INDUSTRY
NBC Universal: Streaming Has Yet To “Peak”
NBC Universal: Streaming Has Yet To “Peak”
In today’s day and age, the use of streaming platforms have become increasingly prevalent. The ease of access with which you can watch tv shows and movies is unprecedented, and the extent of which would be impossible to imagine 60 years ago. Having access to new movies and shows literally at your fingertips means more and more people are able to watch just about whatever they want, whenever they want, of course assuming you have good reception and a decent cell phone.
The idea of not having to set a timer to record your favorite show, and not only being able to watch it whenever and wherever you want, but also being able to pick which episode, fast forward, rewind, pause, and change to something completely different if you want hits home. Parents with a fussy child can pull up the “Baby Shark” video or play Frozen in a pinch. Not to mention it makes waiting at the DMV so much easier when you can watch the football game you’re missing to be a responsible adult. The uses are endless.
Streaming has become so popular one begins to wonder how long standard linear television will last for. NBCUniversal CEO Jeff Shell commented on the fact that even though there is an overall decline of general consumers who watch linear television, NBC is doing just fine. In a time when the amount of viewers on streaming platforms are increasing, and the viewership of cable tv shows among others are declining, NBCUniversal CEO Jeff Shell remarked on how well their streaming platform Peacock is doing, an ad-supported streaming platform that allows you to watch movies and shows was doing, and even went so far as to state that he believes that streaming hasn’t even reached “peak content” yet.
For a point of reference, in 2022’s third quarter Comcast saw significant losses, in excess of over 560,000 combined business and residential customers, whereas NBCUniversals streaming service Peacock saw an increase of clientele. So even in spite of the fact that linear cable is continuing its downward course, Peacock is growing and has reached over 15 million paying customers, and double that in active accounts.
Making content and selling it to another distributor is what helps viewers to engage more and more frequently, and has been a strategy that NBCUniversal has been implementing. Working with other companies helps NBCUniversal to maintain and gain viewers, engaging in a symbiotic relationship with other companies which increases revenue for both. For instance NBC owns the tv series “Hacks” and they made the decision to sell it to HBO because they felt it didn’t fit their platform Peacock, and now it is available to stream on HBO Max where it’s been incredibly successful.
Shell stated in an interview that “We clearly picked the right business model for Peacock,” which has a business model that revolves around advertisements making it accessible to more people and therefore more lucrative over time. Netflix who has maintained an ad-free environment has even decided to follow suit and have a cheaper tier that involves ads making the streaming service more available to more people in the market, and they plan to have this service available by the end of this year. Even though the influx of content pertaining to sports and new original content declined for peacock in their second quarter, they retained most of their 4 million audience members that they gained during the Winter Olympics and the Super Bowl.
NBCUniversal’s bread and butter is sports and they have now made watching NFL games much easier for their customers by offering simulcast games on Peacock. To top things off, NBC also has exclusive rights to broadcast the Olympics through 2032 making it a safe bet that things are going to continue to go well for the streaming platform. As of now, Peacock has yet to go international, however, even so, its new drama Bel-Air is the most watched original series on Peacock. The lead actor Jabari Banks takes up the mantle previously held by Will Smith in the classic and beloved sitcom Fresh Prince of Bel-Air, and was heavily advertised by NBCUniversal during the Super Bowl.
Movies and theatrical releases have even begun to be more profitable due to the increase of viewing platforms people have access to. The theatrical window is still a good size, then the movies are being made available to stream on their corresponding platforms. Blockbusters like that of Disney’s “Dr. Strange in the Multiverse of Madness” after its 47 day theatrical restriction is able to be streamed on Disney+. “Top Gun: Maverick” had a similar window of 45 days in theaters before it was released to Paramounts streaming platform. Due to the booming movie industry and the very calculated licensing business therein the whole entertainment industry is seeing an unprecedented renaissance. As Shell notes, “movies drive (streaming) platforms” explaining that the more people have access to newer releases the more lucrative they become.
