How much is a twelve year media brand for ethics worth in the UK?
How much is a twelve year media brand for ethics worth in the UK?
Discovery Inc. is looking to launch a new streaming outlet that brings golf content to overseas markets which will become a “Netflix for golf.”
Behind the impetus for some – not all – of the glitzy new service is a gloomy old problem: As media companies work to build new connections through broadband streaming, they continue to lose links to consumers via cable and satellite subscriptions.
According to data from Kagan, a market research firm that is part of S&P Global Market Intelligence, satellite broadcasters lost 726,000 subscribers, the industry’s worst quarter on record. Combined with cable and telecom distributors, the sector shed 1.2 million video subscribers in the three-year period ending September 30, 2018.
At Pivotal Research, analysts have predicted 2019 pay-TV losses will “continue at a similar pace to ’17 and ’18 as consumers continue to rebel against the rising price of PayTV amidst the continued emergence of budget entertainment alternatives.”
Hopes that new customers for broadband services such as Sling TV, DirecTV Now, Playstation Vue or live-TV options from Hulu or YouTube may have been tempered during the period: Those services have gained about 2.1 million new subscribers in the first nine months of the year, but traditional outlets lost 2.8 million, according to Kagan.
To make up for the subscriber shortages, the industry is working to create a swarm of new Netflixes – and fast.
“Consumers have much more flexibility to pick and choose the things they want to subscribe to, and I think that is going to be more attractive to a greater majority of people than a traditional pay TV company giving them a handful of restrictive bundles to choose from,” says Tim Hanlon, CEO of Vetere Group, who consults for media and marketing companies.
“Most programmers need to gently land their pay TV model while greatly ramping up their direct-to-consumer offerings. That is the concern that most television managers have over the next five-plus years – manage the decline of the bundle and shift to the expertise of being a direct-to-consumer proposition.”
To be certain, some of the declines have been driven by distributors themselves. AT&T and other video conduits have decided to get out of the business of hanging on to low-profit subscribers, the ones who sign up when it’s time for another season of “Game of Thrones” or another football cycle.
Even so, it’s clear the industry is trying to look past its traditional business. Walt Disney in 2018 launched ESPN +, a subscription-based broadband service for sports fans that gives them new programs and games coverage they won’t see on the flagship cable network.
In September, Disney said the service had notched more than 1 million paying subscribers in just five months (a portion of them came from ESPN Insider, a now-defunct ESPN subscription service).
In 2019, media companies will bet even more heavily on streaming. AT&T plans to unveil a subscription-based offering using its WarnerMedia content – with three different pricing tiers.
Disney has grand hopes for Disney +, a subscription service that will feature programming from its Disney, Pixar, Star Wars and Marvel lines. CBS is placing more emphasis on its “CBS All Access” streaming service. AMC Networks has backed Shudder, a streaming service devoted to horror.
One can easily imagine a new world in which TV fans decide to get their primetime entertainment from Disney, Amazon, Netflix, WarnerMedia or Hulu, rather than CBS, NBC, Fox and ABC. But that future is in no way guaranteed.
Can the average family – even without cable and satellite – afford to subscribe to so many different services, let alone other things like Apple Music or Sirius XM radio? “We simply don’t think it is plausible, in a world of rampant password sharing and of two home subscriptions collapsing to one, that we will continue to see anything like a sustained 1:1 conversion rate.
That’s obviously bad news for all cable networks,” said a recent report from media-analysis company MoffettNathanson. Meanwhile, the firm’s analysts suggest, linear TV networks will need to latch on to “the most passionate viewership, driven predominately by live news and sports.”
In that world, some traditional TV outlets may not survive. NBCUniversal has not been afraid to shut down several cable networks in recent years.
Source: Variety Media
Samsung is preparing to integrate third-party voice assistants into its 2019 line of TV sets. The company may announce a partnership with Google to integrate Google Assistant as early as next month, when it will unveil next year’s TVs at the Consumer Electronics Show (CES) in Las Vegas.
Samsung is likely also going to put a bigger emphasis on audio quality, and could include technology that mimics the way Apple’s HomePod tunes music to its environment into some of its high-end TV sets. A Samsung spokesperson declined to comment on those features, and instead pointed to the announcement of 2019 models of Samsung’s the Frame and Serif TV models.
Samsung’s embrace of third-party voice assistants comes just months after the company added its own voice assistant Bixby to its 2018 TVs. However, the current integration of Bixby on TVs is fairly limited. Consumers can use the voice assistant to control playback of videos, but Bixby can’t yet open and control third-party apps.
