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   Technology StocksNetflix (NFLX) and the Streaming Wars

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From: Glenn Petersen7/9/2021 5:31:00 AM
   of 2085
Barry Diller Headed 2 Hollywood Studios. He Now Says The Movie Business Is Dead

David Gura
July 8, 20211:55 PM ET

Barry Diller made his name in the film industry as the chairman and CEO of two Hollywood studios, Paramount Pictures and what was then 20th Century Fox. Now, he is declaring the industry dead.

"The movie business is over," Diller said in an exclusive interview with NPR on the sidelines of the Allen & Company Sun Valley Conference, a media and technology conference in Idaho. "The movie business as before is finished and will never come back."

Yes, that has to do with a substantial decline in ticket sales and the closure of movie theaters during the coronavirus pandemic. But Diller, the chairman and senior executive of IAC, a company that owns Internet properties, said, "It is much more than that."

According to Diller, who ran Paramount and Fox several decades ago, streaming has altered the film industry in substantial ways, including the quality of movies now being made.

Last year, several media conglomerates, including Disney and WarnerMedia, decided to debut new releases in movie theaters and on streaming services simultaneously. That was a radical change, and theater chains protested it.

"There used to be a whole run-up," Diller said, remembering how much time, energy and money studios invested in distribution and publicity campaigns.

The goal, he said, was to generate sustained excitement and enthusiasm for new movies. "That's finished," he said.

The way companies measure success is also different, according to Diller.

"I used to be in the movie business where you made something really because you cared about it," he said, noting that popular reception mattered more than anything else.

During Diller's tenure at Paramount in the late 1970s and 1980s, the studio released movies like Saturday Night Fever. But since then, he has been known for his work in television. He helped create the Fox TV network, for example.

Now at IAC, he's more closely associated with internet ventures, including the Daily Beast.

Diller on how the quality of movies has suffered

Today, streaming is a multibillion-dollar industry, and competition among companies for content and customers is fierce. Diller pointed to Prime Video, Amazon's streaming service, as an example of how incentives in the entertainment business have changed. In May, the company announced plans to buy MGM for almost $8.5 billion.

"The system is not necessarily to please anybody," Diller said, suggesting Prime Video's primary purpose is to get more customers to sign up for Amazon Prime. "It is to buy more Amazon stuff. That's not a terrible thing. It just doesn't interest me."

During the pandemic, there has been a massive spike in on-demand video. In the first quarter of 2020, Netflix added 15.8 million new subscribers. Since then, its growth rate has slowed, but the company says it ended the year with more than 200 million customers.

Diller acknowledged the recent success of streaming services and how indispensable they became during the pandemic, but he was less complimentary of their expensive efforts to create more original content.

"These streaming services have been making something that they call 'movies,' " he said. "They ain't movies. They are some weird algorithmic process that has created things that last 100 minutes or so."

For Diller, this is about seismic change and nostalgia, but it is also about semantics. The definition of "movie," he said, "is in such transition that it doesn't mean anything right now."

Companies are trying to figure out what viewers want and how they want it. That has led to hits and misses.

Diller dishes on the spectacular failure of Quibi

Asked about Quibi, the now-defunct streaming platform founded by Jeffrey Katzenberg, the former chairman of Walt Disney Studios, Diller was unequivocal. "Quibi was just a bad idea," he said. "I mean, it's that simple."

The company raised $1.75 billion, and it spent most of that money commissioning content — short videos designed to be watched on smartphones.

In the months that followed its launch last year, Quibi failed to get any traction, and it ended its streaming service in December.

"It was a bad idea that had no testing ground other than a big-scale investment," Diller said. "Otherwise, it would have slithered around for a while. But it was such a big-scale thing that it lived and died in a millisecond."

In January, Quibi sold its assets — 75 shows and documentaries — to Roku, reportedly for less than $100 million.

"It has no relevance on anything," Diller said. "The idea of professional, A-quality 10-minutes-or-less stuff just made no sense."

