Ultimate Resource On Online Streaming Services
Music Publishers Propose Higher Streaming Payments (Updated: 10-22-2021). Ultimate Resource On Online Streaming Services
The Copyright Royalty Board will determine new rates for songwriters and publishers for streams of their songs.
Music publishers are demanding a bigger piece of the streaming pie for songwriters.
The National Music Publishers Association and five major streamers—Spotify Technology SA, Apple Inc., Amazon.com Inc., Alphabet Inc.’s YouTube and Sirius XM Holdings Inc.’s Pandora—this week are duking it out in front of the Copyright Royalty Board, a three-judge panel that sets the statutory licensing rates that digital-service providers pay publishers for on-demand audio streams of their songs.
The publishers argued in proposals that were due Wednesday at midnight for nearly doubling the current rate, while the streamers are angling to pay less—rates effectively below 2008 levels.
For years, publishers and songwriters have bristled over payments from streaming and say they are paltry—about one fifth what labels and recording artists collect. The NMPA proposed raising the rate to 40% of what labels are paid.
“This would start to correct the imbalance in terms of how streaming money is divided among the parties,” the trade group’s chief executive, David Israelite, said in an interview.
Garrett Levin, chief executive of the Digital Music Association, which represents the streaming companies, pointed to a flood of investment in artists’ catalogs and the highly competitive landscape for music, highlighting that streaming has helped turn around the fortunes of the music business—for artists, publishers and labels alike.
“How do we make modern music economics work for everyone?” he said. “That should be our focus—preserving long-term industry growth and ensuring that it benefits as many people as possible.”
The battle over streaming-royalty payouts comes as financial players such as Blackstone Inc. and KKR & Co. bet billions of dollars on song catalogs—assets now seen as both increasingly valuable thanks to the growth of online streaming and untethered to broader market fluctuations.
The current copyright-board proceedings establish the rate for compulsory mechanical royalties earned whenever a song is reproduced in an on-demand stream format.
The rate is set by the three judges every five years. The publishers’ and streaming services’ proposals for 2023-27 are expected to be made public in the coming days.
The NMPA has proposed that in a given reporting period, streamers pay publishers whichever is the largest of four sums: 20% of their service’s revenue; 40% of what is paid to record labels and other master recording copyright holders; $1.50 per subscriber; or $0.0015 per stream.
While each service has put forward its own proposal, Mr. Israelite says all five represent a less-lucrative rate structure for publishers than the 10.5% of revenue set during the first copyright-board proceedings in 2008.
“They are proposing the lowest royalty rates in the history of interactive streaming,” said Mr. Israelite. “Not only do they want to roll back increases from the last 15 years, but also effectively cut them further than the beginning point of 2008.”
The tussle over future publishing payments is happening while current rates are still in flux. After the publishers won a 44% increase for 2018-22—to 15.5% of streaming services’ overall revenue in the final year of the period—Spotify, Amazon, YouTube and Pandora appealed the decision, and the U.S. Court of Appeals for the District of Columbia Circuit last year told the copyright board to try again.
While the parties have agreed that when the rate is determined, it will apply retroactively, the streaming services meanwhile are generally paying under the 2017 rate structure, or 10.5%.
YouTube said it is not seeking lower rates in the 2023-27 proceeding and that it will accept the rates that the copyright board hands down in the pending remand decision.
The other services didn’t respond or declined to comment.
Mechanical licenses date back to the early 20th century. In 1909 Congress decided music publishers had a monopoly on player-piano rolls, then a popular recording medium, and passed a law requiring them to license their copyrights, with the government setting the price.
(Record labels, which control masters, or the sound recordings of songs, aren’t subject to such compulsory licensing and negotiate with the services in the free market.)
“We’ve never been able to get rid of it. It keeps us trapped and we have no bargaining power,” said Mr. Israelite. When Taylor Swift pulled her catalog from Spotify in 2014, he said, she did that as a recording artist.
“She didn’t have the right as a songwriter,” he said.
Publishers say streaming is only one part of their income, and in areas where they are able to negotiate for copyrights in the free market, such as licenses for TikTok and Peloton, they are getting better rates.
Mr. Israelite also says catalog buyers are factoring in a higher rate to come once the copyright-board proceedings are completed.
Netflix Co-CEO Says He ‘Screwed Up’ When Defending Dave Chappelle Special
‘I should have recognized the fact that a group of our employees was really hurting,’ Ted Sarandos says in interview.
Netflix Inc. Co-Chief Executive Ted Sarandos said he “screwed up” in his efforts to communicate with employees who were upset over “The Closer,” a recent comedy special by Dave Chappelle in which he made remarks that some viewed as offensive to the transgender community.
In emails to Netflix staff after the special’s debut earlier this month, Mr. Sarandos defended “The Closer,” citing its popularity on the platform and the company’s commitment to creative freedom. He also said the company believed “content on screen doesn’t directly translate to real-world harm.”
In “The Closer,” which was released earlier this month and is currently among the most-watched programs on the service in the U.S., Mr. Chappelle said “gender is a fact” and said he identified as a “TERF,” an acronym that stands for “trans-exclusionary radical feminist.” He also compared the transgender community to people who wear blackface.
“What I should have led with in those emails was humanity,” Mr. Sarandos said in an interview Tuesday evening. “I should have recognized the fact that a group of our employees was really hurting.”
Mr. Sarandos said his remarks on content not causing real-world harm was also an oversimplification and lacking in humanity.
“To be clear, storytelling has an impact in the real world…sometimes quite negative,” he said.
A Netflix transgender-employee group is encouraging all employees to take Wednesday off as a form of protest against Netflix for its decision to continue to work with Mr. Chappelle and its reaction to their concerns.
Mr. Sarandos, who is also Netflix’s chief content officer, said he isn’t second-guessing the decision to carry “The Closer,” nor are there plans to remove it from the streaming giant’s platform.
“We have articulated to our employees that there are going to be things you don’t like,” Mr. Sarandos said. “There are going to be things that you might feel are harmful. But we are trying to entertain a world with varying tastes and varying sensibilities and various beliefs, and I think this special was consistent with that,” he added.
Standup comedy is “designed to stir up emotions” Mr. Sarandos said. And while Netflix prides itself on having an inclusive staff and programming featuring a range of diverse voices, “sometimes inclusion and artistic expression bump into each other,” he said.
“The Closer” is currently among the top 10 most popular Netflix shows in the U.S., and it was as high as No. 3 earlier this week. Mr. Chappelle has made several specials for Netflix, and all have been among its most popular offerings.
Criticism of the “The Closer” put Netflix on the defensive just as it was riding high from the success of “Squid Game,” a South Korean dystopian drama that made its debut last month and quickly became a global phenomenon.
In the interview, Mr. Sarandos said Netflix has spent an enormous amount of money creating content for and by the LGBTQ community and would continue to do so.
“I’m firmly committed to continue to support artistic freedom for the creators who work with Netflix and increase representation behind the screen and on camera,” he said, noting these goals may at times be in conflict with each other.
“We have to figure out how to navigate those challenges,” Mr. Sarandos said.
Netflix Employee Who Criticized Dave Chappelle Has Resigned
Software engineer Terra Field and her former colleague are also dropping unfair labor practice complaint against streaming company.
A Netflix Inc. employee, who was a vocal advocate against Dave Chappelle’s stand-up special “The Closer,” said she has resigned from the streaming company.
The employee, Terra Field, and her former colleague B. Pagels-Minor are also dropping a formal complaint against Netflix filed with the National Labor Relations Board that alleged the company quelled employees from speaking up about working conditions.
A labor lawyer representing the two Netflix employees said her clients were able to resolve their differences with Netflix.
“My clients, Terra and B., are very courageous and inspiring people and were able to shed light on an important topic in a thoughtful and meaningful way,” attorney Laurie Burgess said. She declined to comment on specifics of the negotiations between the parties, including whether there was a settlement.
“We have resolved our differences in a way that acknowledges the erosion of trust on both sides and, we hope, enables everyone to move on,” a Netflix spokesman said.
B. Pagels-Minor was fired from Netflix last month for leaking financial information, including production costs for “The Closer,” outside the company that ended up appearing in a Bloomberg story.
Ms. Field was suspended in October and quickly reinstated by the company for attending an online meeting of senior Netflix executives without permission. She said she resigned as of Sunday.
“This isn’t how I thought things would end, but I am relieved to have closure,” Ms. Field, a transgender now-former Netflix software engineer, wrote in a statement published online.
“Shortly after B. was fired for something I did not and do not believe they did, I made a decision: sink or swim, I was going to walk side by side with B. as they had for so many of us while they led the Trans* ERG,” Ms. Field said, referring to an acronym of the company’s employee resource group.
Before her suspension last month, Ms. Field posted a viral thread on Twitter about Mr. Chappelle’s comedy special, which she said “attacks the trans community, and the very validity of transness.”
“The Closer” was among the most-watched programs on Netflix in the U.S. last month. It led to swift backlash and ultimately prompted protests outside one of Netflix’s Los Angeles offices, as some employees released demands for management and staged a walkout.
Netflix co-Chief Executive and Chief Content Officer Ted Sarandos stood by the special in emails to staff, saying the service wouldn’t pull it down and that he didn’t think the special incited hate or violence.
Mr. Sarandos later said he “screwed up” in his efforts to communicate with employees. “What I should have led with in those emails was humanity. I should have recognized the fact that a group of our employees was really hurting,” he said.
In “The Closer,” Mr. Chappelle said “gender is a fact” and said he identified as a “TERF,” an acronym that stands for “trans-exclusionary radical feminist.” Mr. Chappelle said he isn’t a favorite of the trans community, then added, “Someone told me, ‘They after you, Dave,’ and I said, ‘One they or many theys?’”
He also was critical of how the trans community has responded to his previous specials, as well as for attacking other artists who have made comments or expressed opinions that have been criticized by the LGBTQ community.
“Stop punching down on my people,” Mr. Chappelle said at the conclusion of “The Closer.”
In a stand-up routine late last month, he told the audience he was willing to meet with the transgender community at Netflix. “I said what I said, and boy, I heard what you said. My God, how could I not?” Mr. Chappelle said.
