The beauty of a slow holiday week is it is also a slow news week, which is valuable time to reflect upon the year and recent headlines.
Five themes/questions surfaced for me last week:
Whether The Beatles documentary Get Back is a market test of more adult fare on Disney+
How Q3 2021 had one common theme: everyone is pivoting their value proposition and the financial implications of why
Whether Netflix's big data release sets a new precedent for creator transparency in the market
How a recent piece on RSNs from Bill Shea of The Athletic reflects the emerging problems with sports fandom in streaming era; and,
Whether the market understands the significance of Mr. Beast getting 100MM+ views over 72 hours for a recreation of Squid Game
I'm writing about #1 today, and I'm going to write about #2 for Members on Wednesday.
As for #3 through #5, I plan on writing them as short essays for Members, only, as a make-good for a missed Member Mailing in September/October.
Sign up here for a monthly or annual membership to access these essays and more.
A Note on PARQOR Membership
I have been spending much of the past four weeks "on-boarding" onto The Information's back-end. I think we are 99% there.
In this time, I also have been thinking about how to improve and expand membership. At this point, with over two years of mailings, the objective now is to build out additional "premium" services upon the "intellectual" capital that has accumulated to date.
The general objective is to start structuring the Five Frameworks and other frameworks to emerge (the content categories below) around the "Revealing Insights" slogan.
I wrote about one "start-up BCG-like business in 2021" path in the announcement New PARQOR.com is Live back in June. I am still toying with that model.
Readers have given good feedback about adding events exclusive for Members. I will begin adding those in 2022.
This may read ambitious given emerging fears about a "fifth wave" of the pandemic, but there is demand for events.
Also, some of you have tuned into the Twitter Spaces I have been co-hosting with Brandon Katz (who just left Observer to join Morning Brew), which are 15-minute chats about that day's Member Mailing.
I plan on continuing those and starting Wednesday I will start sharing the links to the Spaces in Member Mailings.
More to come...
A Short Essay on The Beatles' Get Back & The Futures of Disney+ & Hulu
There was a funny tweet from Recode Media's Peter Kafka about The Beatles' Get Back documentary on Disney +:
I think Disney and the Beatles are going to make smoking cool again.
There is an unusual amount of cigarette smoking (and swearing) in Get Back (which is an extraordinary documentary, and I say that having watched only 50% of it as of this mailing) - not unusual for 1969, but certainly for 2021, and definitely for Disney+ and the Disney brand.
There is also a brief appearance by the actor Peter Sellers early in the second of three episodes, who upon leaving is told by John Lennon: “Just don’t leave the needles lying around.”
It's a joke about drugs - Sellers was a drug addict and Lennon was a recreational user of drugs - and made in the context of other jokes about drug use from Lennon. Again, not unusual for 1969, but certainly for 2021, and definitely for Disney+ and the Disney brand.
This off-brand outcome for both Disney and Disney+ emerges at a time when more questions are emerging about the future of Hulu, one of Disney's destinations for mature content (Star and Star+ being the others).
I have written before about Disney A/B/C/D testing different distribution models in different marketplaces in Some Rewards for Skeptics of Disney+.
The Beatles' Get Back documentary seems to be a series that would otherwise be on Hulu if not for Disney management (all signs point to Executive Chairman and Chairman of the Board Robert Iger as the key decision-maker here).
This was likely not a decision that was made lightly. As I wrote in February 2020 in Surprising executive changes at Disney reveal surprising weaknesses:
An upside for Disney of owning Hulu is that Hulu offers a streaming alternative for content that is not "family friendly" at an extraordinary scale (over 30MM subscribers). This week Disney+'s new show Love, Victor, a spin-off of the gay romance movie Love, Simon was moved from Disney+ to Hulu, where it will debut in June (which is Pride Month) for this reason. Another show, a revival of its popular Disney Channel series Lizzie McGuire, has been put on hiatus for reasons its star Hillary Duff has said also have to do with the show not being "family friendly". Both moves were preceded by High Fidelity moving to Hulu a year ago, which debuted this month to positive reviews.
Eighteen months ago, "family friendly" content resulted in cancellations (Lizzie McGuire) and content moved over to Hulu (Love, Simon and High Fidelity).
Now, a well-reviewed music documentary with the world's most famous band is likely going to drive a spike in new sign-ups to and engagement on Disney+. But, it is not "family friendly" content on Disney+.
Is this intentional?
Paths to an answer lie in three stories that emerged over the last two weeks about Disney+'s and Hulu's futures:
First, Jessica Toonkel of The Information reported that the job of chairman of Disney General Entertainment Content "has been made harder by the fact that the company is still figuring out what Disney+ shows are—and aren’t."
The implication is why we're seeing Get Back on Disney+ and not Hulu may be a reflection of the operational confusion and content "pipeline problems" that Toonkel reported in detail.
Second, Dylan Byers of Puck News reported that the future of Disney+ seems increasingly intertwined with Hulu:
So, will Chapek expand the Disney+ aperture or focus on feeding the core audience? The answer, according to a number of well-connected Hollywood executives I surveyed this week, is both, and he will get there via Hulu....Hulu is the vehicle Disney needs to expand its audience beyond families and superfans while keeping the Disney+ brand intact.