Katzenberg was a Diller protégé — part of a group of people whom Diller mentored known as the Killer Dillers — and he is also in Idaho this week, participating in the Allen & Co. conference. Through a spokesperson, Katzenberg declined to comment.

Diller said he has "almost zero" interest in the movie business today. In recent months, he has turned his attention to producing plays on Broadway.

"I find that far more creative," he said.

Why Media Mogul Barry Diller Thinks The Movie Business Is Dead : NPR

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From: Glenn Petersen7/13/2021 1:39:41 PM
   of 2085
Inside Shonda Rhimes’ Second Netflix Pact: A “Significant” Raise and New Revenue Streams

Sources say the streaming giant wants to work directly with creators on live events that will, in success, provide new revenue streams as subscriber growth slows.

The Hollywood Reporter
JULY 12, 2021 6:00AM

Four years ago, when Shonda Rhimes left her longtime home at ABC and transformed the TV industry with a nine-figure overall deal with Netflix, the move was considered an effort by the streaming giant to own more of its pricey original content.

Now, after delivering blockbuster Bridgerton, Netflix’s second pact with Rhimes is seen as an effort to create new revenue streams from the Grey’s Anatomy creator’s New Regency franchise and whatever other hits may be emerge in the prolific producer’s content pipeline at the streamer.

The July 8 deal extension will keep Rhimes at the streamer for five more years. Sources say Rhimes scored a “significant” up-front raise from the $100 million to $150 million initial pact she inked in 2017. Rhimes again has multiple bonuses built in that, in success, could elevate its value to the $300 million to $400 million territory of fellow uber-producers Ryan Murphy and Greg Berlanti, per sources.

Although she had a year remaining on her initial deal and had no plans of making Netflix a pitstop in her career, sources say Rhimes and her camp at ICM Partners (as well as attorney Michael Gendler) began negotiating earlier this year after Bridgerton quickly became Netflix’s most watched original series ever. The streamer, which does not reveal traditional viewership data, says more than 82 million member accounts watched at least two minutes of the series starring Regé-Jean Page. The romance drama based on the books by Julia Quinn launched last Christmas and, in a sign of its value to Netflix, has already been renewed through its fourth season. A Rhimes-penned spinoff is also in the works.

The deals for Rhimes, Berlanti ( with Warner Bros. TV) and Murphy ( also at Netflix) are all structured differently. Rhimes, as she did four years ago, bet on herself with bonuses built in that further compensate her for the number of shows she gets on the air, how long they each run and more. Berlanti’s 2018 deal extension saw the studio buy out the backend of The CW’s DC Comics shows like Arrow to net him a $400 million up-front payday, meaning he no longer has ownership points on specific shows. That deal also is loaded with incentives that see Berlanti — with a record 17 scripted shows on the air — score additional cash clauses when he hits a specific number of series. (Berlanti, who will be with Warners through 2024, also recently inked a separate film deal with Netflix.) It’s worth pointing out that Kenya Barris’ recent ViacomCBS deal gives him a seat at the table with a 33 percent equity stake in BET Studios after the Black-ish creator wasn’t interested in doing broadly commercial fare for Netflix, where he had a few years remaining on his own nine-figure deal.

While Berlanti has separate film and TV pacts, Rhimes’ new deal includes film, games, VR, branding and merchandising, live events and experiences. Although Rhimes started her career in features, sources close to the Scandal creator note it’s the merchandising and live events and experiences that are of particular interest to Netflix as the streamer plots other revenue opportunities to help offset its slowed subscriber growth. Netflix reported 208 million subscribers in the first quarter, missing its own expectations of 210 million.

The plan, sources say, is for Netflix to build on its hit franchises — like the immersive Stranger Things: The Experience in L.A and New York — with additional live events including the upcoming London-set Bridgerton ball scheduled to launch in November. Such events are done in participation with Netflix and the series creators, who help deliver the authenticity that can justify the pricey ticket fees. A Bridgerton video game and, after Netflix’s virtual Witcher Con on July 9, a Bridgerton fan convention could be on the table, too. Such events will also help keep fans engaged in the long stretches between seasons of the streamer’s hit shows. (Stranger Things, for example, last aired in July 2019 with the drive-through event providing diehard fans and franchise newcomers a fun opportunity during the height of the pandemic stateside.)