“I want everyone in this audience to know that even though the media frames it that it’s me versus that community, it is not what it is.”
Spotify Takes Down Neil Young’s Music After His Joe Rogan Ultimatum
Folk-rock star had over six million monthly listeners on the service, which he blames for spreading fake info about vaccines.
Spotify Technology SA has removed Neil Young’s music, the company confirmed Wednesday, as the folk-rock star isn’t wavering in his objections to Joe Rogan’s podcast.
The “Heart of Gold” and “Harvest Moon” singer earlier this week penned an open letter to his manager and label asking them to remove his music from the service, saying it is spreading fake information about Covid-19 vaccines through Mr. Rogan’s show. “They can have Rogan or Young. Not both,” he wrote.
Mr. Young’s record label, Warner Music Group Corp.’s Warner Records, formally requested Spotify remove the music Wednesday.
“We want all the world’s music and audio content to be available to Spotify users. With that comes great responsibility in balancing both safety for listeners and freedom for creators,” a Spotify spokesman said Wednesday.
The company has detailed content policies in place and has removed over 20,000 Covid-19-related podcast episodes since the start of the pandemic, he added.
“We regret Neil’s decision to remove his music from Spotify, but hope to welcome him back soon,” he said.
For Spotify, the controversy is a significant test of its big bet on Mr. Rogan, one of podcasting’s most popular and polarizing voices.
Spotify struck a deal with Mr. Rogan in 2020 worth more than $100 million, according to people familiar with the matter, bringing his loyal followers and lucrative show exclusively to its service.
Mr. Rogan is central to Spotify’s podcast strategy in attracting listeners and ad dollars to its platform and shows.
While the letter has since been removed from Mr. Young’s website, he has been in discussions with his label and Spotify since then, and continued to hold his ground, according to people familiar with the matter.
Mr. Rogan didn’t respond to a request for comment.
On Wednesday, Neil Young took more jabs at Spotify on his website, calling on others to join him in removing music from Spotify.
“I sincerely hope that other artists and record companies will move off the Spotify platform and stop supporting Spotify’s deadly misinformation about Covid,” he wrote but added that he “can’t really expect that to happen.”
Spotify represents 60% of the streaming of his music to listeners, Mr. Young wrote, and pointed listeners to where his music is still available to stream, including Apple Music, Amazon Music and Qobuz, a high-res music streamer. Mr. Young also thanked his label for supporting him in his wishes to leave Spotify.
Before the removal, Mr. Young had 2.4 million followers and over six million monthly listeners on Spotify.
Mr. Rogan’s show has created tensions for Spotify before. Earlier this month, a group of 270 scientists and healthcare professionals signed an open letter to Spotify accusing the podcast of “promoting baseless conspiracy theories” and asking the service to take action against mass-misinformation events on its platform.
Some employees expressed concern over the podcast’s content during a town-hall meeting in September 2020, relating to material they felt was anti-transgender, according to people familiar with the matter.
The company stood by its star podcaster, with Chief Executive Daniel Ek saying that the ambition to make Spotify the “largest audio platform in the world” involves embracing diverse voices and differing opinions as the company chases scale in podcasting.
In 2018 Spotify introduced a “Hate Content and Hateful Conduct” policy that touched off a debate about whether streaming services should punish artists for alleged bad behavior. It faced backlash across the music industry and walked back the policy three weeks later.
By removing his music from Spotify, Mr. Young won’t collect the royalty payments connected with streaming his songs there which are split between him, his record label, publisher and other rights holders to his music.
While Mr. Young’s label is the licenser to Spotify and legally has control over how and where his music is distributed, it is typical for a record company to take an artist’s wishes into account. An act of Mr. Young’s cachet in particular tends to have more control over their career and creative output.
Last year publicly traded music investment firm Hipgnosis Songs Fund Ltd. announced a deal to purchase a 50% stake in Neil Young’s songwriting catalog. The sale fetched a price between $40 million and $50 million, according to people familiar with the deal.
While Hipgnosis investors stand to benefit from royalties when Mr. Young’s music is streamed on Spotify and other services, music lawyers say they wouldn’t have a say in the tussle with Spotify because of the way publishing rights typically work.
Streaming accounts for 84% of recorded music revenue in the U.S., according to the Recording Industry Association of America. Spotify is by far the largest music-streaming service by paid subscriptions.
Classic tunes like those found in Mr. Young’s catalog, in particular, have been streaming well, as services attract older subscribers and younger listeners discover the favorites of their elders.
During the pandemic, nostalgia listening surged even more. On streaming services, music older than 18 months is a major growth area, making up some 70% of listeners’ consumption, according to MRC Data, formerly Nielsen Music.
News Corp’s Dow Jones & Co., publisher of The Wall Street Journal, has a content partnership with Spotify’s Gimlet Media unit.
Joe Rogan Apologizes, Spotify Publishes Content Policy In Response To Neil Young Outcry
Podcaster said he aims to be more balanced; Streaming giant creates Covid-19 information hub.
Joe Rogan, responding to Neil Young’s objections to his podcast and host Spotify, said his show has grown “out of control” and pledged to be more balanced and informed about controversial topics and guests.
In a late Sunday evening 10-minute Instagram video post, Mr. Rogan said, “If I pissed you off, I’m sorry,” referring to growing backlash against him and Spotify Technology SA stemming from the folk rocker’s accusations that they spread false information about Covid-19 vaccines through the popular podcast.
“It’s a strange responsibility to have this many viewers and listeners,” said Mr. Rogan. “It’s nothing that I’ve prepared for. I’m going to do my best to balance things out.”
Mr. Rogan said he will have more guests on the show that present different opinions from contrarian ones right after he hosts controversial guests. He thanked Spotify for their support and said he’s a huge Neil Young fan.
Spotify earlier Sunday made public its policies, which it didn’t alter, and created a Covid-19 information hub in response to folk-rocker Neil Young removing his music last week from the streaming service.
Mr. Young said he objected to Mr. Rogan and particularly his podcasts about the pandemic and vaccines. His action sparked others, including folk singer Joni Mitchell, to do the same.
“We haven’t been transparent around the policies that guide our content more broadly,” said Chief Executive Daniel Ek in a blog post Sunday. “It’s become clear to me that we have an obligation to do more to provide balance and access to widely accepted information from the medical and scientific communities guiding us through this unprecedented time.”
Spotify isn’t at this time removing any of Mr. Rogan’s episodes that detractors have highlighted in recent weeks as spreading what they deem misinformation about Covid-19 vaccines, said a person familiar with the matter.
Spotify’s platform rules define what it considers to be dangerous, deceptive, sensitive and illegal content. It says creators who break its rules could face consequences including their work being removed.
The steps highlight growing pains for Spotify as it contends with the types of pitched political debates that many large content companies face.
It dove into podcasting over the past few years to expand beyond music and become more profitable, and its role as the distributor of popular albeit polarizing voices like Mr. Rogan’s has brought new challenges.
The company’s stance shows it is resolute about keeping its stated commitment to open dialogue, and its lucrative relationship with certain podcasters, while responding to concerns of various creators and customers on which it relies.
“They can have Rogan or Young. Not both,” Mr. Young wrote in a letter he posted on his website last week. Spotify struck a deal with Mr. Rogan in 2020 worth more than $100 million, according to people familiar with the matter.
Over the weekend, Ms. Mitchell and rocker Nils Lofgren joined Mr. Young in seeking to remove their music, they said.
Podcaster and professor Brené Brown said she wouldn’t produce more for the service “until further notice,” and the production company of Prince Harry and Meghan, the Duke and Duchess of Sussex, called Archewell Productions, said it has been expressing concerns to Spotify about Covid-19 misinformation on its platform.
“We know we have a critical role to play in supporting creator expression while balancing it with the safety of our users,” said Mr. Ek in the blog post Sunday. “In that role, it is important to me that we don’t take on the position of being content censor while also making sure that there are rules in place and consequences for those who violate them.”
As of Sunday, Spotify is beginning to tag Covid-19-related content with an advisory prompting users to check out the service’s new “hub for data-driven facts and up-to-date information” from the health and scientific communities.
Mr. Rogan applauded the initiative, saying he thought the advisories are a good idea.
Mr. Young in his initial letter cited an episode of Mr. Rogan’s podcast in which the podcaster spoke with Dr. Robert Malone, a virologist who worked on research into several mRNA Covid-19 vaccines but who is now critical of the treatments.
Among the claims made was the suggestion that hospitals have been financially motivated to falsely determine that deaths had been caused by Covid-19.
Earlier this month, a group of 270 scientists and healthcare professionals signed an open letter to Spotify accusing the podcast of “promoting baseless conspiracy theories” and asking the service to take action against mass-misinformation events on its platform.
While more than 40 of Mr. Rogan’s episodes have been previously removed for policy violations, none of them have been related to the pandemic, according to a person familiar with the matter.
Mr. Young has since posted more on the topic, encouraging other artists to join him and steering his listeners to other music streaming platforms. On Friday, he shared on his official Twitter account a link to an offer of four free months of Amazon Music for new sign-ups to the service.
“Amazon has been leading the pack in bringing Hi-Res audio to the masses,” said Mr. Young, referring to high-resolution audio. He also thanked streaming services Apple Music and Qobuz for “sticking with my High Res music.”
Keith Tate, a fan of Mr. Young and Ms. Mitchell, canceled his Spotify subscription. The 65-year-old from Houston said his son added him to his YouTube music account. “Works great and Neil Young is there and Joe Rogan is not,” he said.
Mr. Tate owns a company that manufactures high-end basketball equipment, where he hasn’t mandated but encouraged employees to get the Covid-19 vaccines.
“It was amazing how much disinformation there was,” he said. “It took quite a bit of encouragement. I think they all were looking for honest information.”
Mr. Tate said every person in his company is fully vaccinated and boosted now.
Mr. Rogan also thanked both his listeners and detractors. “It’s good to have some haters,” Mr. Rogan said.
