1/ I'm stunned, but not surprised by AT&T's decision to extended their #Friends licensing deal with Netflix through 2019. At the same time other forces advanced in E.Ghouta reaching some parts of Hazrama (2) Yeah. And so, I just started doing that. The difference is they are bundling all of those genres — what we used to consider different styles of content or networks — all within one, and so the difference there is, when you take a look at what Netflix is doing, as an example, there’s a lot of criticism as to the average quality that they put out. In 2020, that will be worth $200B. Bandersnatch, that’s coming from the other angle. Despite having their price go up, their offering go down, reaching harder-to-reach customers, the company continues to grow as quickly as possible. As said before, if you wanted to be a late entrant, there is no better gateway asset than HBO on earth, and the reality is, no matter how good Disney is, Disney’s still starting from zero. There are still 30 million people who go to a Disney Park a year, the opportunity to give that as a free trial, to push it, to give a family that spends $5,000 on a cruise line a year-long subscription ... all of those augment their opportunity to get it. So, Amazon gets into video, there’s an initial idea that says, “We’re going to do this, we’re going to disrupt Hollywood, we’re going to change the way scripts are vetted.” They come out with some shows that no one remembers. And so I think the question is, as you have this new generation that is used to different interaction models, used to spending their leisure time differently, then watches traditional sports and has a want for something, or wants to take it in a different way, a different expression. In India, people do not pay for video. What he also knows, however, is sometimes that decision is earlier. They’ve had to go from 15 percent penetration — the early adopters who usually have lower standards are more willing to try things — to an excess of 50 percent penetration in the US. Oh, and nearly a quarter of those subscriptions are to NYT’s crosswords and cooking subscriptions, rather than its news service. Prime is bigger. HBO in the United States has 36-38 million subscribers. This is all a long-winded and very typical way of me answering a short question. The tweetstorms get longer and longer, and then you retweet yourself, periodically. So if you’re AT&T, you should be ... nervous? We’ve gone over Disney, Netflix, Apple, I’m going to save Amazon for a second. He’s not there anymore. This sum sounds like a lot, but it’s surprisingly low given the supposed scarcity of human attention and intensity of competition for it, not to mention the total volume of TV consumption (6B people watching two and a half hours per day, with the wealthiest 300MM averaging more than five). I don’t have connections. I was going to ask you if he paid you living wages. If you take a step back and you take a look at the rise of D2C [direct to consumer] services, such as HBO Now or Showtime, those services all launched first and foremost on iOS. “No one ever programs for the audience they don’t have,” Ball said. It’s powered by and excels at content, but 34% of its revenues come from theme parks (which have a net asset value of $60B), another 8% from consumer products, and 15% from the resale of sports rights it doesn’t directly operate. If you are buying expertise, they may have overpaid, they may have underpaid, they might have gotten a fair price, but they bought the best in the business. Then you have the advent of mobile games. It seems to me they’ve got this weird ask they’re spending billions of dollars on, and yet still not spending a lot of time telling people about. One of the weird things to frame the business is just the idea of where Prime was in 2012 versus where it is in 2019, right? By the way, these things are splitting up even more, right? It’s this idea that it was primarily coastal, upper-income programming. I entered management consulting with this perception of the halcyon days that probably ended in ’97, where you do two years of management consulting and everyone wants to hire you. And both of these telecoms now position themselves as “tech” companies and are investing in large digital advertising and data arms, as well as multi-product/service platforms. A faux reality show comprised of C-list celebrities contributed to the election of the 45th President of the United States. Alpha House was another show. Was that a first job out of school type of thing? I’ve got a lot of minion products at our house. Let’s go through some of the other big media companies. I don’t know whether or not they do or don’t to make it work. 1/ Every new year tends to be seen as the one where Netflix will start to feel Big Media fight back 2019 looks right! Some of that time per day is highly intentional prioritized time. Still, per capita ticket sales have fallen from five per year in 2000 to less than three and half today. Okay, good. It’s a done deal. He disagreed with me about Netflix, as an example, and that started to make some of the partners ... Yeah, out of my old B school publication. How do we think Amazon is going to do in this battle royale we’ve been discussing for the last hour? Look, I mean it’s not altogether ... when we talked about Alpha House, that was another show about Congress staffers living together. What about all the stuff on YouTube that is free/nearly free? I mean, I think it’s guaranteed to be one of those