“Netflix is nascently exploring all this stuff and they understand that growing in areas that are non-competitive but additive on multiple levels — there’s revenue in marketing and creating shows/movies and events — is good for everybody,” notes one source familiar with the streamer’s strategy. “They’re going to spend time and money figuring that out. And they want to do that in partnership with great creators who have an acute understanding of these worlds.”

Meanwhile, all eyes now turn to Murphy, who while delivering a steady stream of content for Netflix, has yet to create the Bridgerton-like breakout under his $300 million deal. “Netflix wishes that Ryan did stuff that felt more special,” says one agency source. “He makes noise but none of the shows are sticky.” Meanwhile, industry insiders are already speculating if Netflix and Murphy will extend their relationship or if the Glee creator will reunite with Disney and his longtime friend and collaborator, Dana Walden — for whom he still has sticky successes in American Crime Story and American Horror Story. “He’s got a plan,” says another top lit source. “He’s shrewd.”

Shonda Rhimes’ Netflix Pact: “Significant” Raise, New Revenue Streams – The Hollywood Reporter

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From: Glenn Petersen7/16/2021 5:54:16 AM
   of 2085
Netflix’s Videogame Gambit Is Taking Shape as Streaming Competition Grows

The company has hired a Facebook executive to oversee a new unit dedicated to making games

By Sarah E. Needleman and Joe Flint
Wall Street Journal
July 15, 2021 3:06 pm ET

Netflix has had modest success in mobile gaming through a licensing deal with studio BonusXP for ‘Stranger Things 3: The Game.’ PHOTO: BONUSXP/DPA/REUTERS

Netflix Inc. NFLX -0.91% co-founder Reed Hastings has often said he sees videogames as the streaming company’s biggest competitor for customers.

Now, he wants Netflix to make its own videogames, and the company has tapped an industry veteran to oversee its strategy.

The move speaks to Netflix’s desire to attract new customers and keep users on its platform for longer periods, and it comes as the company is facing its first serious challenges to its streaming business. New entrants, including Walt Disney Co. DIS 0.40% ’s Disney+ and WarnerMedia’s HBO Max, are making inroads, and deep-pocketed rivals such as Apple Inc. AAPL -0.45% and Inc. AMZN -1.37% are spending aggressively on content as well.

Netflix is still the dominant streaming service with more than 200 million subscribers world-wide, but its growth has slowed this year as pandemic-related shutdowns end. Investors have been watching closely to see if Netflix will diversify its revenue sources beyond subscriptions to support its increasing content budget.

Videogames could be a lucrative solution. Global consumer spending on game software is projected to reach $175.8 billion this year and exceed $200 billion by 2023, according to Newzoo BV. Mobile games—the kind Netflix is expected to focus on—are on track to make up roughly half of this year’s haul.

Success is far from guaranteed, analysts say, as larger incumbents have at times struggled in mobile gaming and it can be a challenge finding the right content that lends itself to becoming a videogame.

Netflix’s videogaming strategy is still a work in progress, according to people familiar with the company’s thinking. The immediate focus will be on making mobile games, these people said, and they won’t include advertising, as is the case with Netflix’s entertainment operations.

Netflix is planning to make the videogames available to play in its app without an additional fee, one of the people said. The company didn’t comment on whether users would also be able to download those games.

“They’ll probably lower their churn,” said Benchmark analyst Mike Hickey. “You can burn through a TV series in a day, but you can constantly engage with a game for months to years.”

Netflix has hired Mike Verdu, seen in 2015, as vice president of game development. PHOTO: GLENN KOENIG/LOS ANGELES TIMES/GETTY IMAGES
The company this week said it hired Facebook Inc. FB -0.91% executive Mike Verdu as vice president of game development. Mr. Verdu joined Facebook in May 2019 and was responsible for bringing games and other content to the company’s Oculus-branded virtual-reality headsets.