Spotify’s Mr. Ek said there are opinions on both sides of any issue and that he personally disagrees with plenty of individuals and views on Spotify.
“To our very core, we believe that listening is everything,” he said.
Dow Jones & Co., publisher of The Wall Street Journal, has a content partnership with Gimlet Media, a unit of Spotify.
Joe Rogan Apologizes For Using Racial Slur During Past Podcasts
Spotify podcaster takes to Instagram after video compilation surfaces.
Joe Rogan apologized on Saturday after a video emerged of the star podcaster using a racial slur in previous episodes.
In a post on Instagram, Mr. Rogan—who hosts the popular “The Joe Rogan Experience” on Spotify—said he offered “my sincere and humble apologies” for what he called “the most regretful and shameful thing that I’ve ever had to talk about publicly.”
The compilation video of Mr. Rogan, shared by singer-songwriter India Arie, showed how Mr. Rogan and some of his guests used the N-word numerous times on his show.
Mr. Rogan said the clips were taken out of context and that they were based on 12 years of conversations. He added that they look “horrible, even to me.”
The podcaster’s response intensifies an already pitched debate about the influence Mr. Rogan’s show has and how much responsibility its exclusive host, Spotify Technology SA, has for its content.
Ms. Arie’s compilation comes as Spotify has said it was delayed in addressing outcry over Mr. Rogan’s shows about the Covid-19 pandemic and vaccines.
“I know that to most people, there’s no context where a white person is ever allowed to say that, never mind publicly on a podcast, and I agree with that,” Mr. Rogan said, adding that he hasn’t used the slur in recent years.
“I never used it to be racist because I’m not racist,” he said. “But whenever you’re in a situation where you have to say ‘I’m not racist,’ you f-ed up. And I clearly have f-ed up. And that’s my intention to express myself in this video.”
Representatives for Mr. Rogan and Spotify weren’t immediately available for comment.
Ms. Arie was one of several artists who earlier this week pulled their music from Spotify. She said she opposed the language Mr. Rogan used around race and the amount of money he makes from Spotify.
In 2020, Mr. Rogan signed an exclusive podcasting deal with Spotify worth more than $100 million, according to people familiar with the matter.
“The Joe Rogan Experience” is the No. 1 show in 93 markets, Spotify has said. In 2021, Mr. Rogan’s show was the most-listened-to podcast every month in more than 30 markets, including in the U.S., said a person familiar with the matter.
Mr. Rogan’s listeners have grown by 75% from the time he joined Spotify’s platform in September 2020 to December 2021, this person said.
Mr. Rogan began his show in 2009 and built a following largely on YouTube before signing with Spotify. The platform had previously removed more than 40 of his episodes for content policy violations, according to a person familiar with the matter.
Tracking site jremissing.com says the platform has removed 113 of Mr. Rogan’s episodes since Friday.
Other artists like Neil Young and then his former bandmates David Crosby, Stephen Stills and Graham Nash also said they were pulling their music from Spotify over opposition to what they say is misinformation about Covid-19 vaccines spread by Mr. Rogan on his show.
In response, Spotify posted its content policies and created advisories for pandemic-related shows that send listeners to an information hub about Covid-19.
Spotify recently reported it had 406 million monthly active users, up 18% from the year before. Its advertising revenue, largely tied to podcasting, was up 40%.
For Mr. Rogan, the apology was his second in a week. Last Sunday he said he aimed to be more balanced and informed about controversial topics and guests. He said his show has grown “out of control” and said, “If I pissed you off, I’m sorry,” referring to the growing backlash against him and Spotify.
News Corp’s Dow Jones & Co., publisher of The Wall Street Journal, has a content partnership with Spotify’s Gimlet Media unit.
Even The Podcast About The Joe Rogan Podcast Is A Smash Hit Now
One of the most popular podcasts in the world is a recap of Joe Rogan’s show hosted by a 40-year-old British man in Bozeman, Montana.
For millions of people, 11 hours of “The Joe Rogan Experience,” the controversial, immensely popular show on Spotify, just isn’t enough to get them through the week. To get more of their favorite podcast, they turn to Adam Thorne, the creator and host of “Joe Rogan Experience Review.”
Every week, Thorne and his co-host Garrett Hess share their favorite moments from Rogan’s hit show, revisiting its funniest bits, debating its best interviews and chewing over its most outlandish ideas, while occasionally sprinkling in their own thoughts on related topics such as stand-up comedy, hunting and the state of the media.
In many ways, “Joe Rogan Experience Review” resembles the new genre of recap podcasts that cater to diehard fans of particular TV series by feverishly analyzing every, juicy new turn of drama.
At the start of some episodes of “Joe Rogan Experience Review,” an announcer’s voice tells listeners that Thorne’s program is like “Talking Dead” to Joe Rogan’s “The Walking Dead.”
In an interview, Thorne says he’s been an avid fan of “The Joe Rogan Experience,” since it debuted in 2009. “I always found myself holding discussions about what was on his show and what we liked about it,” Thorne said. “I was fascinated by how he ran the whole show. So I thought, why not discuss that?”
Thorne’s podcast has no official affiliation with Rogan’s show but it is starting to put up Rogan-like numbers. Its audience has skyrocketed over the last year and now averages more than a million downloads per month.
In early February, it peaked at No. 6 on the Apple podcast charts and briefly became one of the 100 most popular podcasts in the world, according to Chartable.
It’s a testament to the power of Rogan’s fanbase that a podcast about his podcast draws a larger audience than almost everything else in a booming market, including countless programs hosted by other famous comedians.
It’s also another reminder of why Spotify Technology SA has been unwilling to dump Rogan despite a fierce backlash from artists like Neil Young who are upset with the host and his backers for spreading vaccine misinformation.
Since the fall of 2018, a second Joe Rogan recapping podcast, called “The Joe Rogan Experience Experience,” has also been vying for the attention of Rogan fans. It too pulls in a sizable audience. Currently, however, “The Joe Rogan Experience Experience” is not as popular as “Joe Rogan Experience Review.”
Until now, Thorne, a soft-spoken, 40-year-old Brit, has avoided doing any press about his show. He says the whole thing started in 2016 as a way to work on his stand-up comedy material.
“I never did this to have a lot of people listen,” Thorne said. “It was never the intention.”
Born near Bristol, England, Thorne grew up listening to Monty Python tapes with his father and adoring the comedy of Rowan Atkinson. In his mid-30s, he was living in Los Angeles and pursuing a career in comedy, working open mic nights at local clubs.
While many of Thorne’s peers made podcasts chronicling their efforts to make a living telling jokes, Thorne, who is a martial arts enthusiast, felt inspired by some advice from Rogan, a longtime commentator for the Ultimate Fighting Championship.
“He would always say, ‘Just do something you either know a lot about or are interested in,’” Thorne said.
What Thorne was most interested in was Rogan. At first, Thorne knew nothing about podcasting. In his early episodes, he would talk for about 10 minutes at a time reviewing the latest offering from Rogan. The results often sounded amateurish and attracted few listeners.
Thorne kept experimenting. After about a year, he settled on a formula that he still uses today. He added a co-host and rather than review every show, he began compressing his reviews into one weekly episode that goes on for about an hour.
Some commenters accused him of piggybacking off of Rogan’s success, especially with the show’s name, which might give some people the mistaken impression that Rogan himself will be appearing therein.
To this day, given the similarity of titles, anyone who goes hunting for Rogan’s podcast is likely to stumble accidentally upon Thorne’s.
“I probably should have picked a more creative name, but I just didn’t,” Thorne said.
Throughout 2018 and 2019, Thorne’s show steadily added listeners. The program really took off in 2020 when Rogan signed an exclusive deal with Spotify. By the second half of the year, Rogan’s podcast had disappeared from other platforms.
People using Apple’s podcast app or Amazon Music could suddenly no longer find “The Joe Rogan Experience.” But they could find “Joe Rogan Experience Review.” Thorne’s audience ballooned.
“When he went over to Spotify is when I started getting much bigger numbers,” Thorne said.
Established podcasting companies like Podcorn and Gumball work with Thorne to help monetize his show, which speaks to the same core demographic as Rogan’s: men between the ages of 18 and 45. Many of the same advertisers for Rogan’s show, such as ExpressVPN, now also buy air time on “Joe Rogan Experience Review.”
Thorne wouldn’t disclose how much money he makes from the podcast. But he is earning enough from advertisements that he doesn’t have to work another job. One hour of podcasting a week comfortably supports him.
During the pandemic, he moved to Bozeman, Montana, ending his dreams of a career in stand-up comedy. He now wants to become a therapist. Thorne plans to use money from his show to pay for graduate school in behavioral health therapy.
“Especially since the pandemic, the mental toll on a lot of people inspires me to do that,” Thorne said. “I don’t think it would be healthy working for 45 minutes a week, and that’s it.”
Since late 2020, Garrett Hess has served as co-host. Thorne says they first met in Los Angeles, where Hess works as the manager at a bar. While listening to episodes of Rogan, Thorne takes extensive notes and tries to keep their on-air conversations focused.
Inspired by a drink or two, Hess frequently seems to say whatever comes to mind. The pandemic has been ruinous for the bar where Hess works, turning him into a vocal critic of lockdowns and vaccine mandates.
The controversies engulfing Spotify of late have not compelled Thorne to reconsider his support for Rogan, who has been criticized for giving his guests a platform to voice conspiracy theories, transphobic remarks and vaccine skepticism.
If anything, it has deepened Thorne’s admiration. He praised Rogan for apologizing recently after a video circulated of him using a racial slur.
“I don’t think he’s a bad guy,” Thorne said. “I don’t think his intention is to misinform or to hurt anybody.”
Over the past month, as artists and podcasters have boycotted Spotify over Rogan, the popularity of Thorne’s show has spiked even higher.
Recently, Thorne has heard from several companies interested in helping him to spruce up his production values and to come up with ideas for new podcasts. But Thorne says that to date neither Rogan nor his handlers have reached out to him. And Thorne would prefer they never do.
Amazon Places Bet On Streaming, Fast-paced Music Awards Show
Amazon has seen solid returns from its investment in streaming live sports, but its upcoming experiment with its first live music awards show is more of a gamble.
