threads) related to the streaming wars.
Hope you enjoy, and have a great week.
Make sure to hit "Display Images" above to see puppy pics.
I’m sharing this article selfishly. I’m dying to know what you think:
Quibi is Jeff Katzenberg and Meg Whitman’s mobile content play that’s raised $1 billion in funding. They insist they’re not competing with television, and instead, are vying for the 60-70 minutes you spend on YouTube, Facebook, Instagram, and Snapchat from 7 a.m. to 7 p.m.
The service will be released with short news programming, unserialized programming, and serialized programming from marque filmmakers like Steven Soderbergh and Paul Feig, that will range between two to four hours divided into 7- to 10-minute chunks.
My question: Could you see yourself watching a 2-hour movie in 7-minute chunks on your phone? I’d love to hear what you think.
“Fail fast, fail often” is the rallying cry for many start-ups in Silicon Valley.
What happens to the companies that don’t manage to do either?
This profile highlights the harsh struggles of Evernote, a company whose heyday passed years ago and for whom failure feels tortuously slow. Strongly recommend this profile for its stark, honest accounting of what happens when a company takes off like a rocket, then runs out of fuel.
Jeff Jordan “only” became a VC in his 50s.
He’s a general manager, not a technologist.
When he first heard of Airbnb, he thought: “that’s the stupidest idea I’ve ever heard.”
What he brings to the table, however, is years of experience. His former boss at eBay, Meg Whitman attributes his success in his pattern recognition.
Take the Airbnb example. Despite his own bias, he realized that Airbnb’s user growth reminded him of eBay. It was “a déjà vu experience.” He’d seen the picture before. So he brought the deal to VC firm Andreeseen Horowitz, and guided the firm’s $60 million investment in Airbnb.
That investment has grown 30x at the company’s last valuation.
When I first started watching Seinfeld, I was too young to appreciate the nuances in the storytelling and structure. I preferred television that was more narrative driven, and remember literally thinking, “nothing ever happens in this show” (not realizing at the time, that was the point).
This profile doesn’t tie thematically with any of the above, but I wanted to share while the buzz around the US World Cup victory and pay equality issue was still fresh.
Hope Solo sparked controversy because she spoke her mind.
In just one instance, during the ‘07 World Cup, she was benched in the semifinals match and the Americans lost 4-0. After the game, she said: “It was the wrong decision. And I think anybody who knows anything about the game knows that. There’s no doubt in my mind I would have made those saves.” (
.)
She had to fly home on a separate flight from the rest of the team, and wasn’t allowed to eat with the group for weeks.
But it’s these same character traits that made her one of the five players to file a gender discrimination complaint with the Equal Employment Opportunity Commission the U.S. Soccer Federation (USSF) in 2016.
The women claimed the pay and working conditions of the women’s team were inferior to those of the men’s, despite the men’s lack of success.
Then, two years later, she filed a federal lawsuit against the USSF, 7 months before any of the women currently on the national team.
Today, there’s momentum for pay equality for women’s soccer. But we have to remember it takes instigators like Hope Solo, who are willing to speak their minds, to get the ball rolling.
Thanks for reading!
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