Bloomberg first reported the hire of Mr. Verdu, who has also worked at Electronic Arts Inc. EA -0.32% and Zynga Inc. ZNGA -2.37%

At Netflix, Mr. Verdu will work alongside other executives with game-industry experience, such as board member Ann Mather, who spent more than 15 years as a director for “Kim Kardashian: Hollywood” maker Glu Mobile, a company recently acquired by Electronic Arts.

Jessica Neal, before being named Netflix’s talent chief in 2017, worked as chief people officer at mobile gaming company Scopely Inc. And Netflix finance chief Spencer Neumann, who joined the company in 2019, was poached from Activision Blizzard Inc., ATVI -1.78% one of the world’s largest videogame companies. Activision Blizzard is suing Netflix over the matter. Netflix declined to comment on the lawsuit Thursday.

Netflix has increasingly signaled interest in the videogame industry. The company’s recent deals with creative talent including “Bridgerton’’ producer Shonda Rhimes feature language regarding the creation of videogames based on content.

Netflix recently struck a deal with Shonda Rhimes that would expand their relationship beyond television into film, gaming and other areas. PHOTO: NINA PROMMER/SHUTTERSTOCK
In April, Chief Operating Officer Greg Peters said games are “going to be an important part” of the Netflix experience going forward. “We’re trying to figure out what are all these different ways that we can increase those points of connection, we can deepen that fandom,” he said on an earnings conference call.

Netflix has had modest success in mobile gaming through a licensing deal with the Texas studio BonusXP Inc. Its $4.99 title, “Stranger Things 3: The Game,” is based on a popular Netflix property and has amassed about $315,000 in consumer spending in Apple’s and Google’s app stores since launching in August 2019, data from Sensor Tower Inc. show.

That game, however, isn’t streamed online or housed within Netflix’s mobile app. It is available for download only. For Netflix to stream multiple games from inside its mobile app on iPhones and iPads, it would need approval from App Store operator Apple, which has previously rejected efforts by Microsoft Corp. MSFT -0.52% and Facebook to go down the same path.

Mobile games are typically less costly and complex to develop than console and computer games. They also tend to be slower paced, making them easier to stream over the internet without delays. As their name implies, they are designed for playing on the go, as opposed to over a TV screen, though that appears poised to change. Microsoft recently said it is working with TV manufacturers to bake its Xbox Game Pass service into sets, which would enable users to stream games without a console.

The market is competitive, however, and even large industry players such as Electronic Arts, Take-Two Interactive Software Inc. TTWO -2.12% and Ubisoft Entertainment SA have all struggled to stand out.

Other major movie and TV-show makers have tried breaking into videogame development, but those efforts didn’t last. Disney abandoned its game studios a few years ago, as did Viacom more than a decade ago.
‘Do you want to play ‘Bridgerton’ the game?’ — Wedbush Securities analyst Michael Pachter
More recently tech giants such as Microsoft, Google, Facebook and Amazon have launched services that support the streaming of videogames over the internet.

The top 100 grossing mobile games in the U.S. last year made up more than half, or roughly 64%, of all player spending on such titles, according to Sensor Tower. Ten were based on TV shows or movies, an indication that the genre is popular. Netflix could lean on more of its own properties to develop games, but some analysts say it has few that would lend themselves to interactive experiences.

“Do you want to play ‘Bridgerton’ the game?” said Wedbush Securities analyst Michael Pachter, a longtime critic of Netflix. “They’re going to fail miserably.”

Mr. Pachter said his bearish stance also speaks to difficulties he expects Netflix to face in convincing people to play games through its TV app, where most users go to watch its selection of movies and shows. Consumers will need a game controller that can interact with all the major TV brands and connect to the internet, he said.

Still, there are potential upsides for Netflix moving deeper into videogames. Striking deals for games with third parties—similar to its plan with “Stranger Things”—would put less financial pressure on Netflix to quickly bulk up its library with original content, according to Mr. Hickey. “The biggest cost to game development is head count,” he said.