The 57th annual Academy of Country Music Awards from Las Vegas will air exclusively on Prime Video Monday night in a sped-up, concert-like format without commercials.
But as most awards show have been grappling with year-over-year declines in ratings on broadcast channels, the question remains if fans will make the switch to streaming.
Jennifer Salke, head of Amazon Studios, said other live music events they have hosted, including a Ye and Drake benefit show in December, shows their interest in a growing area of streaming content.
“You can see that it’s an area we’re investing in, and we think it helps build an exciting live opportunity for customers to be able to share a bigger cultural moment around content that they love,” said Salke.
Drawn by the ACM’s reputation for having a fun, inviting and inclusive atmosphere, the streaming service sought to connect that with its large audience of country fans that listen to Amazon Music.
For fans that want an even more music-focused experience, Prime Video will be offering a performance-only edit of the show.
“We feel pretty confident in our massive country music audience base … that we will be able to invite a lot of people in and we think they’re going to come and have a great time,” said Salke.
Hannah Avery, a client manager from Kantar Entertainment on Demand, said that live-streaming of NFL games on Amazon has lured more subscribers to the streaming platform.
“Just the NFL alone accounted for 4% of new signups, within Q4 of 2021,” said Avery.
But Avery said the type of live content matters. Paramount+ had streaming rights for the Grammys last year, but that did not come up as a motivating factor for new signups to that service, Avery said.
Measuring the success of the streaming only awards show will be based how many people tuned in and how many new subscribers joined to watch this specifically. But Avery noted that another key metric will be long-term gains for Prime Video.
“If someone is joining to watch something very specific, how do you keep them engaged after that and have them not cancel?” Avery said, who predicted that regardless of how well the ACMs do on Amazon, she expects to see growth in streaming live events.
R.A. Clark, the longtime producer of the ACM Awards, said Amazon challenged him to significantly rethink the awards show format. This year’s show, which will be shot inside Allegiant Stadium, will look like a sports event, with three stages, overhead spider cameras, non-stop action and heavy on graphics.
The awards will be handed out in segments, rather than spread between songs, with one 35-minute block of performances with no interruptions.
“It allowed us to throw out all the conventions and put them back together and rearrange it,” said Clark.
All content on Prime Video is commercial free and this award show will include a shoppable version of a red carpet pre-show with merch curated by Amazon Fashion.
“In the Amazon world, we have customers now. It’s no longer a passive viewing experience,” said Clark.
But for artists like Jimmie Allen, who is co-hosting the show along with Gabby Barrett and host Dolly Parton, streaming is the future of country music.
“It’s definitely new, especially for country music,” said Allen, who will be performing twice during the show. “As country music continues to continues to expand, we have a lot of people that listen to pop and hip hop and they are used to having things right away and they are used to not waiting.”
Allen is looking forward to the two-hour show, even if that means there’s less room for mistakes.
“The ACMs this year is kinda like how I like to gamble: You get in quick and get out quickly,” he joked.
The new streaming format means fewer distractions for fans at home, Allen said.
“The biggest thing you want to do with the show is hold the viewer’s attention and don’t give them an opportunity to turn the channel,” said Allen. “If they turn it, they might miss something.”
Obama Gets Second Act As National Parks Champion On Netflix
The five-part series “Our Great National Parks” will feature locations around the world and premieres on April 13.
Former President Barack Obama’s next act in retirement: narrating a new nature documentary series on Netflix.
— Netflix (@netflix) March 15, 2022
The five-part series “Our Great National Parks” will feature locations around the world and premieres on April 13. Obama and former First Lady Michelle Obama entered a multiyear deal with Netflix Inc. in 2018 to create a “diverse mix” of programs through their Higher Ground Productions firm.
In conjunction with the series, the Wildlife Conservation Society, Freeborne Impact and Higher Ground have launched Wild For All, an initiative to encourage people experience nature and take steps to protect it, “not only in faraway places, but in the everyday wild at our doorsteps too.”
The series is the latest expression of Obama’s interest in public land. The Obama administration put more than 550 million acres of land and water under permanent protection over the course of his presidency.
It designated more than two dozen new national monuments, including Bears Ears National Monument in Utah and the first marine national monument in the Atlantic Ocean, the Northeast Canyons and Seamounts Marine National Monument. It also banned offshore oil drilling in parts of the Arctic and Atlantic oceans.
The Obama administration also took an aggressive stance on climate change issues, directing more than $90 billion toward developing renewable energy resources, electric cars and green buildings.
Record Music Streaming Profits Highlight How NFTs Will Empower Content Creators
With the dramatically expanding creator economy, NFTs and Web3 are becoming the tools for giving artists and musicians more financial stability and control.
The music sector hit record revenues at $25.9 billion in 2021, which amounts to an 18.5% growth from 2020, according to IFPI’s “Global Music Report.”
Of these nearly $26 billion, streaming drove the bulk of the growth, with a 24.3% increase relative to 2020. These patterns constitute great news for the emerging class of NFT musicians and highlight the demand for audio and video content.
Even if the way that streaming is done changes — moving from centralized platforms, like Spotify to decentralized NFT marketplaces — streaming is here to stay.
The rise in streaming is part of a broader transformation in media and entertainment towards digital content — print media is quickly fading. Digital media began replacing print media years ago with profound effects on the sector.
Economists find that the move toward national digital media is linked with the decline in local newspapers and partially explains the focus on national topics and heightened politicization.
But, we have the opportunity to do things differently in the emerging Web3 era. We now are starting to see the emergence of individual musicians minting their own NFTs and marketing them — and keeping the bulk of the revenues, rather than cedeing them to record labels or other intermediaries.
Many commentators have already pointed out that community-building is important for successful NFT projects. Absent a centralized platform that helps disseminate content at scale, NFT artists have to rely on their own networks and personal connections to get the word out.
In many ways, that requires a different set of skills than the production of the music, namely many soft skills and some financial shrewdness — at least enough to know when to say yes versus no to an opportunity.
However, such skills are not taught in traditional music programs. Instead, they focus heavily on voice technique and music history, which are useful to varying extents, but not alone sufficient for a successful career as a musician.
That’s part of the reason record labels and centralized entities were so useful — they helped fill a lack that many musicians had through no fault of their own.
But, community-building is not just a means toward the end of selling NFTs — it’s also a highly interactive and dynamic process that feeds into an artist’s underlying art.
Unfortunately, the usual centralized model for media and entertainment not only requires musicians to part with the bulk of their potential revenues, but also their rights and governance.
They cannot even make decisions governing their own music without getting approval from their controlling entity.
While some people might still be okay with that, artists across the board loathe giving up that sort of creative autonomy and control — especially when they are not compensated well for it.
Wages for performing artists are projected to experience limited growth over the next several years, suggesting that little is going to change unless we shift from the current trajectory.
Music was never designed for centralization. Artists create experiences for others to enjoy with others. Although record companies talk about building community, the proof is in the pudding — musicians across the board struggle, and often not due to a lack of talent, but rather a lack of financial and business expertise that leads them into contracts with record labels that do not serve their interests.
Fortunately, we’re seeing an emergence of decentralized options, including most recently the announcement of MuseDAO, which aims to bring classical musicians together and spearhead local meetups and get togethers with the goal of enjoying and growing culture.
Immersive Digital Experiences
Prior coverage from Cointelegraph has already highlighted the financial benefits that music NFTs offer artists through the initial sale.
We don’t need to look too far to see the windfall that talented musicians have brought home, most notably Justin Blau, known under his performing name 3LAU, as one of the early movers through his Ultraviolet NFT drop last year.
However, what the latest numbers on streaming highlight is that there is a growing audience for music NFTs beyond just streaming — if that was all that there was, then we would expect to see steady, not exponential, growth.
Instead, we saw continued momentum as consumers look for more audio and video content to consume and enrich their lives in place of traditional print media.
NFTs have the potential to unlock an incredibly exciting and new market in the creative economy. If we think of artists — and content creators more broadly — as people who help build experiences for others, then NFTs become the vehicle to transmit and authenticate unique artistic content.
While there has been some talk of buying music-related NFTs in the Metaverse — most notably for fashion — imagine if creators came together in the Metaverse to create immersive digital experiences that combine audio, visual, and potentially other forms of content simultaneously.
The creative options are limitless, and the NFTs can be used to facilitate more than just leisure activities — such immersive experiences can also directly advance educational and training needs.
Although there are now several examples, Arizona State University, in partnership with Dreamscape Immersive, launched the Dreamscape Learn project in 2020. As Michael Crow, President of Arizona State University, said:
“We’ve always known there is huge potential to unlock new learning realms for students by merging VR — and all that it empowers educationally and socially — with advanced, adaptive educational experiences.”
The latest streaming revenues and expansion of the music sector is great news for content creators across the board.
The data show that there’s more demand than supply, so NFTs and Web3 tools are poised to help creators leverage these trends to not only become financially sustainable, but also to create even more compelling and immersive experiences in the Metaverse for society at large.
Netflix Needs To Handle Its Freeloaders Delicately
Crackdown on password sharing could boost revenue as subscriber growth slows, but alienating viewers could be costly too.
As Netflix looks to shift gears with investors, it may find the need to do something about those who are getting a free ride.
When the streaming pioneer posts first-quarter results on Tuesday, the figures may show one of its weakest periods in years in terms of paid-subscriber growth.
Netflix projected 2.5 million net additions for the quarter when it last reported results in late January, but that was before war broke out in Ukraine, which has driven Netflix and many other companies to suspend their business activities in Russia.
John Blackledge of Cowen now expects Netflix to add only about 1.5 million new subscribers in the quarter.
Wall Street in general expects user growth to be a weaker driver for Netflix going forward, in part due to the company’s huge current base of nearly 222 million paying subscribers. Hence, revenue and earnings growth will need to play a bigger role in the Netflix story.
Analysts expect revenue growth to average 12% annually over the next four years compared with a projected 8% annual average for subscriber growth, according to FactSet estimates.
