Netflix this week announced this week that it added nearly 15.8 million net new subscribers worldwide in the first three months of the year, more than double its (pre-Covid) forecast of 7.0 million. In addition to goosing the streaming service’s share price, the Q1 results should put an to speculation that while widespread stay-at-home orders might boost Netflix viewing in homes that already have it but might not lead to many new signups among newly cautious consumers.
In its quarterly letter to shareholders, however, the company warned that the effect is likely temporary — a result of cooped up people starved for entertainment — and could go into reverse later in the year if some of the current social-distancing requirements begin to ease.
“We've had an increase in subscriber growth in March,” CEO Reed Hastings said in a video interview with analysts. “It's essentially a pull forward of the rest of the year. So our guess is that subs will be light in Q3 and Q4 relative to prior years because of that.”
The coronavirus lockdown is also likely pulling forward subscriber growth at Disney+. After bursting out of the gate to 26 million subscribers in its first three months, it took just two more months for the new streaming service to reach 50 million, as desperate parents trying to work from home while watching their out-of-school kids dialed up Mickey to babysit.
Other new video streaming services are actively seeking to pull forward some growth as they look to establish themselves in the market.
WarnerMedia is basically giving away HBO Max as it tries to take advantage of the current spike in in-home viewing to build scale quickly. The new service will be bundled at no extra cost into parent-company AT&T’s premium pay-TV, internet and wireless plans when it launches on May 27. Even non-top tier subscribers will be offered free trials of HBO Max for various lengths of time.
“With AT&T as a key distribution partner, we expect HBO Max to achieve an impressive level of scale and reach at launch,” Bob Greenblatt, chairman of WarnerMedia Entertainment and Direct-To-Consumer, said in a press release.
NBCUniversal, whose upcoming Peakcock service is scheduled to go wide in June after launching on parent-company Comcast’s platform this month, said it was considering moving up the rollout to capitalize on the immediate demand for viewing options.
That haste is certainly understandable. The current, unanticipated surge in demand is being gobbled up by Disney+ and Netflix while WarnerMedia and NBCU look on from the sidelines. Some of the organic growth being pulled forward by the two leaders, moreover, may not be merely their own. It’s unclear how many streaming services consumers will ultimately pay for, even once the economy is re-opened, and it’s possible the surge in signups for Netflix and Disney+ are pulling forward demand from the market as a whole simply by virtue of being available now.
Whether that strategy will ultimately prove wise, however, is another matter. Production of new content has been shutdown around the world, which could begin to constrain supply come the fall. With their deep libraries, well-filled pipelines and well-established brands, Netflix and Disney+ can probably weather the downturn. But in reaching for scale now, the new kids on the block could leave themselves exposed to a lot of disappointed consumers if they’re unable to deliver a sufficient amount of compelling content once the free trials run out.
That’s not to say they won’t be able to deliver. But they’re yet to prove it.
RightsTech Headlines
Australia to Force Google, Facebook to Pay for News Content
Treasurer Josh Frydenberg said the Australian Competition and Consumer Commission would release in late July draft rules for the platforms to pay fair compensation for the journalistic content siphoned from news media. Frydenberg said he believed that Australia could succeed where other countries, including France and Spain, had failed in making Google and Facebook pay.
Source: Australia to force Google, Facebook to pay for news content
Spotify now enables fans to pay artists money direct, via Cash App and PayPal.me
The streaming platform has long enabled artists to highlight a piece of music on their profile via the ‘Artist’s Pick’ headline. Now, Spotify has launched a sister version of this feature, ‘Artist Fundraising Pick’, which allows acts to pin a specific destination on their profile where fan can pay them ‘tips’.
Source: Spotify now enables fans to pay artists money direct, via Cash App and PayPal.me partnerships
Implementing User Rights for Research in the Field of Artificial Intelligence
Many of the most useful text and data mining and artificial intelligence projects involve the use of copyright-protected works. The BlueDot project that discovered the novel coronavirus outbreak, for example, analyzed “a variety of information sources, including chomping through 100,000 news reports in 65 languages a day” to recognize patterns between health outbreaks and travel.
Source: Implementing User Rights for Research in the Field of Artificial Intelligence
10 Million People Watched the Dropkick Murphys Play Online.
The Dropkick Murphys were scheduled to play six club dates in Boston around St. Patrick’s Day. Coronavirus ended that plan. Instead, the Celtic-influenced punk band played a single show on a soundstage March 17 and streamed it online. In place of the 10,000 or so people who could have attended the gigs, 10 million fans tuned in.
Source: 10 Million People Watched the Dropkick Murphys Play Online. Is That a Business
Trailers
Blacked out screens
President Trump included movie theaters among the businesses he thinks should be allowed to re-open quickly, and Georgia governor Brian Kemp wants to see them open in his state next week. But theater owners aren’t so keen on the idea. “At this time, we have not made a decision when to reopen” Regal Cinema said in a statement. “In order to open our theatres, at first we will need to ensure the safety of our guests and employees. At the same time, we are working closely with our studio partners on when they will make their movies available”
Shifting screens
Theater owners may be “working closely” with their studio partners “on when they will make their movies available,” but their studio partners may have other ideas. WarnerMedia CEO John Stankey told investors this week that the future of Warner Bros. theatrical release is under review. “We’re evaluating our product distribution strategy, relooking at volumes and the required support levels we need in a down economy,” Stankey said. “We’re rethinking our theatrical model and looking for ways to accelerate efforts that are consistent with the rapid changes in consumer behavior from the pandemic.”
Media’s ‘Darwinian moment’
News consumption is spiking in the shadow of the Covid-19 pandemic, but news industry is facing a “Darwinian moment,” as advertising spending craters as a result of the economic shutdown. “For the first time in history, you’re probably going to have the highest point of media usage in the history of the United States and the lowest point of advertising in the U.S.,” former AOL CEO Tim Armstrong told The Information this week.