Write to Sarah E. Needleman at and Joe Flint at

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the July 16, 2021, print edition as 'Netflix Takes Aim at Gaming.'

Netflix’s Videogame Gambit Is Taking Shape as Streaming Competition Grows - WSJ

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From: Glenn Petersen7/20/2021 5:53:38 PM
2 Recommendations   of 2085
Netflix beats on paid subscriber growth, but misses earnings expectations

Jessica Bursztynsky @JBURSZ


-- Netflix reported earnings that missed on the bottom line.

-- The company’s revenue and global paid net subscriber additions beat estimates.

-- The streaming giant also confirmed it was expanding into gaming.

Shares of Netflix recovered from an initial dip and were flat after the bell Tuesday after the company reported earnings that missed on the bottom line. The company’s revenue slightly beat estimates, and it confirmed speculation that it will expand more into gaming.

Here’s what the company reported versus expecations:

Earnings per share (EPS): $2.97 vs $3.16 expected, according to Refinitiv survey of analysts

Revenue: $7.34 billion vs $7.32 billion expected, according to Refinitiv

Global paid net subscriber additions: 1.54 million vs 1.19 million expected, according to Street Account

Analysts hadn’t been expecting a blockbuster quarter when it comes to subscriber adds, expecting 1.19 million users according to Street Account. The company said it added 1.54 million users to finish the quarter with over 209 million paid memberships.

“COVID has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through. We continue to focus on improving our service for our members and bringing them the best stories from around the world,” the company said in a letter to investors.

Netflix said its revenue growth this past quarter came from an 11% increase in average paid streaming memberships and 8% growth in average revenue per membership.

Most eyes were on what Netflix anticipates for its third quarter. Netflix said it expects 3.5 million net adds, while investors had anticipated 5.46 million net subscriber additions in the third quarter, according to Street Account data. Much of the optimism comes from Netflix’s upcoming slate of content, as a large amount had been pushed back into the second half of this year and next year.

In the first half of this year, Netflix said it has spent $8 billion in cash on content and expects content amortization to be around $12 billion for the full year.

“If we achieve our forecast, we will have added more than 54m paid net adds over the past 24 months or 27m on an annualized basis over that time period, which is consistent with our pre-COVID annual rate of net additions,” the company said.

The company confirmed it was pushing into the gaming space, as well. Netflix said it views gaming as a new content category, comparing it to its expansion into original films, animation and unscripted TV.

Potential games will be included in Netflix subscriptions at no additional cost, the company said. Initially, the focus will be on mobile games.

“We’re excited as ever about our movies and TV series offering and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games,” the company said.

The company recently hired video-game executive Mike Verdu from Facebook, where he was vice president of augmented reality and virtual reality content, as the company makes a deeper push into gaming.

Netflix is also facing pressure from tough year-over-year comparisons, since last year consumers were in the midst of the Covid-19 pandemic and spent much more of their time online and in need of entertainment.

Netflix said that in its second quarter, its engagement per member household was down compared to last year, but was still up 17% compared with the second quarter of 2019.

“The pandemic has created unusual choppiness in our growth and distorts year-over-year comparisons as acquisition and engagement per member household spiked in the early months of COVID,” the company reported.

This story is developing. Please refresh for updates.

Netflix (NFLX) Q2 2021 earnings (

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To: Glenn Petersen who wrote (2051)7/20/2021 11:52:03 PM
From: Sr K
1 Recommendation   of 2085
Thinking the WSJ version (excerpt) may be more numeric or different, here it is

Netflix Signals No Acquisition Plans as It Adds 1.5 Million Subscribers

Streaming giant’s U.S. member base shrinks even as it beats global growth forecast, says it sees no ‘must-have’ assets despite rival deal-making

Ralph Macchio and Martin Kove in a scene from the series ‘Cobra Kai.’PHOTO: CURTIS BONDS BAKER/NETFLIX/EVERETT COLLECTION

Joe Flint

Updated July 20, 2021 7:08 pm ET

Netflix Inc. is staying out of the arms race.