Some of that will depend on the company’s ability to raise subscription prices, but Netflix may also need to address the thorny issue of those using its service without paying for it.
How big of an issue that is depends greatly on whom you ask—and when. “Password sharing is something you have to learn to live with because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids,” Netflix founder and co-chief executive Reed Hastings said in an earnings call in late 2016.
But a test program in the markets of Chile, Costa Rica and Peru announced last month indicates a possible change of heart.
Under that program, subscribers can add “sub-accounts” for up to two people they don’t live with for about $3 a month. In announcing the program, Netflix noted that accounts being shared between households is “impacting our ability to invest in great new TV and films for our members.”
Converting more viewers to payers could bring some significant financial upside. A February survey by Cowen found that 42% of respondents shared their Netflix password, though Mr. Blackledge acknowledged that some of those were likely subscribers sharing with family members in the same household.
Password sharing does multiply the number of eyeballs on Netflix programming, which could still leave a significant number of viewers drawn enough to the company’s content to pay for it if pressed.
According to eMarketer, Netflix had about 611 million global viewers who watched at least one time a month last year. That’s nearly three times the company’s actual subscriber base at the end of the year.
Still, a sharp crackdown by Netflix could bring other risks. A survey by KeyBanc Capital last month found that password sharing was greatest among the age 18-29 cohort. Many of those could simply be college students living away from home temporarily.
KeyBanc analysts also noted that this age group tends to have a lot of other viewing options, so limits by Netflix “could ultimately lead these consumers to stop watching Netflix altogether.”
In that light, the option to add people outside the household for a few bucks more is a wiser course of action than trying to make those viewers pay full price—especially since Netflix is now one of the most expensive services in a much-more crowded streaming market.
“Certainly, having your 35-year-old daughter’s boyfriend’s cousin use Netflix is not in the acceptable use cases, right?” then finance chief David Wells said at an investment conference earlier in 2016.
But the daughter’s boyfriend’s cousin can now watch “Ted Lasso” on Apple TV+ for half the price of Netflix’s cheapest plan. A lost eyeball may ultimately be more costly than one that doesn’t pay up.
Warner Bros. Discovery To Shut Down CNN+ One Month After Debut
* Executive In Charge Of Project, Andrew Morse, To Leave Company
* Customers Will Receive Partial Refunds Of Subscription Fees
Warner Bros. Discovery Inc. is shutting down the CNN+ streaming service just a few weeks after its launch, underscoring the determination of a new corporate parent to refine its strategy amid fresh questions about the growth of online video.
In a week where Netflix Inc. reported its first subscriber loss in a decade — and sent media stocks cascading — the flameout of CNN+ will add to the growing doubts about the public’s previously unquenchable hunger for streamed films and TV shows.
While CNN+ surpassed 100,000 subscribers in its first week, it had hurdles to surmount, including new leaders who have vowed to aggressively cut costs and focus on a single streaming service.
CNN came under new management earlier this month, with the merger of its parent WarnerMedia and Discovery Inc., creating Warner Bros. Discovery.
The team led by Chief Executive Officer David Zaslav has promised to find $3 billion in savings from the combination. CNN+, which spent about $500 million on its app, including marketing and talent, became an early target.
It wasn’t immediately clear how many CNN employees will lose their jobs as a result of the shutdown. There are 100 open jobs in other parts of the company.
CNN+ hired at least 450 people, according to Insider, including journalists and engineers who worked on the streaming service’s technology. Laid off employees will get nine months’ severance pay.
Andrew Morse, who led CNN+, will leave after a transition period. Alex MacCallum, general manager of the service, will run CNN’s digital operations.
The service will cease operations on April 30, according to a statement Thursday. Customers will receive prorated refunds of their subscription fees.
Zaslav has talked about making HBO Max the flagship of the new company’s effort to compete with Netflix. As a standalone app, CNN+ didn’t fit into that vision.
Another service, Discovery+, is expected to be folded into HBO Max at a later date, according to a person familiar with the matter. The company is also considering whether to rebrand HBO Max.
CNN+ offered a mix of lifestyle shows and traditional news, including a daily interview program from Chris Wallace and a food and travel series hosted by actress Eva Longoria. Its programs will move to CNN’s cable channel and website while longer-form productions will go on HBO Max.
None of the high-profile hosts who were hired for CNN+ are expected to leave the company. Wallace will likely take his show to the CNN cable channel, but the network’s leadership is still trying to decide what is the best platform for each CNN+ program.
The decision to shut down the service follows the shocking drop in subscribers reported this week by Netflix. The streaming leader lost 200,000 customers in the first quarter and expects a further decline of 2 million in the current period, sending its stock into a nosedive.
Shares of Warner Bros. Discovery fell 6.8% to $21.45 in New York, in part over continuing skepticism about the future of online TV following Netflix’s surprise subscriber decline.
Zaslav and his team are taking over Warner Bros. Discovery almost a year after AT&T Inc. agreed to merge its media operations, including CNN, with Discovery.
For much of the past year, while the deal was under regulatory review, Discovery executives were sidelined from making decisions affecting the former WarnerMedia or influencing CNN’s decision to press ahead with its streaming strategy.
The service suffered a big blow just weeks before its launch when Jeff Zucker, who had supported the creation of app, left the company and was replaced by Chris Licht, a longtime television executive.
CNN+ charged $5.99 a month. Executives described it as CNN’s most ambitious new venture since the founding of the network more than 40 years ago.
The abrupt closing of CNN+ calls to mind the demise of Quibi, a short-video upstart founded by movie mogul Jeffrey Katzenberg. Launched in 2020, Quibi shut down six months after its launch, representing one of the entertainment industry’s most dramatic flops.
At an internal town hall, Licht told staffers that while the launch had been “incredibly successful,” the service didn’t fit with the new management’s plans. “It is not your fault that you had the rug pulled out from underneath you,” he said, according to the network.
U.S. Households Are No Longer Adding More Streaming Services
* Last Week Saw Netflix Stock Routed After Loss In Subscribers
* On-Demand Services Accessed Per Household Leveled Off At 4.7
U.S. households stopped adding to their roster of streaming services, in another sign that the on-demand video market has reached saturation point.
The number of on-demand services accessed per household leveled off at 4.7, according to a quarterly survey from research company Kantar, after almost two years of constant increases alongside new service launches.
The last week saw Netflix Inc. stock routed after a shock loss in subscribers. Meanwhile CNN abruptly axed its standalone service CNN+ after just a month following the completion of the Warner Brothers Discovery Inc. merger.
“Expect to see a greater rate of churn and switching as consumers are more selective about what they watch,” the report said.
“It may be more challenging for newer entrants in the market, like CNN+, who will have a hard time justifying their value within the already saturated market.”
Analysts have been cutting their share price targets in the big streaming platforms after the warning from Netflix.
“We think catalysts for streaming remain elusive, notwithstanding some continued stabilization of Disney+ subscribers,” said Daniel Salmon, analyst at BMO Capital Markets.
Charter Communications, Comcast Form JV To Develop Streaming Platform
Charter will make an initial contribution of $900 million, funded over multiple years.
Charter Communications Inc. and Comcast Corp. have formed a 50/50 joint venture to develop a next-generation streaming platform on branded 4K streaming devices and smart TVs.
Comcast will license Flex, its aggregated streaming platform and hardware, to the joint venture, contribute the retail business for XClass TVs, and contribute Xumo, a streaming service it acquired in 2020.
Charter will make an initial contribution of $900 million, funded over multiple years.
The XClass TVs will be available through national retail partners and potentially direct from Comcast and Charter to provide more customer choice.
Xumo will continue to operate as a free global streaming service available through the joint venture’s products and third-party devices. Charter will offer the 4K streaming TV devices and voice remotes beginning in 2023.
The companies said the joint venture doesn’t involve the broadband or cable video businesses of either Comcast or Charter, which will remain independent.
The joint venture will offer app developers, streamers, retailers, operators and hardware manufacturers the opportunity to reach customers in major markets across the country with the platform, the companies said.
Disney Tops Streaming Subscriber Estimates, Tempers Outlook
* Gains For Disney+ Follow The Surprise Decline For Netflix
* Resorts Prosper As Travel, Tourism Continue To Recover
Walt Disney Co. reported subscriber gains for its flagship streaming service that exceeded analysts’ estimates, but tempered its outlook for the balance of the fiscal year and said it will trim spending on movies and TV shows.
“We’re very carefully watching” content spending, Chief Executive Officer Bob Chapek said Wednesday on a call with investors after the entertainment giant reported fiscal second-quarter results. The company lowered its projection for overall film and TV spending by $1 billion to $32 billion this year.
Shares of Burbank, California-based Disney initially rose after the company reported better-than-expected growth at its flagship Disney+ streaming service.
The service finished the quarter with 137.7 million subscribers globally, up 33% from a year ago, the company said. Although the gain was smaller than the growth the service saw in the prior three months, it was higher than Wall Street estimates of 134.4 million.
But the stock reversed after management said growth in the second half of the year may not be as fast as previously expected. The stock was down 32% this year through the market’s close on Wednesday, making it one of the biggest losers in the Dow Jones industrial average. It was down 2.7% to $102.40 at 11:53 a.m. Thursday in New York.
Investors were expecting slower growth after Netflix Inc. shocked Wall Street by reporting a surprise drop in subscribers and forecasting an even steeper loss in the current quarter.
That led the company, the streaming industry leader, to tear up its playbook and announce plans for a lower-priced version of the service that includes advertising.
Disney’s other streaming services, Hulu and ESPN+, posted total subscribers of 45.6 million and 22.3 million respectively.
The gain in streaming coincided with a complicated quarter for the company. Disney’s earnings rose to $1.08 a share, but missed the $1.17 average estimate of analysts due in part to sharply higher taxes paid in international markets.
Sales in the period ended April 2 jumped to $19.2 billion, but trailed the $20.1 billion forecast on Wall Street after the company lost $1 billion in licensing revenue as it focuses on its own streaming business.
Theme parks were strong as expected. Earnings at the company’s resort division increased to $1.76 billion from a loss last year as guests returned in force to its hotels and theme parks.