The company has also not opened up Bixby development to third-party TV app developers, but plans to do so next year. “We are at the very early stage of development for Bixby for TV,” admitted Samsung senior staff engineer James Jung during a session at the company’s recent developer conference in San Francisco.
By adding third-party assistants, Samsung can offer developers more flexibility, and take advantage of the growing number of smart speakers to bring far-field voice control to TVs without built-in microphones. Emarketer estimated this week that 74.2 million people will use a smart speakers in 2019. Samsung introduced its very first Bixby smart speaker in 2018, but has not made the device available for sale yet.
According to Emarketer, Amazon is expected to capture around 63% of the smart speaker market in 2019, with Google coming in second with 31%. An Adobe Analytics report revealed this week that 63% of smart speaker owners have such a device in their living room. In other words: People are already using third-party voice assistants in proximity to their TVs, so it only makes sense for Samsung to plug into those ecosystems.
Samsung’s integration of third-party voice assistants is expected to be similar to the way competitors like LG and TCL have integrated these assistants. On LG TVs, consumers can access local weather, their calendar, and more through the Google Assistant, and also use the assistant to control smart home devices. However, universal search is still being handled by LG’s own software. This helps TV makers to build commercial relationships with app developers and service providers, and keeps them in control of a key aspect of their smart TV systems.
Samsung is also expected to emphasize sound quality as a key area of improvements over previous TV generations. The company registered for a number of trademarks in late November that are related to TV audio, including one for “audio spatial intelligence,” one for “volume intelligence,” and one for “audio scenic intelligence.”
Audio spatial intelligence is being described as “software for televisions, namely, software for use in optimizing sound quality depending on the surrounding environment, such as space size and ambient noise,” whereas scenic intelligence improves TV sound quality based on the type of content users are watching.
Smart speakers like Apple’s HomePod and Google’s Home Max already automatically optimize sound based on their surroundings by monitoring music through built-in microphones. Sonos previously developed a technology to manually tune a speaker for the room it is placed in, which required consumers to wave their phone around while listening to test tones. It’s unclear whether Samsung will integrate microphones directly into its TV sets to optimize audio for consumers’ living rooms, or whether it will rely on a phone or remote control with integrated microphone to optimize these settings.
Samsung is also expected to further build out its TV Plus service, which presents over-the-top streaming channels in a linear-like environment. These types of offerings have seen significant growth in 2018, with Samsung content partner Jukin recently revealing that it was streaming more than 70 million minutes of linear OTT content to consumers per month.
TV Plus is important to Samsung because it allows the company to generate additional revenues after the sale of a TV set. Samsung has for some time tried to transform its smart TV system into a services business that would generate ancillary revenue streams, but the company has at times struggled to turn its TV software into more than just a way for consumers to launch Netflix and YouTube.
Case in point: Samsung acquired failed smart TV startup Boxee in 2013 to build an ambitious smart tvOS that would have replaced the traditional TV remote with a tablet for second-screen control — something that was internally known as “perfect experience.” However, the project was scrapped, and most of Boxee’s staff was laid off, before it ever shipped.
This year, the smart TV team saw another significant departure: content and services chief product officer Gilles BianRosa parted with the company over the summer, Variety has learned. BianRosa was hired in October 2016 from Tivo, and previously led the smart TV device startup Fan TV.
Source: Variety Media
Spotify and Wixen Music Publishing — which sued the streaming giant late last year for a headline-grabbing $1.6 billion — has announced that they have settled the lawsuit. According to the announcement, “The conclusion of that litigation is a part of a broader business partnership between the parties, which fairly and reasonably resolves the legal claims asserted by Wixen Music Publishing relating to past licensing of Wixen’s catalog and establishes a mutually-advantageous relationship for the future.”
While terms of the deal were not disclosed, a source close to the situation told Variety that, not surprisingly, the settlement amount was well short of $1.6 billion. If it were, as a public company Spotify would be obligated to disclose it per SEC rules, which suggests a 5% threshold (e.g. the impact of the event is 5% or more of revenue, earnings, etc) as a starting point.
In the lawsuit, Wixen, which handles titles by Tom Petty, Neil Young, Steely Dan’s Donald Fagen, Weezer’s Rivers Cuomo, Stevie Nicks, and others, alleged that Spotify was using thousands of songs without a proper license and sought damages worth at least $1.6 billion and injunctive relief.