There are still many people who do watch linear television, however as the number of shows and movies are being made and released by streaming platforms as exclusive content, in order to keep up with the pop culture one has little choice but to hop on the bandwagon. Netflix has so much exclusive content it makes your head spin. They are cranking out so many new movies and tv shows it’s nearly impossible to keep up. That combined with other platforms like Hulu, Disney, Peacock, Paramount, the idea of paying a little less, and enduring ads, doesn’t seem so bad to watch the newest installment of a Marvel series.
Times are changing, and with it, how people watch videos and television are changing. Viewers are all slowly making the switch to streaming platforms for their news, sports, T.V. shows, and movies and that is putting pressure on traditional cable providers to offer a streaming platform of their own. Due to NBCUniversals business model they have been able to maintain their linear television audiences with minimal losses, and have even been able to succeed where others may not have. Their streaming platform Peacock is slowly but steadily becoming increasingly popular and may be the general direction where NBC is heading in the future.
About Vedette Finance
Tarek Anthony Jabre is the CEO and Founder of Vedette Finance. The company’s overall objective is to continue expanding its premium value slate, by developing, and producing, a diverse range of film projects. For more information, visit www.VedetteFinance.com
The History and Success of Amazon
The History and Success of Amazon
Oftentimes, people in the entertainment industry wonder what Amazon’s strategy really is. Amazon has been in the streaming industry for almost as long as Netflix has been, and the problem with this is that Amazon has far less to show for it in terms of being a streaming service (for now). Why? Well, for starters – in an average week, Amazon has maybe one or two of the most popular original series shows streaming in the U.S., while Netflix has about seven or eight of the most popular original series shows in any given week. Not to mention that the most popular original movies that Amazon has showcased on their streaming platform were bought from other studios.
With that being said, Amazon Prime Video has certainly struggled with defining exactly what it is. However, the issue definitely does not stem from a budgeting problem. In fact, Netflix has spent significantly more than Amazon has over the past 10 years, producing a much higher volume of shows. Amazon Studios has a budget of $10 billion, and that same budget is strikingly similar to what Netflix and many other streaming companies are spending.
And even though Amazon has not produced the same volume of shows as Netflix and others, it is certainly not under par. This is because Amazon has taken a vastly different approach compared to other major companies in the entertainment industry. How is this so? Well, Amazon doesn’t fund TV shows with the sole purpose of making money from them – and definitely not on a standalone basis. Instead, they do it to lure in consumers into the Amazon ecosystem and marketing other types of products.
However, there isn’t enough data out there to prove if Amazon’s spending on shows has lured in people to become Prime subscribers and maintain their subscription. What we do know is that Amazon has become an extremely successful company, bringing in $470 billion in sales and $33 billion in net income in 2021 alone. In addition, its advertising sector is undoubtedly booming. And while Amazon’s video service is the second largest contributor for new subscribers to Prime following shipping, we aren’t exactly sure what this means just yet.
Given the fact that the company has what seems to be unlimited resources, what exactly is their strategy? Think about it – Amazon is not stressing about attracting and maintaining subscribers, like Netflix and Disney may stress about it. But still, many people in the industry are wondering whether Amazon will lose interest and shut down its entertainment sector altogether like Microsoft and Yahoo. While that is a possibility, any company, including Amazon, wouldn’t just purchase MGM for $8.45 billion and commit to an 11-year football contract if the plan was to give up on the entertainment sector any time soon.
But there have been signs that Amazon has figured out its identity as a streaming service, given that more shows such as, “The Terminal List,” “The Boys,” “Outer Range,” and “The Wheel of Time” have captured large audiences. These shows cater to more of the modern consumers of Amazon’s subscribers. In addition, the 11-year football contract that Amazon signed on will be the exclusive to the company for years to come. There’s also a large bet on “Lord of the Rings,” as it will most likely bring on a huge audience to the Amazon ecosystem.