The streaming giant told investors Tuesday that while its competition is growing and rivals are combining to create more formidable entertainment platforms, it sees no need to get bigger to compete.

“We don’t view any assets as ‘must-have’ and we haven’t yet found any large scale ones to be sufficiently compelling to act upon,” Netflix said in its second-quarter letter to shareholders.

The company said that the potential of streaming is driving the deal-making but that it doesn’t believe the media consolidation of the past several years has affected its growth.

“We are mostly competing with ourselves to improve our service as fast as we can. If we do that, we’re confident we can maintain our strong position and continue to grow nicely as we have been for the past two-plus decades.” Netflix said.


This is full

Netflix Signals No Acquisition Plans as It Adds 1.5 Million Subscribers

Streaming giant’s U.S. member base shrinks even as it beats global growth forecast, says it sees no ‘must-have’ assets despite rival deal-making

Ralph Macchio and Martin Kove in a scene from the series ‘Cobra Kai.’PHOTO: CURTIS BONDS BAKER/NETFLIX/EVERETT COLLECTION

Joe Flint

Updated July 20, 2021 7:08 pm ET

Netflix Inc. NFLX -0.23% is staying out of the arms race.

The streaming giant told investors Tuesday that while its competition is growing and rivals are combining to create more formidable entertainment platforms, it sees no need to get bigger to compete.

“We don’t view any assets as ‘must-have’ and we haven’t yet found any large scale ones to be sufficiently compelling to act upon,” Netflix said in its second-quarter letter to shareholders.

The company said that the potential of streaming is driving the deal-making but that it doesn’t believe the media consolidation of the past several years has affected its growth.

“We are mostly competing with ourselves to improve our service as fast as we can. If we do that, we’re confident we can maintain our strong position and continue to grow nicely as we have been for the past two-plus decades.” Netflix said.

Netflix’s declaration came as the company said it added 1.5 million memberships in the second quarter as the streaming giant continues to see slower growth in new subscribers following a surge last year at the height of the Covid-19 pandemic.

Netflix said the pandemic had created what it called “lumpiness” in its membership growth, referring to higher growth last year and slower growth this year. The company said it has 209.2 million subscribers world-wide. Shares were flat in after-hours trading.

The global leader in streaming’s approach to acquisitions is the opposite of the rest of the entertainment industry, which is in a frantic phase of deal-making in the hopes of assembling content giants that can be formidable rivals to Netflix.

In May, AT&T Inc. and Discovery Inc. agreed to combine their media operations into a new stand-alone company whose assets will include HBO Max, CNN, Discovery+ and the Warner Bros. movie and TV studios. Last month, Inc. struck a deal to acquire MGM for $6.5 billion in the hopes of using the famed movie and TV studio’s library and intellectual property to bolster its Prime Video streaming service.

The deal-making might not be finished. Comcast Corp. , parent of NBCUniversal and ViacomCBS Inc. have discussed creating a streaming partnership for international markets, according to people familiar with the matter.

While Netflix is steering clear of deals, it is looking to expand into new businesses, particularly gaming. Last week, the company hired Facebook executive Mike Verdu as vice president of game development. The company said it would focus on games for mobile devices and would likely rely on Netflix shows and movies for content. Games will be included at no extra cost to Netflix members.

“We think the time is right to learn more about how our members value games,” the company said in its shareholder letter.

Netflix Chairman and Co-Chief Executive Reed Hastings said on the company’s investor video Tuesday that games and other ancillary businesses that the company is exploring, such as retail, aren’t meant to be new profit centers or to take away from its content operations.

“We’re a one-product company with a bunch of supporting elements,” Mr. Hastings said.

Netflix’s addition of 1.5 million subscribers for the three-month period ending June 30 exceeded its earlier forecast of an additional one million memberships. It added 10 million in the second quarter a year earlier, when much of the world was in lockdown mode.