enduring platforms. Amazon says its Fire TV box has 34 million users worldwide, which gives it the power to own the streaming video relationship with consumers the way Apple does with its media box, the Apple TV. I’ll give you the longer answer, or rather the shorter version of said long answer. The great thing about the way that they make decisions — and of course, there are downsides with every process, tech looks at content differently — is that doc-based decision-making process meant that the entire company, from marketing, to production, to development, to post-production, to finance and research, comes together and decides whether or not they think that this is the right decision. If you do it again, you’ll be fired.” And I made the very natural decision to just change it to a weird name. So that doesn’t work. And not only is consumer spend low overall, we’re incredibly resistant to incremental media spend. Jason talks about going to lunch with Kevin Mayer, a big-deal Disney executive, and Bob Iger, the biggest-deal Disney executive, and this is what Jason says about you: “We’re having lunch at Disney and Iger says, ‘You know you’re an idiot,’ and I’m like, ‘Why is that, Bob?’ And he goes, ‘You give away for free what we pay tens of millions of dollars a year for from management consultants.’”. It has ... As I said, I describe it as being the Steve Buscemi gif, right? And so, I spent about a year prepping pieces so that they could come out in rapid succession, working with Jason. That means 100 million homes have access to a very large catalog of Prime Video, for zero. There’s friction. In this Twitter thread Kenan Malik offers a persuasive case against the term “white privilege”. It’s phenomenal.”. And the forward plan, Lord of the Rings inclusive, Wheel of Time, suggests that they have properties that audiences will love too. That has been a good business for Amazon. They bought it. Apple would like to do the same thing. You’ve read his stuff, he isn’t who he seems to be, you should talk to him.”. Right? Half of that is captured by Best Buy or Walmart, it’s not going to Disney. It’s stuff that he would pay millions of dollars a year for, but he can get for free. But that’s the point. At the same time, there are three other elements there. But I think the whole point is, those businesses look very similar because they’re going after the same consumers with equivalent projects. Now, from the outside, it looks like that era is over and what they want to do is big swings, a Lord of the Rings prequel, everything has to be bigger, bigger, bigger, bigger audiences. “Branching narratives.”, That’s the term. They show something in the room, but they can’t stream — which, by the way, Disney just did for their investor day. And even then, an average of 96% of users still spend not a penny and 50% of revenue comes from the 0.4% willing to spend a lot. Right, so if Apple gets this wrong, right, let’s say they just completely boff this. Tens of millions of AT&T households will get HBO Max for free, as will tens of millions of Verizon Wireless customers receive Disney+ or Quibi, with millions of Disney theme park customers getting Disney+ free, while Comcast customers will get Peacock, and so on. The shift towards Netflix/pay-TV-styled “all you can eat” content subscribers, such as Apple Arcade, Google Play Pass and Xbox Game Pass, may also curb category revenue. Actually, I think I’m going to do video gaming. You’re a big Netflix fan, but you’re also a Disney fan. Because the networks are pulling stuff back, and/or they’re saying we don’t want to pay network X for this stuff. You needed a different line into your house to watch ABC versus ESPN. Yeah, that’s sort of standard for that sort of thing. So, now you’re on the outside. Amazon is “guaranteed” to be one of them, he says. And while it sold to Disney, it’d be imprudent to call The House of Mouse a “content” company. An aggregated bundle of all genres, all styles, that is intended to deliver to audiences for multiple hours per day of usage. It was very strange to have two of our first three shows be Greek letters. For years, the dominant bear thesis for Netflix was that every big media company would launch at Netflix-style service, only with “better” content and a deeper balance sheet. The company’s first big hits were shows like Transparent, which Ball described as “coastal, upper-income programming” aimed at early adopters of Amazon Prime. It’s kind of fun to watch the recursive ... Yeah, for you. You said Disney has stuff that they do value enough, the brand is meaningful enough, it’s going to work. The narrative about Matthew Mayer—that his overconfidence is why he used to turn down shots as often as an alcoholic on $2 fireball night—is wrong. Yeah. We spent a lot of time in the Despicable Me corner of the world. Point taken. More recently, it has announced plans to make shows based on the Lord of the Rings and Wheel of Time books. Not only does this mean it can withstand failure, but its parent can now recoup this investment across everything from theme parks, consumer products, broadcast and cable television networks, and consumer hardware and/or telecoms service. And going for the second-best-selling novel of all time and trying to do something new and ambitious is an incredible pathway to that.”