Streaming during a pandemic
Hello and welcome back to the Media Nut, a newsletter about media. Hope you had a nice weekend. Or, whatever a weekend is these days.
When we moved to suburban New Jersey two years ago, we decided, for the first time in my life, to not call a cable company for television services. Living in Brooklyn, our cable and internet bill was a little more than $200-per-month, and it was time to play the field.
So thinking of all the Fios commercials I’d seen over the years but never able to actually get, I called up Verizon and got me some of that sweet fast internet for $80/month. I got a Hulu Live subscription for $55/month; we had our Netflix subscription at $12/month; and finally HBO for $15/month. And now my tv bill was a respectable $162/month.
(I don’t include Amazon Prime Video subscription because that’s an add-on to Prime. Imagine having a potential multi-million dollar streaming business as a free giveaway! Though if you’re not a Prime member, you can get Prime Video for $9/month.)
In the winter, Disney+ offered a 3-year deal for $140 (I have two little kids, so this was no-brainer) and Hulu upped Live to $65, and for whatever reason, that was a bridge too far for me. So I scaled back to the basic Hulu plan for $5/month and bought a digital antenna.
I cut the cord and now only pay $112/month.
Then the streaming wars went into hyperdrive, as companies fight each other for supremacy and for viewers’ eyeballs and wallets. Apple+, Disney+, Peacock, HBOMax, CBSAllAccess, YouTubeTV, Quibi. It’s a smorgasbord of content at a time when Americans are indoors questioning everything, including why paying for TV they can’t watch.
Over the weekend, CNBC highlighted the intricate web of traditional cable companies, reporting that 80 million Americans are paying about $20/month for sports that aren’t being aired, and that New York’s Attorney General, Letitia James, sent a note to seven cable providers to provide relief:
“At a time when so many New Yorkers have lost their jobs and are struggling, it is grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing,” James said in a statement. “These companies must step up and immediately propose plans to cut charges and provide much needed financial relief. This crisis has brought new economic anxiety for all New Yorkers, and I will continue to protect the wallets of working people at every turn.”
During this period of economic uncertainty, for both businesses and people, some streaming services have released shows/movies early or are extending free trials.
As a card carrying member of the internet, you are fully aware that today is Star Wars Day, where #MayTheFourthBeWithYou will trend all day on social platforms. And if you’re a Disney+ subscriber, the final episode of the final trilogy is now on your TV, two months before it was originally slated to run.
This comes on the heels of the streaming service giving parents a treat by releasing Frozen 2 three months early.
On the free trials side, Adweek reports today that ViacomCBS’s approach to giving potential users additional days to kick the tires might be good for converting potential subscribers and for ... ViacomCBS.
“It’s smart marketing,” said Marc DeBevoise, chief digital officer at ViacomCBS, who oversees CBS All Access as CEO and president at CBS Interactive. “If we can get out an awareness drive for our service, which is not one of the big three just yet, garnering some of that mind share at this moment is a smart move.”
Perhaps. What is clear, is that all the streaming efforts from broadcasters will not be able to make up for the lost revenue over the last several weeks.
According to Mediapost, national TV ad revenue took a hit in March, “down 12.8% to $3.8 billion, with the first quarter of 2020 sinking 5.4% to $10.8 million, according to Standard Media Index.”
This is, of course, unsurprising. Especially as the lucrative sporting events in March, which generate tons of ad revenue, were cancelled. (This didn’t stop some deals from happening. Amazon and the NFL agreed last week to extend their Thursday Night Football deal through 2022.)
April will see similar numbers. For example, Nielsen data found that total TV usage during the week of April 13-19 was down about 2% compared to the prior weeks. Adweek reported that “about 23.4% of people with TVs in the U.S. watched traditional live or time-shifted programming on their television or connected devices such as smart TV apps, streaming sticks or gaming consoles in that weeklong period.”
Watch for screen time, linear and streaming, to dip as the weather gets nicer and people leave their houses (hopefully with their masks on). But the competition will remain fierce. With only so much time in the day, let alone so much discretionary spend, networks and streaming services will continue to hunt for ways to attract viewers.
And perhaps the most interesting battle in the streaming war isn’t on the screen-at-home front, but between AMC Theaters and Universal Studios. The former, the largest movie house in the nation, decided to not show any Universal film because the latter decided to run Trolls World Tour online instead of movie theaters because people aren’t leaving their homes.
The WSJ reports that the film “has generated about $95 million in rental fees from nearly five million customers since its release, based on revenue figures cited by the person familiar with the matter, who didn’t dispute the estimate.”
What will happen, though, when there is no new content to give viewers? Shows and films are on hold. In the thick of this pandemic, it’s hard imagining people going to a movie theater, let alone actors shooting scenes in crowds or having romantic scenes.
Finally, we’ve seen a spike in Zoom reunion shows (Fresh Prince; Goonies; etc) and remote talk shows. While these are enjoyable, and scratch a nostalgic itch, studios and networks can’t make much money from them.
But at least I got my TV bill down.
If you’ve cut the cord, or have a streaming strategy, I’d love to hear from you.
TV On The Radio “Golden Age”