Looking back on 2021, I think two broad trends played out over the year in the post-"streaming wars" marketplace:
The "pull-forward" impact of the pandemic, and
The "not quite there yet" outcome for every company in media
The "pull-forward" impact of the pandemic was first mentioned by Netflix management in Q1 2020. It was prescient, and has been as far-reaching as Q3 2021, where Disney saw its growth for Disney+ slow.
The "not quite there yet" outcome is my term, and it also comes from Netflix, albeit indirectly. Netflix's recent announcement that it would not be renewing Cowboy Bebop – a live-action version of the popular 1998 Japanese anime TV series and the 2001 anime film – less than 28 days after the debut of its first season had echoes of its Jupiter's Legacy failure.
I wrote about this failure back in June in A Tough Week for Netflix’s Bets on Original IP:
Netflix continues to navigate an evolving and growing tension owning IP versus licensing IP. I do wonder whether Netflix’s ecosystem is fertile territory for cultivating this IP. Meaning, the question is whether a software service that relies on long-tail consumption can produce Disney-like, fat-tail IP in the long term. Reed Hastings and Ted Sarandos continue to sell investors that they can, but the evidence is still not there.
The failure of space Western Cowboy Bebop was not as significant as the failure of Jupiter's Legacy, which cost ~$200MM to produce, "was supposed to go on for several seasons and had a big reveal/cliffhangery ending", and "Mark Millar even was launching a new 12 issue comic tied to it", according to The Hollywood Reporter's Borys Kit.
But, it was a setback, nonetheless, leaving Netflix "not quite there yet" in terms of its objective to "become" Disney.
The Good "Not There Yet" Stories
The first "not quite there yet" moment emerged back in February 2021 with Discovery CEO David Zaslav realizing both "we're not quite there yet" and "we may not ever get there" (meaning, scale) when he called AT&T CEO John Stankey to discuss "what would we look like together with his assets and the Discovery global reach and the great libraries we have".
The call had been spurred by Disney "accelerating at that point because of COVID".
Ironically, despite Warner Bros. Discovery being the outcome of that call, HBO Max far surpassed expectations in 2021, growing 425% since launching in Q2 2020.
It succeeded despite upsetting Hollywood with its less-than-diplomatic roll out of its direct-to-streaming plans for is 2021 movie slate.
ViacomCBS and Comcast/NBCUniversal offered "not there yet" stories with Paramount+ and ViacomCBS. ViacomCBS has been selling Paramount+ as "launched" in 2021 – even though it was a reskin of CBS All-Access – while having more than doubled the subscriber base internationally.
Comcast/NBCUniversal management have been selling Peacock as "a brand that's only a year old, and it's either the number one or number two new brand in America that's been created". But, it also had to share with investors that the Olympics resulted in no significant bump to Peacock subscribers.
Starz CEO Jeffrey Hirsch told the annual UBS Technology, Media and Telecom conference that exploring "a full or partial spin-off, split-off, issuance of a tracking stock or other transactions" has the objective "having the ability to spend more and more on content to super-serve these two core demos will accelerate the business".
As for AMC Networks, it delivered a message to investors in Q3 that it "does not yet have enough content to grow its portfolio of streaming services to 20MM-25MM" (Why Growth in Streaming May Be Too Expensive for Shareholders).
And, The More Nuanced "Not There Yet" Stories
Spotify and YouTube offered more nuanced "not quite there yet" outcomes that reflected extraordinary successes and also real strategic weaknesses. Neither were impacted by the"pull-forward" impact of the pandemic, with both seeing continued growth well into 2021.
Spotify sold investors on the success of its creator economy strategy in 2020, which helped to drive its ad revenues for the year past $1B in Q3 2021. But the implication from management is that the strategy is very much in its early days (which I also recently discussed in Why Growth in Streaming May Be Too Expensive for Shareholders)
YouTube has also been selling Wall Street and creators on the success of its YouTube Partner Program, announced in August that it has over 2MM creators in its and has paid more than $30B to creators, artists, and media companies over the past three years, alone. But, it is also announced The YouTube Shorts Fund, a $100M fund distributed over 2021-2022, with the intent to build out its Shorts app to rival TikTok.
Both are betting on "the creator economy is our future" growth stories, but also telling investors they are "not quite there yet."
Conclusion
The two logical questions to an assessment of corporate business objectives like "not quite there yet" are:
Where is "there", exactly? And,
When is "yet"?