. If you’re not hanging out in LA, it’s the Brooklyn of LA. I do take it seriously, and I think to some extent, that focus does explain why the company has been so resilient. I’m talking to you from Vox Media headquarters in New York City. We had renewed for X million dollars per year. The important symbolism of Joe Biden’s memorial to Covid-19’s victims, The most bizarre thing about Trump’s farewell speech is how normal it sounds. newsletter. You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast. Yeah. But they haven’t had the choice to live in an unbundled world, up until now. Peter Kafka: This is Recode Media. Marvelous Mrs. Maisel is a marvelous show. Facebook, I think, is still exploring this idea. Right. It was really strange because, of course, I’m still young, I put on a suit, I had a tie, which is not the way to do it with Jason when he doesn’t know you. You may come back again, because I’ve got more questions for you. If you pick up Fortnite for the first time ... Yeah. At least, not yet. But most consumers won’t need to make that choice. What should we charge to untap Matt Ball’s brain? Okay. Amazon is “guaranteed” to be one of them, he says. And then, at some point, you end up at Amazon. And we have the capital, we have the talent, the tech, and the reach.” That was an incredibly large purview and that’s just exciting. It just so happened that if the new thing is SVOD, having an à la carte premium cable network positioned you phenomenally well. That’s part of what you do. One is, as with the Netflix pieces, it’s a frustration with a narrative that I think is wrong and I have the selfishness to want to correct it. So the big story, and then if you look at Netflix, is really about distribution. The Capitol rioters put themselves all over social media. Let’s start with that, because I do want to ask you about Disney and Apple and Amazon and all those things and how you got to what you’re doing, but what are you doing today? Amazon Music Unlimited, meanwhile, gives Prime customers a 20% discount – even though Amazon’s per customer costs are even higher than Spotify’s. Right? This is funny. Music is an even more modest $33B. No. Vox’s work is reaching more people than ever, but our distinctive brand of explanatory journalism takes resources. Ultimately, this may mean the “Streaming Wars” never happen – or not directly, at least. Once you look at those default subscriptions, the free services like Apple, like Amazon, the effectively free services like a Netflix, the guaranteed services, or at least very compelling services like Netflix, you start to get into a world in which you are spending $20-30 getting a tremendous amount of content. Considering where the Reds finished last season, steady progress for … It’s not about maximizing the share of a consumer’s video time or video spend or video data, but monopolizing a consumer’s free time, spend, and data. Any reason to think that the fact that Disney has not been in the business of streaming, it doesn’t have that technical expertise that Netflix has been building for years and years and years and had to go out and buy it, via BAMTech, etc., that that will be an issue for them? They call it something branched storytelling. The music industry is growing faster than it has in decades, but at only $33B in consumer spend, it could double and still feel anemic. At Amazon, there was a need to carve out, well, how are we going to do this? With David Fincher and Kevin Spacey and it looks like it could be an HBO show. I really value Disney. There’s always this question of, what is Amazon going to do with live sports? Manchester United are in year two of what is supposed to be a three year rebuild. a $100MM show costs $100MM irrespective of how many users you have, but the per user cost goes down). And the tech companies themselves have built businesses around selling other companies’ media subscriptions – they certainly don’t want to destroy them. It even turns down the $200B+ market for video advertising! As digital media executives Matthew Ball and Alex Kruglov recently explained on Recode, even Netflix has started to move away from such data-driven creative decisions: ... Vox … After its own bout with disaster, Columbia Pictures was purchased by Coca-Cola (!!! “Hey, we’ve got to talk about this,” yeah. But as OTT distribution has deflated almost all of these advantages, it’s no surprise that margin profiles and ambitions have changed. Let’s talk about Lord of the Rings, right? This was two years in the making? Matthew Ball. One is that consumers today are going to value that in an à la carte experience. Five years ago, iTunes was so laughably dominant in that space. Okay, so you do the standard, “I’m going to be a consultant”? I connected with a guy, Ted Hope, who now runs original movie production at Amazon. Where you say, “well, if we make our stuff more interactive, thus we’ll compete more with Netflix.” That’s just saying one of the things our customers might want to do is interact with our video. I think no one would be successful at any level in that company if they couldn’t say that they affected a decision one way or another. “The goal with everything that Amazon does is to satisfy customers and to give them the fullest range of possible options.”. Why Amazon is going to be one of the winners of the streaming video wars, This story is part of a group of stories called, Donald Trump just issued a surprise pardon for the man at the center of an epic fight between Google and Uber. But who owns that screen? See the complete profile on LinkedIn and discover Matthew’s connections and jobs at similar companies. 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