Based on these new additions and much more to come, it seems likely that Amazon will be on a hot streak for some time in its entertainment sector of the business.
As more streaming services brace themselves for what’s to come for Amazon, competition will intensify among the streaming conglomerates. One of the many benefits of Amazon and what sets them apart from the competition, is that its Prime subscriptions have bundled services, unlike many other streaming services on the market. With that being said, Amazon has a reduced risk of subscription cancellations. Because of this, more streaming services will likely hop on the bandwagon of bundled services to minimize any risk of subscription cancellations. The good news is that Amazon doesn’t have to have that fear. This could mean substantial and long-term growth for Amazon and its many services altogether.
About Vedette Finance
Vedette Finance, founded by Tarek Anthony Jabre, in 2012, is a film development and finance company, with a wide-reaching international network of finance and talent. The company’s fundamental objective is to develop its premium value slate, creatively, and structure the financing, to maintain a steady output of high-quality film releasing. For more information, visit www.VedetteFinance.com
Online Streaming: What’s Next For Netflix
Online Streaming: What’s Next For Netflix
As our economy is in a constant state of flux, businesses are consistently working to thrive and keep their edge in our ever-changing marketplace. Netflix is no different and they are finding ways to stay above the rest. They are facing the same challenges as their competition, in particular, a slow down in the growth of subscribers and lower consumer discretionary spending.
As more companies are establishing themselves in the streaming space, like The Walt Disney Company and Amazon, Netflix is evolving and adapting, which means that they will be moving past their current business model. This is common practice for businesses across all industries, as businesses engage to secure sustainable growth in earnings in the long run.
Earlier this year, Netflix hinted about moving its streaming service into an ad-based model. The company also announced in July that it would partner with Microsoft Corporation to launch the model in early 2023. However, it seems that the deadline has moved up the launch of the ad-supported tier to November 1, 2022, ahead of Disney+, which is also planning to implement ad-supported streaming on December 8, 2022. These are exciting, and strong proactive steps.
According to released statements, the ad-supported tier will be set in motion for a selected number of markets where the advertising spend is already high. The U.S. region has the biggest digital ad spend and is also Netflix’s largest acquired piece of the pie. As a result, the ad-supported tier will most likely launch in the U.S. before moving on to other key markets throughout the world.
In an article published by Variety, it is said that the ad-supported tier will launch in the U.S., Canada, UK, France, and Germany. But, it is also worth noting, that Netflix isn’t the only streaming platform to adopt the ad-supported tier strategy. For example, both Hulu and HBO Max have ad-based plans, which are less expensive than their ad-free plans. As mentioned previously, Disney+ is also in the process of joining the platforms, offering ad-supported streaming.
Those following this news believe that Hulu is a prime example of how the implementation of an ad-supported tier on a streaming platform can be a success story for these companies. For instance, Hulu has an estimated subscriber base of 40 million and has produced close to $4 billion in advertising revenue annually.
As the implementation of the ad-based platform for Netflix approaches, it is important to keep an eye on how the company will approach the platform change with its partner Microsoft. All things considered, this may prove to be an outstanding outcome for Netflix, as it is the largest streaming platform in the world.
Too good to be true? Investors will have to wait and see, but many speculate that this change will ultimately generate substantial and long-term growth for the company, while still offering quality streaming services. Netflix will have evolved, with a new business model, providing itself with a sustainable future-forward platform.
The Takeaway
Netflix is facing business challenges like many other companies – stay the course and hope, or evolve their business model to address the current and forecasted marketplace. Netflix is being challenged to find that new mix. By editing their model into an ad-based streaming service they will be able to significantly increase revenue while providing for sustainable growth and keep their majority market segment.
About Vedette Finance
Vedette Finance, founded by Tarek Anthony Jabre, in 2012, is a film development and finance company, with a wide-reaching international network of finance and talent. The company’s fundamental objective is to develop its premium value slate, creatively, and structure the financing, to maintain a steady output of high-quality film releasing. For more information, visit www.VedetteFinance.com