I think the most certain answers are for "there":
for streaming services, it's more spend leads to more growth (a point I dove into skeptically last Friday in Paramount+ Bets on User Interface... While Warner Discovery Bros. Talks Up Content), and
for platforms, it's the creator economy
But, as for the question of when is "yet"?, no one seems to want to make any promises. The answers fall across the board, from uncertainty (Peacock, Disney, Netflix, Warner Bros. Discovery) to somewhat certain (AMC Networks in 2025) to confidence (YouTube, Spotify).
Looking ahead to 2022, that is the key takeaway. Everyone is delivering an objective or objectives for "there", but few are telling us when, or even if they will ever, reach their objectives.
Must-Read Monday AM Articles
* The Hollywood Reporter dove into the why of a lack of transparency in streaming "
Emerging "Metaverse"-type convergence strategies
* Crypto’s hottest game, Axle Infinity, is "facing an economic maelstrom"
* Drew Harwell of The Washington Post profiled some Twitch streamers
* Epic Games showed off the realism of Unreal Engine 5 with The Matrix Awakens demo amid a huge computer-generated city.
Aggregator 2.0
* Verizon CEO Hans Vestberg told the virtual UBS Global Technology, Media and Telecom Conference that “We now have streaming services, we have gaming services, we have music services, and let’s see what we can do more.”
* "Apple Arcade is a terrific platform that's constantly putting a lot of games at the fingertips of casual gamers."
* Dan Reilly of Vulture broke down the stand-off between stand-up comics and Spotify
Sports & Streaming
* Patrick Crakes, strategic media consultant and former senior Fox executive, argued why the media world's digital future involves bundling.
* Which sports tempt fans to pirate streaming?
Creative Talent & Transparency in Streaming
* In 2021, Cameo said it welcomed 10,000 new stars onto the platform, bringing its total talent roster to 50,000. All told, Cameo stars have fulfilled 2.5 million shoutout requests since its founding in 2017.
* Pinterest is further investing in creator tools and video by having acquired the video creation and editing app Vochi for an undisclosed sum
Original Content & “Genre Wars”
* One reason Netflix and TikTok are successful is their ability to create, fuel and capitalize on cultural phenomena that might burn bright for a short time and then mostly go poof.
* After an exciting final race for the 2020-2021 season yesterday, "[Drive to Survive] has changed a sport", argues Matt Slater in The Athletic [$ - paywall].
* Amazon is in the beginning stages of developing studio programs in hopes of potentially having a full daily lineup, reports Andrew Marchand of the New York Post.
* Netflix , Amazon, Disney Plus and Apple TV Plus signed "a long-gestating agreement" with France’s broadcasting authorities (CSA) on Thursday to start investing 20% of their annual revenues on French content (between €250 million ($282 million) to €300 million ($330 million) on average per year).
* FX is joining National Geographic as a singular brand across linear and streaming Disney platforms globally
* Disney’s chief spoke to the FT about "his war with Netflix, irking the talent and breaking with the past"
Comcast’s & ViacomCBS’s Struggles in Streaming
* Major ad-supported streaming services like Discovery’s Discovery+, NBCUniversal’s Peacock and WarnerMedia’s HBO Max have been in a race to seemingly run the lightest ad loads in the market.
AVOD & Connected TV Marketplace
* Roku announced it reached an agreement with Google which will allow it to continue to carry both YouTube and YouTube TV on its platform. Roku declined to share the specifics of the deal terms, beyond saying it’s a multi-year extension that covers both services.
* FuboTV wrapped up its $190 million acquisition of Molotov earlier than expected. Molotov is a virtual MVPD based in France that also operates Mango, an ad-supported video-on-demand streaming service
* Best Buy has removed 5-series and 6-series TCL TVs from its store after widespread complaints of buggy Google TV software
* Comcast’s XClass TV chief Andrew Olson sat with Decider's Scott Porch to discuss Comcast's Smart TV strategy
Other
* Satellite radio broadcaster SiriusXM has tapped Joe Inzerillo, a top architect of the Disney + streaming service, to help it broaden its appeal to audiences outside the car.
* Business Insider profiled the data science executives behind streaming services ($ - paywalled)
* Netflix's new Tudum website marks a new push into the world of publishing by the streaming giant, also reflected in its Netflix Pause Substack.
* Snap handed out its LensFest Awards recipients for the best AR.
* The Federal Trade Commission has recently made it clear that it sees the practice of "click to subscribe, call to cancel" as 1) one of several “dark patterns that trick or trap consumers into subscriptions” and 2) straight-up illegal.
* Buzzfeed had a "bumpy" IPO which left former employees who believed in the company enough to buy options when they left unable to sell as the share price has dropped further and further south. Brian Morrissey wrote about BuzzFeed and digital media's next chapter in his Substack, The Rebooting