With c.22m accounts across 44m devices, Roku has a US footprint which exceeds the largest pay-TV platforms
Limited competitive advantages highlight the scale of this achievement, but also leave the pioneering firm vulnerable to activities from bigger, wealthier rivals Apple, Amazon, and Google as well as pay-TV providers
The odds are stacked against Roku, but continuing the innovation in production and product that built its lead may secure future success
The number of people willing to pay for online news now roughly matches print paid circulation, and will soon be substantially greater, with publishers increasingly demonstrating that their strategies are influencing industry outcomes
Our thesis is that subscriptions work in some cases, but that a more systematic reader-first approach benefits all cases, recalibrating management focus to media’s core purpose
Effectively implementing such an approach is a more radical, transformative development than is sometimes assumed. The winners will deploy sophisticated, bespoke audience acquisition and retention funnels and undergo detailed appraisals of the trade-offs necessary for optimal user experiences
The Information Commissioner’s Office reported on the UK online advertising sector, finding common industry practices unlawful under a strict interpretation of the GDPR and UK privacy law
The ICO focused on problems around transparency, consent and data sharing in the Real-Time-Bidding ecosystem, which comprises 16% of UK online ad spend, but most of publisher online ad revenue. The ICO is giving the industry six months to shape up, with the next steps still unclear
The Competition and Markets Authority has had under consideration an investigation into the entire online advertising sector, but is hampered by Brexit-related considerations
Video sharing platforms, like YouTube, Facebook Watch and Twitch, are vying to attract creators with monetisation options such as branded content and user payments.
Advertising income, already limited for many small and medium-sized creators, has been undermined by YouTube’s response to brand safety concerns.
The new tools come with their own obstacles, but are necessary to keep platforms attractive to video creators.
Disney announced that it would acquire Comcast’s 33% share of Hulu in a put/call agreement that can be enacted by either party from January 2024, while taking full operational control of the vehicle immediately.
Under the agreement Disney will pay Comcast a minimum of $9 billion for its current stake, provided Comcast fulfils agreed capital calls, which going forward would be just over $500 million/year.
Disney secured the continued licensing of NBCUniversal content for Hulu, contributing about 30% of Hulu’s library, but Comcast can loosen obligations to Hulu for the launch of its own SVOD service in 2020.
After the most challenging period in its history since 2012, Facebook has been able to stabilise its fundamental metrics and announce a major product overhaul
Despite talk of a business model pivot, Facebook’s focus remains on advertising, whose growth will remain concentrated in developed markets
News publishers wishing to stay relevant on the upgraded product set need to target exclusive layers of social interaction, with groups particularly important
Disney now controls third-party content aggregator Hulu, which has 25 million subscribers in the US. Ramped up by Fox content, Hulu’s operating losses are expected to peak in FY2019 at $1.5 billion, with profits by FY2023 or FY2024
Serving only Disney content, Disney+ launches in the US at the low price of $6.99/month this November, and in 2020 in Europe and Asia Pacific in 2021, aiming to reach the challenging goal of 60-90 million subscribers in five years
ESPN+, Hulu, Disney+ combined could contribute 13% of Disney’s revenues by 2024, which does not intend to disturb existing channels and windows for catalogue and new content, aside from withdrawing content from Netflix
The economic model of TV production relies upon a vibrant market for back catalogue content; programming that has traditionally driven the desirability of many linear channels and slots
New release strategies, along with the hyper-concentrated viewing encouraged by video-on-demand and the round-the-clock availability of shows calls the longevity of the value of content into question
Our analysis suggests that programmes that previously would be leisurely distributed through broadcast could now feasibly be “worn out” more quickly. This could have ramifications for the whole sector, with more content investment required “upfront” and new financial and distribution models required
Out of Home (OOH) is bucking the trend in UK traditional media and continues to grow, driven by the digitisation of inventory as the paper estate recedes
Digital OOH now accounts for 50% of total OOH ad spend. Soon digitisation will slow, as much OOH inventory cannot be converted from posters to digital screens; sustained growth will require a different form of change
The industry is amidst structural shift – driven by consolidation and automation – which could be wholly positive, but a lack of cooperation between major players risks stifling innovation and the medium’s growth
Google’s Stadia promises the most credible game streaming service yet, but building a subscription bundle of top titles would require an all-out bet in the sector
Google is building its own game studios – to win over others it must overcome a troubled history in gaming, mitigating risks to developer business models and creative integrity
Games are much more technically demanding to stream than video, presenting an advantage to Google, Microsoft and Amazon – and a boost to telecoms network demand, welcomed by operators