Among the new attractions opening in the quarter were the Star Wars Galactic Starcruiser, an all-inclusive hotel with Star Wars characters that costs $4,800 for a two-night stay for two guests.
But the company also cautioned that park closures in Shanghai and Hong Kong could crimp operating income in the current quarter by as much as $350 million.
In February, Chapek warned of a challenging first half but predicted streaming subscriber growth would accelerate in the second half of the year, when new film and TV projects are ready and new markets are added. Streaming video is a key growth area for Disney, which like other media companies is seeing a dwindling audience for traditional TV.
Executives on the call said the company plans to introduce Disney+ in 53 new markets by the end of the current quarter, but some places, like Poland, are seeing disruption due the war in Ukraine.
Profit in the company’s traditional TV division fell 1% to $2.82 billion as higher sports programming costs offset advertising gains.
The loss at the company’s direct-to-consumer unit more than doubled to $887 million, due to higher investments in film and TV content, partly offset by higher advertising and subscriber revenue.
‘Squid Game’ Stock Jumps After Netflix Announces Second Season
* Shares Of South Korea’s Bucket Studio Jump Nearly 24% Monday
* Netflix Seeks To Recover From Unexpected Slump In Subscribers
Netflix Inc.’s “Squid Game” will return for a second season, with the online streaming company returning to its global hit to recover from an unexpected drop in subscribers.
“Join us once more for a whole new round,” Hwang Dong-hyuk, the drama’s director, writer and executive producer, said in a letter posted on Netflix’s website. Gi-hun returns he said, referring to the main character. And audiences will be introduced to Cheol-su, the “boyfriend” of the show’s large animatronic doll Young-hee.
Bucket Studio Co., which holds a stake in the agency representing Squid Game’s lead actor, jumped nearly 24% in Seoul on Monday amid a broader selloff in Asian stocks.
“Squid Game,” in which a group of indebted people compete in deadly versions of childhood games to win money as super-rich VIPs watch, was Netflix’s biggest launch ever. The series boosted the popularity of Korean content worldwide and prompting global players including Walt Disney Co., Apple Inc. and Warner Media to invest in local-language titles and original series to lure subscribers.
Netflix is betting that a second season may help stymie this year’s 70% slump in shares after announcing in April that it had lost 200,000 subscribers in the first quarter, the first time it has shed customers since 2011. The company projected it will shrink by another 2 million customers in the second quarter.6-12
Free Streaming Services Attract More Viewers—And Advertisers
Ad-supported platforms from Roku and deep-pocketed parents including Fox, Paramount and Amazon are moving beyond bargain-basement programming.
Advertisers are increasingly turning to once-obscure streaming platforms with quirky names to reach people who aren’t paying for cable TV or subscribing to streaming services.
Advertising-supported video-on-demand platforms—a group that includes free apps like Tubi, Pluto TV, Freevee and Xumo, as well as the ad-supported versions of subscription services like Hulu and HBO Max—are expected to generate nearly $19 billion in revenue this year, more than doubling their 2020 haul, according to Insider Intelligence projections.
The growth of free-to-use services, which were once derided as the second-class citizens of streaming, comes as industry giant Netflix Inc. is struggling to keep expanding its subscriber base amid growing competition from streaming rivals, while the traditional cable-TV bundle is losing millions of customers every year.
“People are creating their own bundles right now, and they are only willing to pay for a certain number of apps,” Pluto TV CEO Tom Ryan says. “We want to complement those paid apps.”
Dustin Herendeen, 35 years old, from Fort Wayne, Ind., says he used to get most of his entertainment from Netflix but started looking for other options when the service shifted its focus toward original shows and raised its price.
A self-described movie buff, Mr. Herendeen says he now mostly watches Tubi for its obscure and nostalgic 1980s movies.
“The tailwind is behind AVOD,” says Tubi Chief Executive Farhad Massoudi, referring to the industry’s acronym for advertising-supported video-on-demand platforms.
Mr. Herendeen says he also occasionally turns to Pluto TV for Totally Turtles, a channel dedicated to Nickelodeon’s “Teenage Mutant Ninja Turtles.” Like Pluto TV, Nickelodeon is owned by Paramount Global.
Pluto TV is expected to bring in $1.24 billion in advertising revenue this year, according to Insider Intelligence, significantly more than the $340 million Paramount—which was then known as Viacom—agreed to pay for it just three years ago.
That is also true for Tubi, which Fox Corp. acquired in 2020 at an estimated valuation of $490 million and is expected to generate $830 million this year.
Other major media companies have raced to get in the game. Amazon.com Inc. in 2019 launched its own ad-supported streamer, IMDb TV, which it recently renamed Freevee, while Comcast Corp. bought Xumo in 2020.
Flush with advertising cash and backed by deep-pocketed corporate giants, these services are starting to venture beyond the bargain-basement programming that got them started.
For the longest time, most free ad-supported streamers didn’t pay upfront for the content they offered—mostly old movies and TV shows—opting instead to give the program supplier a cut of their ad revenue.
Lately, they have transitioned to traditional licensing deals, studio and streaming executives say, which makes it easier for them to acquire higher-profile and more recent programming.
Roku Inc., the largest maker of streaming devices in the U.S., recently struck a deal with Lions Gate Entertainment Corp. to offer movies such as the “John Wick” franchise and “Expendables 4” on the Roku Channel, its free ad-supported streaming service.
Jim Packer, president of world-wide TV and digital distribution for Lions Gate, says that a few years ago, it would have been hard to imagine a free ad-supported streamer having the financial wherewithal to make such a deal.
“They have transitioned very quickly,” he says.
These services are even starting to offer original content—long the remit of subscription platforms and traditional TV channels.
“We now are at the scale to invest in some originals,” says Rob Holmes, Roku’s vice president of programming. With its streaming devices in more than 60 million homes in the U.S., the company estimates that the Roku Channel has a reach topping 80 million people.
Roku’s original-content lineup includes “Weird: The Al Yankovic Story,” a movie not yet released featuring “Harry Potter” star Daniel Radcliffe as the musical satirist. Roku also has breathed new life into “Die Hart,” a Kevin Hart show that it acquired from the now-defunct Quibi.
Greg Garcia, the creator of the NBC hit “My Name is Earl,” is making a new comedy about a group of do-gooder ex-cons called “Sprung” for Freevee. He says the fact that Freevee is owned by Amazon was a big selling point for him.
“I know they are going to put the weight of Amazon behind it to promote it,” Mr. Garcia says.
Lauren Anderson, co-head of content and programming for Freevee, notes that while advertising-supported video-on-demand platforms are similar to broadcast television in the way they rely primarily on ad revenue, the former “allow creators to create freely, away from arbitrary creative restrictions.”
Tubi last year launched “The Freak Brothers,” an animated series starring Pete Davidson, while Crackle Plus, a free ad-supported streamer owned by Chicken Soup for the Soul Entertainment Inc., in late 2019 released “Going From Broke,” a reality show following young people trying to get out of debt that is executive-produced by Ashton Kutcher.
Chicken Soup for the Soul Entertainment CEO Bill Rouhana says that the service made a big push into original content the past few years, and that programming is what advertisers most often want to be associated with.
“Over 25% of our ad impressions are coming from original and exclusive content,” he says.
Industry analysts say the rise of free ad-supported streamers is partly due to the growing use of connected televisions, on which apps like Tubi and Pluto TV are often preloaded.
This year in the U.S., 87% of households use at least one internet-connected TV device, up from 80% in 2020 and 38% in 2012, according to Leichtman Research Group.
The growing use of internet-connected TVs is creating some headaches for advertisers. Fraud in internet-connected TV is surging, according to ad measurement and verification firm DoubleVerify Inc.
Another problem: Many commercials on ad-supported streaming services continue to play after viewers turn off their television due to a lack of communication between the TV and external streaming device, according to a recent study by WPP PLC’s ad-buying giant GroupM and ad-measurement firm iSpot.tv Inc.
The industry is working on solutions to this glitch, which is expected to cost more than $1 billion in wasted ad dollars this year
The popularity of free ad-supported platforms also comes as the largest pay-TV providers in the U.S., a category which represents about 93% of the market, lost nearly two million subscribers in the first quarter of 2022, similar to losses in the same period for the past two years, according to Leichtman.
Wells Fargo analyst Steven Cahall says the decline in traditional TV viewing has created challenges for marketers. “Advertisers have lost access to some of the audience, and it is most pronounced in the younger demographics,” he says.
Pluto TV says it has plenty of content catering to younger audiences, including MTV reality shows or Comedy Central’s “South Park.” Crackle says 64% of its 40 million-plus monthly active users are between the ages of 18 and 44.
Free ad-supported platforms are also becoming a growing destination for independent filmmakers, who have to deal with the shrinking number of movie theaters willing to carry smaller films and with subscription streaming services’ growing focus on bigger-budget projects.
“The more platforms we have, the more opportunity we have to get our content made in a nontraditional way,” says Michael Olmos, a director who is making “Murder City,” a crime drama set in Detroit, for Tubi.
Sometimes, talent needs to be given a crash course on these platforms before coming aboard.
“Not everyone is aware of Tubi or Pluto,” says Jillian Apfelbaum, executive vice president of content for the production company Village Roadshow, which is making movies for Tubi.
Her pitch is simple: She says she tells producers that making content for Tubi could be the opportunity to become the “Breaking Bad” or “House of Cards” of a new platform.
NBCUniversal, Google Compete to Help Netflix Develop Ad-Backed Tier
Deals with the streaming company could include exclusive agreements and revenue-sharing.
Comcast Corp.’s NBCUniversal and Alphabet Inc.’s Google have emerged as top contenders to work with Netflix Inc. and help the streaming company create an advertising-supported tier of its service, according to people familiar with the matter.
Netflix, which is hoping to boost revenue by selling ads around its programming, is still in the early stages of developing the strategy and has explored a range of tie-ups in recent weeks.
A partnership with NBCUniversal would likely be exclusive, the people familiar with the matter said. Comcast’s video ad unit, FreeWheel, would supply technology to help serve up ads, while NBCUniversal’s ad-sales team would help sell ads in the U.S. and Europe, the people said.