Total revenue at the Los Gatos Calif.-based company rose to $7.34 billion, compared with $6.15 billion a year earlier. Wall Street had expected $7.32 billion, according to FactSet.

Profit at Netflix increased to $1.35 billion, or $2.97 a share. A year earlier, earnings were $720 million, or $1.59 a share. Earnings missed estimates for GAAP earnings of $3.18 a share.

The Asia Pacific region was the company’s strongest in terms of new members, responsible for nearly 70% of the 1.5 million added subscribers. In the U.S. and Canada, the streaming giant lost 400,000 subscribers—the first time it has done so in those markets since the second quarter of 2019.

Engagement among Netflix subscribers was also down for the quarter compared with the same period a year ago. However, that metric was up 17% compared with the second quarter of 2019.

Netflix is anticipating a stronger third quarter as media-production delays ease and more fresh content is available. The company said it is forecasting paid net additions of 3.5 million, compared with 2.2 million in the third quarter of 2020.

The pandemic continued to hamper Netflix’s lineup of original content for the quarter, but the company said it expects to have a strong slate for the rest of the year.

—Allison Prang contributed to this article.

Write to Joe Flint at

Corrections & Amplifications
In May, AT&T Inc. and Discovery Inc. agreed to combine their media operations into a new stand-alone company. An earlier version of this article incorrectly identified Discovery Inc. as Discovery Communications Inc. (Corrected on July 20, 2021.)

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From: Glenn Petersen7/21/2021 4:15:33 AM
1 Recommendation   of 2085
Potential consolidation:

Comcast and ViacomCBS face prisoner’s dilemma as they consider ways to work together

Alex Sherman @SHERMAN4949


-- Comcast and ViacomCBS are exploring ways to work together as they try to bolster their streaming services.

-- mA merger of NBCUniversal and ViacomCBS would have several obstacles, including potential divestitures and structure.

-- Both companies may decide to wait to try to merge with Warner Bros. Discovery.

The prisoner’s dilemma is a standard game theory situation often taught in business school. Comcast Chief Executive Brian Roberts and ViacomCBS chairman Shari Redstone are living it in real-time as they consider working together.

Comcast’s NBCUniversal and ViacomCBS are struggling to keep up with the biggest players in streaming video.

While Netflix, Amazon and Disney all have more than 100 million subscribers to their flagship video services, NBCUniversal’s Peacock has 42 million U.S. signups — most of which don’t pay for the service — and ViacomCBS’s Paramount+ has fewer than 36 million subscribers. ViacomCBS doesn’t reveal the specific amount of paying Paramount+ customers, but it said earlier this year it had 36 million total streaming subscribers, including Showtime and other niche products.

AT&T’s WarnerMedia and Discovery also have subscale streaming products. They announced plans to merge earlier this year. That left NBCUniversal and ViacomCBS as the largest leftover streaming players.

Roberts and Redstone have held conversations to explore ways the companies can work together, according to people familiar with the matter. Investment bankers are pumping both companies with ideas in hopes of getting what might be the last large traditional media merger fee for quite some time, said the people, who asked not to be named because the discussions are private. Spokespeople for Comcast, Redstone’s private National Amusements and ViacomCBS declined to comment.

One of the options under consideration is to bundle Peacock and Paramount+ together in international markets, as The Information reported earlier this year. Both companies are planning global expansions, and partnering is relatively frictionless.

Another option is a merger or acquisition, but there are numerous complications on that path. Neither ViacomCBS nor NBCUniversal are actively seeking a merger at this time, according to people familiar with the matter.

While there may be no rush to merge, both companies will ultimately need more scale to compete against larger players. They could partner or merge, or they could attempt to merge with Warner Bros. Discovery when/if that deal closes in the middle of 2022. A merger with Warner Bros. Discovery may be a cleaner fit for either ViacomCBS or NBCUniversal.

But only one of the two could join Warner Bros. Discovery. That would leave the other company out in the cold — possibly for years.

That’s the essence of the prisoner’s dilemma.