...A source familiar with Disney’s roadmap says that Chapek plans to budget up to $7 billion annually for Hulu content—a mind-boggling increase from previous annual budgets of $2-$3 billion that would put Hulu spending almost as high as the $8-to-$9 billion that Disney plans to spend on Disney+ content in 2024.
This suggests something slightly different than the first article: Get Back may be an interim solution but in the long run, similar content will end up on Hulu (and by implication, Star).
Third, The Wall Street Journal reported:
NBCUniversal is considering removing much of its content from Hulu and making it exclusive to its Peacock platform, according to people familiar with the matter, as the media giant determines how to best play its hand in the streaming wars.NBCUniversal, which owns one-third of Hulu, with Walt Disney Co. controlling the rest, has to make a decision soon. Under the terms of an agreement with Disney, NBCUniversal has a one-time window to exit from the content-licensing agreement between the two early next year. If it doesn’t exercise the option, the content would remain there until at least 2024.
Hulu may only lose "a small percentage" of its content in that instance, but "roughly 80% of NBC’s digital audience is from Hulu", according to the article.
The logical implication is that Disney especially needs more original content for Hulu than NBCU content to "expand its audience beyond families and superfans while keeping the Disney+ brand intact" (Byers).
How Should We Think About Get Back?
So Get Back "should" be on Hulu because Hulu needs more original content to get more audiences, the series is more adult fare, and the Disney+ brand "needs" to remain intact.
But there are very good business reasons why it is not on Hulu: Hulu is not international, international distribution for Hulu content is via Star and Star+, and Disney+ has greater scale than either one (neither of which has been disclosed yet).
If we believe Disney's risk-averse past is precedent (which I do), Get Back would not be on Disney+. But, if Disney's issues with streaming go deeper than the three stories from last week (as I have argued previously), then all available evidence suggests the outcome is another reward for skeptics of Disney+.
Must-Read Monday AM Articles
* Director Peter Jackson shared some behind-the-scenes details on Get Back with Variety
Emerging "Metaverse"-type convergence strategies
* Netflix acquired premiere visual-effects house Scanline VFX, the second major M&A deal in the VFX space this month, after game-development software vendor Unity said it will buy Peter Jackson’s Weta Digital technology and tools business for $1.625 billion.
Kevin Tran of Variety Intelligence Platform broke down the positives and (mostly) negatives of Justin Bieber's virtual performance on interactive entertainment platform Wave ($ - paywalled)
* Netflix hired Scopely’s Amir Rahimi as vice president of game studios
Aggregator 2.0
* Streaming services offered Black Friday deals, including Disney's Hulu
* Spotify CFO Paul Vogel told the MIT Sloan CFO Summit the company has $3.5 billion cash on its balance sheet that can be used for growth and expansion—particularly in the podcast space.
* Riot CEO Nicolo Laurent is looking to the future of how gaming and entertainment can build upon each other through the company’s fan-focused approach
* TikTok is currently testing a new feature in its app, Discover, which presents a vertical feed of music videos that users can scroll through and optionally like or skip
* YouTube is expanding a recent global test that defaults the YouTube mobile app to open directly in Shorts if the user had previously watched Shorts videos before exiting.
Sports & Streaming
* The Athletic shared with Bloomberg that it "has hit a wall" in growing subscribers, and is now looking for a buyer to support an ad model.
Creative Talent & Transparency in Streaming
* Saudi Arabian money has returned to Hollywood in a big way (not that it ever left...)
Original Content & “Genre Wars”
* HBO Max told Deadline that box office disappointment King Richard had a view completion rate of 100%.
* HBO Max will distribute Fox’s film slate for one final year under an unusual deal to share streaming windows with Disney Plus and Hulu for half the studio’s titles, starting with animated family comedy “Ron’s Gone Wrong” next month.
Comcast’s & ViacomCBS’s Struggles in Streaming
* NBCU's Peacock started streaming into Europe with Sky TV and NOW customers in the UK and Ireland on November 16.
AVOD & Connected TV Marketplace
* Sahil Patel of The Information reports YouTube TV is talking with companies including Brat TV, Vox Media and Pocket.Watch about launching channels on the virtual MVPD.
Other
* NFTs, explained (from The Verge)
* Catie Keck "pops the hood" on Open Connect, Netflix’s in-house content distribution network specifically built to deliver its TV shows and movies.
* Business Insider dove into the rise and fall of audio chat app Clubhouse ($ - paywalled)
* Cinemark put aside its beef with Netflix and distributed Red Notice, "the most successful title it has carried"
* Top management at theatrical distribution chain AMC Entertainment Holdings have unloaded shares worth more than $70 million in 2021 after selling a fraction of that amount in prior years, according to regulatory filings.
* “Encanto,” a musical about a family in Colombia with magical powers, generated an estimated $40.3 million in ticket sales over the five-day holiday weekend.
* Actor Stellan Skarsgård gives an excellent answer to the question "what do you think about superhero movies" question;