A partnership with NBCUniversal would likely involve revenue-sharing, and one issue might be whether Netflix would be guaranteed a certain amount of revenue, they said.
Linda Yaccarino, chairman of global advertising and partnerships for NBCUniversal, would be a major player in such a partnership.
Google brings to the table its own ad-serving technology and experience in video through YouTube and its online channel bundle, YouTube TV, people close to the discussions said. Google already has a commercial relationship with Netflix, which is a customer of its ad-buying tools, they said. It is likely Google would also pursue an exclusive arrangement.
“We are still in the early days of deciding how to launch a lower-priced, ad-supported option and no decisions have been made,” a Netflix representative said.
Roku Inc. has also had early talks with Netflix about ad partnerships, the people familiar with the matter said. The Information previously reported that Netflix talked to Comcast and Roku about getting help on technical infrastructure or ad sales.
In April, when Netflix announced its first quarterly subscriber loss in more than a decade, the company said it would move toward putting ads into its service, something co-Chief Executive Reed Hastings had long resisted.
The shift in strategy was a sign that competition from rival streaming services, and the end of a pandemic-fueled surge in growth, was weighing on Netflix and forcing it to rethink its approach. An ad-supported tier would be more affordable and could help boost revenue and subscriptions.
Forming partnerships with big competitors such as Google or NBCUniversal, and outsourcing technical infrastructure and ad sales, could help Netflix move faster to bring an ad-supported version of its service to market.
Several ad-industry executives estimated that it would take at least a year for Netflix to roll out ads across the service globally, though others said Netflix could begin testing ads in some markets much sooner.
The major competitors Netflix is considering each have experience in supporting other companies’ ad-sales efforts.
NBCUniversal has been the exclusive reseller of ads for Apple News and Apple Stocks in the U.S. since 2017, and recently said it expanded its relationship to include the U.K. NBCUniversal would give Netflix open access to its ad-tech partners, one of the people familiar with the matter said.
Google began helping Walt Disney Co., which had been a FreeWheel customer, serve ads across video, smartphones and desktops in late 2018.
Netflix also is exploring potential tie-ups with ad-tech companies that could funnel demand from advertisers for automated placements in the streaming service, the people familiar with the matter said.
The Trade Desk is one ad-tech firm that has discussed a partnership with Netflix in this realm, they said. DoubleVerify, a firm that helps advertisers measure how campaigns performed, also has talked to Netflix, a person familiar with the situation said.
Ad-industry executives who have had discussions with Netflix say the company hasn’t provided details of its plans, such as how many ads the company will run for each hour of programming and whether the company aims to offer targeted, personalized ads or mainly focus on the potential for advertisers to reach its user base of 222 million paying subscribers.
Netflix To Stream Johnny Depp’s Return To Film In France
* Period Picture ‘La Favorite’ Will Begin Shooting This Summer
* It Will Be Depp’s First Movie Role Since His Defamation Trial
Netflix Inc. has acquired the rights to stream Johnny Depp’s next film in France, a deal that will help fund the actor’s first feature role following his defamation trial against ex-wife Amber Heard, and what he claimed was a wider boycott by Hollywood studios.
The entertainment giant has licensed the rights to stream the film in the country 15 months after its release in theaters, according to people familiar with the matter who asked not to be identified because the terms haven’t been announced publicly. The company does not have the rights for the film outside of France.
Depp will portray King Louis XV, in the period piece, “La Favorite.” Directed by Maiwenn Le Besco, the film is expected to be released in 2023 in French theaters.
The acquisition of the film’s rights will be used by the producers to help finance the production. Netflix won’t otherwise be involved in the making of the picture.
“La Favorite” will be Depp’s first cinema role since Hollywood turned its back on the actor after his ex-wife made domestic violence accusations against him.
The actor won $10 million in compensatory damages in a defamation suit against Heard in June. The same jury awarded $2 million to Heard, who made similar claims. She has said she would appeal.
Depp was last featured in a film in 2020, and this will be his first time acting in French. It’s set to be shot this summer over three months on locations including the Versailles castle, according to the Figaro newspaper.
Following a recent agreement with French cinema guilds, Netflix and other streaming platforms are expected to spend a share of their revenue on local films. Netflix said it would invest a total of 40 million euros ($40.7 million) on French movies in 2022, with the Depp film being one of its first picks.
Le Besco will play Madame du Barry, the famous mistress of Louis XV. She has directed critically acclaimed films such as “Polisse” and “Mon Roi.”
Other upcoming French films selected by Netflix include the comedy “Asterix & Obelix: l’Empire du Milieu,” directed by Guillaume Canet, and “Chien et chat,” directed by actress and director Reem Kherici, according to the company.
Hulu Is Driving More Streaming Subscribers To Disney Than Marvel Or Star Wars
New subscriptions to Hulu have outpaced those of the company’s flagship streaming platform in 18 of the past 24 months.
Hulu has emerged as Walt Disney Co.’s fastest-growing U.S. streaming service, just as the company loads up on more adult-focused entertainment in a bid to expand its reach to a wider variety of viewers.
New subscriptions to Hulu have outpaced those of Disney’s flagship streaming platform, Disney+, in 18 of the past 24 months, and total new subscriptions to Hulu have exceeded those to Disney+ in each of the last six quarters, according to data from subscriber-measurement firm Antenna.
Hulu’s subscriber gains come as Disney leadership is under pressure from investors to keep up the momentum in Disney+ subscriber growth.
Disney Chief Executive Bob Chapek has set a target of signing up between 230 million and 260 million Disney+ subscribers and achieving profitability for the streaming business by September 2024, a goal described as unrealistic by some shareholders.
Some analysts and investors have described streaming as a drag on Disney’s share price, which has fallen by nearly 40% this year amid a broader pullback in media stocks.
Disney+ has 137.7 million global subscribers as of the most recent quarter’s end. Hulu’s streaming-only service has 41.4 million subscribers, while Hulu Live, Disney’s $70-a-month live-TV streaming product, has 4.1 million.
The streaming segment overall lost $887 million in the most recent quarter, and its losses have totaled more than $6 billion since the launch of Disney+.
On Friday, Disney said that beginning in late August, the monthly subscription cost for ESPN+ would rise from $6.99 to $9.99, or from $69.99 annually to $99.99. A Disney spokesman said the price hike reflects the higher value and scope of the service, which has benefited from Disney’s increased investment in sports rights.
Disney anticipates that the ESPN+ price increase will make the Disney bundle—which ranges in cost from $14 to $20 a month, depending on whether ads are shown—more attractive, according to a person familiar with the matter.
The Antenna data, prepared exclusively for The Wall Street Journal, indicate that after Disney+ exploded out of the gate following its November 2019 launch, gaining nearly 100 million subscribers in its first five quarters of operation, its growth has leveled off as the service has locked in its core fan base.
Subscribers to the stand-alone Hulu service are less loyal than Disney+ subscribers, the data show, and more likely to cancel their subscriptions than those who subscribe to Disney’s streaming bundle, which includes both services and the sports-focused ESPN+.
In June, the latest month for which data was available, 4.7% of Hulu subscribers canceled their subscriptions, compared with just 2.5% of bundle subscribers and 3.83% of Disney+ subscribers, Antenna found.
“They did a great job of teeing up those hard-core Disney fans,” said Jonathan Carson, Antenna’s chief executive. “But there’s a broader and longer-term upside for Hulu, because it has general market appeal, while Disney+ has a much more specialized fan base.”
A Disney spokeswoman said the trends shown in the Antenna data are broadly accurate. Despite Hulu’s accelerated growth, Disney+ is still seeing strong subscriber growth, she said.
Antenna analyzed data from spending apps and inbox-management software for about 5 million American consumers to glean trends around streaming video consumption.
Disney+ is home to Disney’s core franchises, including Marvel Studios superhero films and series, Star Wars epics, children’s animated fare, as well as nature films from National Geographic and former 21st Century Fox titles such as “The Simpsons” and “Avatar.”
Hulu, by contrast, airs more adult-oriented shows such as this year’s corporate-scandal drama “The Dropout” and “Pam & Tommy,” a series about the release of the sex tape that actress Pamela Anderson made with heavy metal drummer Tommy Lee. In the company’s most recent earnings call, Mr. Chapek, the CEO, highlighted the appeal of both shows, plus the reality series “The Kardashians” and “Dancing With the Stars.”
Disney said in its most recent quarterly earnings call that it plans to spend $32 billion producing content this year, about one-third of which will be spent on sports rights, while a “meaningful amount” will be dedicated to general entertainment content.
“It’s obviously a balancing act, but we believe that great content is going to drive our subs, and those subs then in scale will drive our profitability,” Mr. Chapek said on the May earnings call. Mr. Chapek noted that nearly 50% of Disney+ subscribers are childless, underlining the need to produce shows and films that appeal to adults across all of the company’s platforms.
Mr. Chapek faces a tough decision over the next year and a half, including whether or not Disney should buy out the 33% stake in Hulu owned by Comcast Corp.’s NBCUniversal. Hulu’s rapid growth makes the decision even harder.
Disney acquired a controlling stake in Hulu as part of its $72 billion purchase of most of 21st Century Fox’s entertainment assets in 2019.
At the time, then-CEO Robert Iger struck a deal with Comcast that gives Disney the right, starting in January 2024, to buy out NBCUniversal’s stake in Hulu at fair market value, with a floor price of $27.5 billion.
But Hulu’s subscriber growth and Disney’s investments in the platform have made Hulu more valuable, likely raising the potential cost to buy out NBC’s stake, said Morgan Stanley analyst Benjamin Swinburne, although streaming businesses such as Netflix Inc. have lost value in recent months as investors question the viability of the streaming business model.
Owning 100% of Hulu would allow Disney to “truly integrate” the service into its suite of streaming offerings by making it a tile on the Disney+ app, rather than available only as its own stand-alone app, which would help reduce subscriber churn, Mr. Swinburne said.
While stand-alone Hulu subscriptions have risen as a proportion of total Disney streaming subscriptions, the Antenna data show, the share represented by Disney+ and Disney bundle sign-ups has fallen.