“Prior to launching in the United States, Spotify attempted to license sound recordings by working with record labels but, in a race to be first to market, made insufficient efforts to collect the required musical composition information and, in turn, failed in many cases to license the compositions embodied within each recording or comply with the requirements of Section 115 of the Copyright Act.
Despite the size of the damages, Wixen signaled a willingness to settle in its first statement. “We’re just asking to be treated fairly,” president Randall Wixen said. “We are not looking for a ridiculous punitive payment. But we estimate that our clients account for somewhere between 1% and 5% of the music these services distribute. Spotify has more than $3 billion in annual revenue and pays outrageous annual salaries to its executives and millions per month for ultra-luxurious office space in various cities. All we’re asking for is for them to reasonably compensate our clients by sharing a miniscule amount of the revenue they take in with the creators of the product they sell.”
In Thursday’s announcement, Wixen said, “I want to thank [Spotify cofounder and CEO] Daniel Ek and [Spotify General Counsel and VP, Business & Legal Affairs] Horacio Gutierrez, and the whole Spotify team, for working with the Wixen team, our attorneys and our clients to understand our issues, and for collaborating with us on a win-win resolution. Spotify is a huge part of the future of music, and we look forward to bringing more great music from our clients to the public on terms that compensate songwriters and publishers as important partners. I am truly glad that we were able to come to a resolution without litigating the matter. Spotify listened to our concerns, collaborated with us to resolve them and demonstrated throughout that Spotify is a true partner to the songwriting community”
“We’d like to thank Randall Wixen and Wixen Music Publishing for their cooperation in helping us reach a solution,” said Gutierrez. “Wixen represents some of the world’s greatest talents and most treasured creators, and this settlement represents its commitment to providing first-rate service and support to songwriters while broadening its relationship with Spotify.”
Source: Variety Media
Hearst Television has set a multi-year renewal of its contract with Nielsen to provide ratings for its local TV and radio stations.
The deal calls for Hearst to use a range of new Nielsen software and data tools in its selling its wares to local advertisers. The pact covers Hearst’s 30 TV stations in 26 markets and two Baltimore radio stations.
The Hearst renewal is significant for Nielsen in the wake of CBS’ threat to drop the ratings provider as its year-end contract expiration approaches. The major networks have long been frustrated with Nielsen’s struggles to keep pace with measurement needs in the multiplatform universe. Nielsen ratings, while still the industry standard currency for advertising deals, are becoming less central to the ad sales business as data options proliferate in the digital age.
“Nielsen is an important partner in our television and radio station business,” said Eric Meyrowitz, senior VP of sales for Hearst Television. “We look forward to utilizing Nielsen’s audience measurement solutions and measurement enhancements to showcase the value of our audiences and deliver increased ROI to our advertisers.”
Nielsen said it was eager to work with Hearst to develop new measurement tools.
“Hearst Television is one of the most innovative broadcasters in the industry and is at the forefront of providing advertisers access to viewers across traditional and digital platforms,” said Jeff Wender, managing director of Nielsen Local Media. “We are thrilled to reach this agreement with Hearst Television and to collaborate on the best ways to monetize their audiences.”
Source: Variety Media
Warner Music Group Corp. has announced that in 2018 its revenue exceeded $4 billion for the first time in company history during its call for fourth-quarter and full-year financial results for the period ended September 30, 2018. It also noted that streaming revenue is up 20.4% (18.5% in constant currency).
“We’ve had another terrific year and revenue exceeded $4 billion for the first time in our 15-year history as a standalone company,” said Steve Cooper, Warner Music Group’s CEO. “We continue to invest in our business for the benefit of our recording artists and songwriters and to fuel our long-term growth.”
“The fact that we ended the year with over $500 million in cash, despite significant spend on A&R, marketing, M&A and dividends, is evidence of the underlying strength of our business,” added Eric Levin, Warner Music Group’s Executive Vice President and CFO. “We’re on a great run and I’m looking forward to many more years of success.”
Answering a question about whether streaming revenue will begin to fall off in the coming months, Cooper said he expects it to “grow in a robust way,” noting that it will slow down over time in western countries as saturation begins. In emerging markets, he said, revenues and subscribers are “just now being tapped and I would expect to see growth,” noting that economics will probably be “reduced” by comparison, and “we can expect over a time a more modest trajectory.”
