Mirror Mirror

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Netflix’s content chief Ted Sarandos once famously quipped that his goal was for Netflix to become HBO “faster than HBO can become us.” By that he meant, for Netflix to establish itself as a high-end global TV content brand before the reigning high-end global TV content brand, HBO, could un-tether itself from the legacy pay-TV ecosystem.

So far, Netflix is winning that race. The streaming service now reaches over 100 million subscribers worldwide, more than the entire U.S. pay-TV universe, and will spend upwards of $8 billion in 2018 producing 700 original series.

What’s more, Netflix has successfully colonized HBO’s home turf in the living room. Although today you can watch Netflix on virtually any connected device nearly anywhere in the world, the company reported this week that 70 percent of its streams are delivered to a stationary TV set, either directly via smart TV app, via streaming box, or via its growing number of integrations with traditional pay-TV platforms. Read More »

Broadcasters’ Goal-Line Stand

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CBS Corp. chairman and CEO Les Moonves has long been one of broadcast television’s most indefatigable boosters, so it was no great surprise this week to hear him tell an investor conference that he expects the traditional broadcast networks to remain the mainstay of the National Football League’s TV rights package when the current contract is up in 2022, despite the near-certain interest from Facebook, Google, and other aspiring digital TV outlets.

“Look, the tech giants all want to be involved in the NFL. It’s the best product in television,” Moonves told the Deutsche Bank 2017 Media and Telecom Conference. “There’s going to be a lot of activity. As we head toward that large deal, I think these companies are going to be part of it, [but] I think the NFL still believes in the sanctity of broadcasting.”

Moonves was also likely correct in his assessment. Despite the accelerating pace of cord-cutting, and the ongoing unbundling and rebundling of the pay-TV ecosystem, and declining overall viewership the broadcast networks remain atop the ratings heap. While all of those trends are likely to accelerate further between now and 2017, the broadcast networks are likely to remain the NFL’s most efficient path to the largest audience, however those channels end up being delivered. Read More »

Netflix Is A Ratings Winner

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NBCUniversal president of research and media development Alan Wurtzel got a bit cheeky with Netflix this week, leaking some preliminary data from Symphony, the network-backed rating system (still in beta) that uses audio-recognition technology to measure viewership of unrated OTT channels like Netflix.

According to Wurtzel, Symphony measured the average audience in the 18-49 demo for each episode of Netflix original series within 35 days of their debut on the service between September and December, and over that time Netflix’s most-watched show was “Jessica Jones,” which averaged piper-orange-is-the-new-black4.8 million viewers per episode. “Master of None” was second, with an average audience of 3.9 million, while “Narcos” pulled in 3.2 million per episode. “Orange is the New Black” remains Netflix’s most-watched series, according to Wurtzel, but the current season was released in June and most of the viewing happened during the summer. During the period covered by the study, OITNB averaged 644,00 viewers per episode.

In comparison, the most watched scripted series in the 18-49 demo on linear TV channels during the 2014-2015 TV season, in the live-plus 7-day window, AMC’s “The Walking Dead” averaged 13.2 million viewers per week, followed by Fox’s “Empire” at 9.0 million and CBS’ “Big Bang Theory” at 8.3 million. Read More »

The Bills, Jaguars And Peak-NFL

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Given how little good news Yahoo has had to share with investors lately it’s no surprise that the company is trumpeting the results of Sunday’s first-ever globally live-streamed regular season NFL game, between the Buffalo Bills and Jacksonville Jaguars, which attracted 15.2 million unique viewers and 33.6 million total views. Those numbers make it one of the biggest live-streamed events to date, and compare favorably with the TV audience for  a typically Thursday night or Monday night regular season game, according to the NFL.

“We’re thrilled with the results of our initial step distributing an NFL game to a worldwide audience and with the work of our partner, Yahoo,” NFL senior VP of media strategy, business development and sales,Hans Schroder said in a statement. “We are incredibly excited by the fact that jaguars-billswe took a game that would have been viewed by a relatively limited television audience in the United States and by distributing it digitally were able to attract a global audience of over 15 million viewers.”