The bundle represented 8% of gross subscriber additions in June, down from its peak of 15% in September 2021; stand-alone Disney+ subscriptions represented 34% of new sign-ups in June, down from a monthly peak of 56% in July 2020.
Some recent decisions by the company have allowed Disney to book more Disney+ subscribers using its other streaming platforms as a gateway. Late last year, for example, Disney rolled roughly 2 million Hulu Live subscribers into its streaming bundle as part of a price increase.
Disney reported these converted subscriptions as new Disney+ customers in its first-quarter financial results this year, even though none of them had signed up for Disney+ of their own accord.
Some of these Hulu Live subscribers who gained Disney+ subscriptions, like Kevin Shimkus, a retired accountant from Pinehurst, N.C., who watches the nightly news and home-and-gardening reality shows with his wife, have no interest in Pixar animated movies, Star Wars content, or other Disney+ offerings.
Mr. Shimkus, who represents the kind of general-entertainment viewer that Mr. Chapek has said he is eager to win over, canceled his subscription and opted for the lower-priced YouTube TV instead.
“I would never pay for a Disney+ subscription,” he says. “I just don’t see the value.”
Netflix Tests Another Way To Charge For Password Sharing
* Customers In Five Countries Must Pay For Additional Homes
* Netflix Says 100 Million Households Use Shared Passwords
Netflix Inc. will ask customers in five Latin America countries to pay a fee if they want to use their account in an additional home, a test the company hopes will generate additional revenue by getting customers to pay to share their Netflix account.
Customers in Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic will be asked to pay an extra fee if they use an account for more than two weeks outside of their primary residence, the company said Monday.
This won’t affect the use of Netflix on mobile devices such as smartphones, tablets or laptops, nor will it affect people on vacation. The additional home will cost 219 pesos ($1.70) in Argentina and $2.99 in the other countries.
Netflix has said that more than 100 million households are using accounts paid for by other people, and blamed password sharing as one of the primary reasons for its flagging subscriber growth.
The company lost 200,000 customers in the first quarter, and forecast it would lose 2 million more in the second. Its share price has dropped more than 65% this year as investors fret that the streaming business is in trouble.
“Today’s widespread account sharing between households undermines our long term ability to invest in and improve our service,” Chengyi Long, a director of production innovation, said in a blog post.
Password sharing has been particularly high in Latin America, where Netflix is conducting its first two tests to see if people will pay for access. The company is trying to limit sharing without punishing people who already pay for Netflix or alienating viewers.
The effort has been portrayed at times as a crackdown, which has caused some customers to worry they will lose access to their account.
The company is testing ways to charge extra if people want to use the same Netflix account. In its first effort, the company has asked customers in Chile, Costa Rica and Peru to pay to an additional fee to add a member to an account.
That new member sets up a sub-account with their own email address, gets their own stream and can use Netflix at the same time as the primary account holder within the limits of their plan.
A basic plan allows customers to watch on one device at a time. The pricier standard plan allows for two separate devices, and the premium plan allows four.
This latest test is targeted at customers who are using the same account in multiple households. If they use an account somewhere other than one of their paying households for more than two weeks, they will receive an in-app notification asking them to either add a household or change their primary household to the new location.
Customers can manage their homes, adding or deleting them as they choose. Adding households doesn’t increase the number of people who can watch Netflix at the same time.
Netflix Locked Out Advertisers For Years, But Now Brands Have Big Plans
Hyundai, Peloton hope to have their products featured in Netflix shows.
Netflix Inc. hasn’t said much about the advertising-supported service it is developing. But advertisers are already plotting how to take advantage of it.
Peloton Interactive Inc. hopes the streaming giant, which is known for its sophisticated show-recommendation engine, will offer precision targeting so it can reach the audience most likely to buy fitness equipment.
Hyundai Motor Co. wants to have its cars appear in some Netflix shows, while other marketers are mostly looking for the chance to reach younger viewers who have abandoned traditional television.
Netflix on Tuesday reported its second consecutive quarter of subscriber losses, and said it expects a less expensive, ad-supported version of the service to be available in early 2023. The company hopes that will help boost subscriber growth and revenue.
For years, advertisers were locked out of most of the biggest streaming services, where consumers were increasingly migrating as interest in traditional TV eroded. That is beginning to change: Warner Bros.
Discovery Inc.’s HBO Max is now offering a plan with commercials and Walt Disney Co.’s Disney+ is moving to do the same.
With about 220 million subscribers globally, Netflix is the biggest prize for advertisers, though it remains to be seen how many people will opt for the lower priced ad-supported tier once it becomes available.
The company is also seeking to amend its programming deals with major entertainment studios to allow it to run content on the ad-supported tier, The Wall Street Journal reported last week.
“It’s a place we couldn’t be before,” said Angela Zepeda, chief marketing officer of Hyundai Motor America. “And we want to be there.”
Netflix last week said Microsoft Corp. would supply technology to facilitate the placement of video ads, but many advertisers are eager to see the degree of granularity with which they might be able to target specific viewers.
“They give me exactly what I want when I don’t know what I want to watch,” said Shiv Singh, chief marketing officer of online-lending platform LendingTree Inc., of Netflix’s show-recommendation engine. He said he sees big potential if the streaming service is able to do the same with ads.
“One of the things Netflix does really well is personalizing,” said Dara Treseder, Peloton’s chief marketing officer.
Several advertisers have expressed interest in locking in multimillion-dollar long-term deals with Netflix, according to a major ad buyer—a practice championed by Quibi, Hollywood mogul Jeffrey Katzenberg’s now-defunct streaming service, which had signed ad deals valued at $150 million with blue-chip marketers in the run-up to its 2020 launch.
Marcel Marcondes, Anheuser-Busch InBev SA’s global chief marketing officer, said he wants Netflix to reinvent advertising and do something that doesn’t feel like typical commercials.
During the Cannes Lions conference last month, Co-Chief Executive Ted Sarandos said Netflix planned to insert ads in a way that would be “more integrated and less interruptive” than traditional TV advertising.
“If they go straight to the traditional model, it’s going to be the biggest failure ever,” Mr. Marcondes said.
Peloton’s Ms. Treseder said she wants Netflix to partner directly with brands in a bigger way on deals that can include featuring specific items in its shows—on top of letting marketers run ads for their products.
“That is what is going to make marketers contribute a significant portion of their budget, because you are going to get much deeper [return on investment] and cultural relevance,” she said.
Hyundai’s Ms. Zepeda said the car maker works closely with media companies such as Disney to develop ad partnerships that go far beyond just buying ad time and space across various networks and websites.
She said she often looks for deals that include the ability to work with actors and or showrunners to create ads that tie into specific programs or arrange to have the company’s vehicles appear or mentioned during shows.
Earlier this year, the company had the Ioniq 5, an electric sport-utility vehicle, integrated into “Black-ish,” a show that ran on Disney’s ABC broadcast network. During the episode, Anthony Anderson, who plays an advertising executive on the show, worked on a faux Super Bowl commercial about the SUV.
Ad executives say that advertising is even more effective when viewers see a product within a show and then see a commercial for that very product shortly afterward.
Studies have shown that when a product plug aired in the same program as standard commercials for the same brand, the ability for a consumer to remember the brand increased significantly.
Even though Netflix has been ad-free since its inception, some brands have had their products or names incorporated into popular Netflix programs, though the company generally doesn’t do paid product placement, a person familiar with the practice said.
In 2019, Coca-Cola Co. did a cross-promotion with “Stranger Things” that included having New Coke, one of the beverage giant’s biggest failures, appear in several episodes of the popular show, which, like the New Coke launch, takes place in the 1980s.
As part of that effort, cans of regular Coke and Coke Zero Sugar carried the “Stranger Things” logo. Coke paid a licensing fee to sell the cans and bottles that carried the show’s logo but didn’t pay to have New Coke appear in the show.
While product placement has been a part of the TV business since the early days of the medium, the practice exploded years ago as marketers saw it as a way to sidestep commercial-skipping devices.
Amazon.com Inc. announced a beta program for a new ad format earlier this year that uses technology to virtually insert brands or products into TV shows or movie scenes after they have been filmed or produced. Comcast Corp.’s NBCUniversal also said recently that it would begin to offer advertisers a similar ad product for its streaming service Peacock.
Decentralized Music Streaming Service Audius Shifts Balance of Power, Says Bank of America
Audius moves “power, profits, control and governance from record labels and centralized [platforms] to artists and fans,” the report says.
Audius’ decentralized music streaming platform provides artists with greater profits and increased control, Bank of America (BAC) said in a research report Thursday.
Audius launched its mainnet in October 2020 with the aim of shifting the “balance of power and profits from intermediaries, such as record labels and centralized DSPs [digital service providers], to artists and platform users,” the report says.
The platform plans to distribute 90% of revenues to artists and 10% to node operators by removing intermediaries, resulting in a “decentralized DSP that shifts power, profits, control and governance from record labels and centralized DSPs to artists and fans,” the note says.
The streaming service said last week that it was offering a new feature for creators to monetize their content by allowing listeners to send tips to artists via its governance token AUDIO.
Bank of America said the music industry is ripe for disruption. Still, Audius’ adoption trends and limited music offering relative to larger DSP’s are likely to limit “short-term disruption risk,” however, disruption over the longer term is still possible.
Competition is an issue, as leading DSPs have built “economic moats” around their businesses by offering large music offerings through record labels and by leveraging personal data to improve the user experience, the note says.
Smaller DSPs, such as Audius, are faced with a “Catch-22 scenario,” as user adoption is needed to push artists onto their platform, but it also needs artists to join to drive user adoption, it added.
The bank notes that while Audius’ platform has attracted mainstream artists, including deadmau5, Diplo, Skrillex and Weezer, its usage growth has slowed since December 2021.
There are also potential legal risks related to Audius’ inability to remove music that infringes on copyright that should not be ignored, the note added.
The platform said Saturday that it was aware of reports of an unauthorized transfer of AUDIO tokens from the community treasury after it was the victim of a hack.