According to the report, for the fourth quarter, WMG revenue grew 13.3% (or 14.8% in constant currency). Growth in Recorded Music digital, licensing and artist services and expanded-rights revenue and growth in Music Publishing digital, performance, synchronization and mechanical revenue were partially offset by a decline in Recorded Music physical revenue. Revenue grew in all regions. Digital revenue grew 21.4% (or 23.1% in constant currency), and represented 57.4% of total revenue, compared to 53.5% in the prior-year quarter.
Operating income was $16 million compared to an operating loss of $1 million in the prior-year quarter. OIBDA was $72 million, up 20.0% from $60 million in the prior-year quarter and OIBDA margin increased 0.4 percentage points to 6.9% from 6.5% in the prior-year quarter. Net loss was $13 million compared to a net loss of $38 million in the prior-year quarter and adjusted net income was $10 million compared to an adjusted net loss of $39 million in the prior-year quarter. As of September 30, 2018, the Company reported a cash balance of $514 million, total debt of $2.819 billion and net debt (total long-term debt, net of deferred financing costs, minus cash) of $2.305 billion.
For the year, total revenue increased 12.0% (or 9.2% in constant currency). Domestic revenue rose 10.5% and international revenue rose 12.7% (or 7.8% in constant currency). Revenue grew in all regions. Digital revenue grew 20.4% (or 18.5% in constant currency), and represented 56.2% of total revenue, compared to 52.3% in the prior year.
Operating income was $217 million down from $222 million in the prior year and operating margin was 5.4% down from 6.2% in the prior year, driven by higher revenue which was more than offset by increased investment in A&R and marketing as well as higher SG&A expenses including for variable compensation, restructuring and facilities expenses related to the Los Angeles office consolidation.
Net income was $312 million compared to $149 million in the prior year. Adjusted net income was $388 million compared to $162 million in the prior year, reflecting higher other income related to the net gain on the Spotify share sale, a prior-year loss on revaluation of the company’s Euro-denominated debt due to changes in exchange rates, a prior-year non-cash loss on investments, lower interest expense in the fiscal year, higher income tax expense related to the impact of tax reform on deferred tax assets in the fiscal year, the prior-year benefit from the reversal of a U.S. deferred tax valuation allowance and the prior-year tax benefit of currency losses on inter-company loans. Net debt (total long-term debt, net of deferred financing costs, minus cash) at the end of the fiscal year was $2.305 billion versus $2.164 billion at the end of the prior year, mainly due to the difference in year-end cash balances.
Recorded Music revenue grew 12.5% (or 13.9% in constant currency). Digital growth reflects a continuing shift to streaming. Licensing revenue growth was due to increased synchronization activity, timing-related higher broadcast fee income and the impact of acquisitions.
During the call, Cooper cited the success of Atlantic’s Cardi B, Ed Sheeran, Bruno Mars and “The Greatest Showman” soundtrack; for Warner Bros. Records Dua Lipa, Bebe Rexha and Lil Pump; and for Nashville Dan and Shay. He also paid tribute to late Warner recording artists Aretha Franklin and Mac Miller.
Recorded Music operating income was $31 million, up 121.4% from $14 million in the prior-year quarter and operating margin was up 1.8 percentage points to 3.6% versus 1.8% in the prior-year quarter.
For the full year, recorded music revenue rose 11.3% (or 8.5% in constant currency). Recorded music digital revenue grew 19.3% (or 17.3% in constant currency) and represented 60.1% of total recorded music revenue versus 56.0% in the prior year. Domestic recorded music digital revenue was $1.037 billion, or 71.0% of total domestic Recorded Music revenue, versus 67.2% in the prior year.
Recorded music operating income was $307 million up from $283 million in the prior year due to revenue growth and operating margin was down 0.3 percentage points to 9.1% versus 9.4% in the prior year due to higher compensation and higher facilities expenses related to the Los Angeles office consolidation.
For Warner/Chappell publishing, in Q4 revenue rose 15.7% (or 18.0% in constant currency) with growth in all segments reflecting the ongoing shift to streaming in digital, timing of distributions in performance, higher licensing revenue in synchronization and the timing of mechanical distributions. Publishing operating income was $39 million compared with $36 million in the prior-year quarter driven by revenue growth.
For the full year, publishing revenue rose 14.2% (or 11.8% in constant currency) with growth in all segments. Music Publishing digital revenue rose 26.7% (or 25.4% in constant currency) reflecting the ongoing shift to streaming, and represented 36.3% of total Music Publishing revenue versus 32.7% in the prior year. Growth in performance revenue was due to higher distributions, synchronization revenue growth was driven by higher television and commercials income and mechanical revenue growth was timing-related.
Source: Variety Media