Yet as others have pointed out, the reported numbers don’t tell the whole story. Yahoo had to resort to some trick plays to score some of those points, like putting a muted auto-play video of the game on the home pages of several of its properties, which means your Aunt Minnie, who has never watched an NFL game in her life but uses Yahoo as her personal home page, is somewhere in that 15 million. The comparison with broadcast TV viewership is also overstated. As Brian Stetler of CNN pointed out, the 460 million total minutes of football Yahoo claims to have streamed, over the course of a 195-minute game, implies an average of just 2.36 million concurrent viewers, the streaming metric most comparable to TV ratings. Read More »

The Co-Dependent Marriage Of TV and Sports

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According to a report released this week by PriceWaterhouseCooper, the revenue earned from media rights by the North American sports industry will surpass the revenue earned at the gate by 2018, when they’ll reach $19.95 billion and $19.72 billion, respectively, fulfilling the old adage that the sports business is really the TV business.

Increasingly, the reverse is also true: The TV business is really the sports business.

More than a third of all TV advertising in the U.S. today goes to live sports, and that doesn’t include ESPN, which shows a mix of live sports and sports-related programming. Add in ESPN and the share of advertising going to sport programming would top 40 percent, Advancit Capital partner and former Fox Digital president Jonathan Miller estimated from the stage at the New York Media Festival earlier this month. Franklin_Gutierrez_hitting_HRAt the same time, according to SNL Kagan, sports networks account for nearly 20 percent of the carriage fees paid by cable and satellite operators, and that doesn’t count the portion of the carriage and retransmission fees paid to broadcasters and general-interest cable networks that can be attributed to the sports programming they carry. According to an analysis last year by MoffettNathanson analyst Michael Nathanson, the aggregate of sports rights account for as much as 50 percent of the cost of the average cable bill. Read More »

Broadband Rubicon Crossed? Cablevision, CBS Reach OTT Retrans Deal

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Cablevision is boasting today of becoming the first cable or satellite provider to offer CBS’s OTT channel, CBS All Access, to its broadband subscribers.

The multiyear deal between the network and the MSO includes retransmission consent for CBS-owned stations and continued carriage by Cablevision of Showtime, CBS Sports Network and the Smithsonian Channel, in addition to CBS All Access.

“This comprehensive new agreement builds on our strong relationship with CBS and ensures that every Optimum customer gets the highly popular CBS content they want across multiple platforms and screens,” Cablevision EVP of programming Tom Montemagno said in a statement. “As the first distributor to agree to provide tony_sopranoCBS new Internet services, Cablevision continues to expand its portfolio of next-generation offerings, connecting customers to the programming they value when and where they want it.”

For those who have paid attention to Cablevision in recent months the CBS deal is no big surprise. The MSO has been drifting away from the traditional pay-TV model since it introduced its “Cord Cutter” package earlier this year that included broadband service and an over-the-air antenna for tuning in broadcast channels. It was also the first operator to offer Hulu to its broadband subscribers and was a launch partner for HBO Now. But the CBS deal represents the first time that Cablevision — or any other MVPD — has licensed an OTT service as part of a broadcast retransmission deal.

I’m not sure other cable ISPs would see that as something to boast about. Read More »

The Unknown Unknowns Of Buying Sports Rights

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The process of deciding whether to greenlight a movie in Hollywood involves a lot of variables and input from multiple studio divisions, but the math is pretty straightforward: Each distribution unit — domestic theatrical, international, home entertainment, TV, etc. — is asked to estimate how much revenue it could deliver based on the “elements” attached to the proposed film (script, director, stars), the genre, the proposed timing of its release, competing projects at other studios, and other such factors.  Each division, in turn, has its own methodology for arriving at its estimate, based on the track records of the stars/director/etc., the performance of “comparable” recent films, and so forth.

march_madness_tbs_cbsThose projections are then weighed against the project’s proposed budget and projected marketing costs, allowances are made for non-quantifiable variables (star relationships, etc.), and a reasonably well-informed gut call gets made.

The process of approving franchise sequels is even more straightforward since many of the numbers are hard-coded before there’s even a script. The movies may still flop, due to creative failures, marketing miscalculations or shifts in the zeitgeist, but at least the people making the call know what they can’t know.

Compare that with the challenge facing TV sports rights buyers. Speaking at the Second Screen Society’s Sports Summit in New York this week, executives from two of the biggest buyers of sports rights — CBS and Turner — highlighted the growing number of unknown unknowns facing sports buyers. Read More »