Working together may ensure both companies are better off than they started, but holding out against each other may be the best-case scenario for one company and the worst-case scenario for the other. (This isn’t a perfect prisoner’s dilemma example because the companies can’t really betray each other, ending up in a situation where both are worse off).

Merger issues

Regulators probably wouldn’t allow a combined NBCUniversal-ViacomCBS to own both broadcast stations NBC and CBS. It’s likely any merger will have to include a divestiture of one of the broadcast networks along with all local NBC or CBS television affiliates that overlap in the same markets.

That immediately diminishes the value of both companies. If CBS is divested, NBCUniversal would get Paramount+ without CBS programming, including live National Football League games and NCAA’s March Madness. If the companies decide to divest NBC, ViacomCBS wouldn’t get “Sunday Night Football” and other popular NBC broadcast shows.

While it’s possible the companies could attempt to argue broadcast networks are like cable networks and don’t need separate ownership, regulators may not view that as a reasonable argument. About 40% of Americans own a digital antenna to get free over-the-air programming along with streaming video, according to Horowitz Research. Broadcast networks have historically battled each other for valuable programming. Putting two under one roof would stifle those competitive bidding situations.

The second obstacle is structure. Comcast could simply acquire ViacomCBS, buying out Redstone’s voting shares in a deal. But ViacomCBS has an enterprise value of about $40 billion and would ask for a decent-size premium to sell, two of the people said. Even with major divestitures, a deal would be pricey.

Shari Redstone, president of National Amusements and Vice Chairman, CBS and Viacom, speaks at the WSJTECH live conference in Laguna Beach, California, October 21, 2019.
Mike Blake | Reuters

Comcast shareholders, who MoffettNathanson analyst Craig Moffett said are more likely to cheer a separation between NBCUniversal and Comcast, may not like a decision to buy ViacomCBS and divest one of the networks.

Roberts could spin out NBCUniversal and merge with it ViacomCBS — similar to the WarnerMedia-Discovery deal. That might require him to give up control of NBCUniversal. If Redstone ends up owning more economic control of a merged NBCUniversal-ViacomCBS, she may want to run the company or choose who’s in charge, for at least a number of years. Roberts and Redstone would have to reach an agreement on economic and voting control if this option is pursued.

A bundled offering through a commercial partnership skirts the merger and acquisition issues — and is ultimately the most likely “step one” scenario — but it gives less flexibility to the companies on offerings than a merger would. It also might not move the needle enough for either firm.

Wait for Warner Bros. Discovery

Either NBCUniversal or ViacomCBS could theoretically fit with Warner Bros. Discovery because David Zaslav’s future company won’t own a broadcast network. That would eliminate the need for divestiture. Combining with HBO Max and Discovery+ would also arguably be a more robust streaming offering, in terms of content, than simply pushing together the assets of NBCUniversal and ViacomCBS.

But the size of Warner Bros. Discovery combined with either ViacomCBS or NBCUniversal could pose regulatory issues, depending on how Biden administration regulators view the entertainment market. Even WarnerMedia’s deal with Discovery isn’t assured approval.

A choice to hold for a deal with Warner Bros. Discovery forces both NBCUniversal and ViacomCBS to wait two or three more years, given the length of time it would take to merge to gain regulatory approval — first for WarnerMedia and Discovery and then for the second merger. There would also be integration costs and issues from two large deals happening so quickly.

For the company that didn’t merge with Warner Bros. Discovery, the likely path forward would be rolling up some of the smaller streaming players. like Lionsgate and AMC Networks, or pushing for an acquisition of Sony Pictures.

Merging or waiting both present headaches. This is why investment bankers get paid the big bucks.

Disclosure: NBCUniversal is the parent company of CNBC.

Comcast and ViacomCBS consider partnership to bolster streaming TV (

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From: Glenn Petersen7/29/2021 11:37:30 AM
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Peacock Reaches 54 Million Sign-Ups, Set to Begin International Rollout on Sky Platform

By Cynthia Littleton
July 28, 2021

NBCUniversal’s Peacock streamer will begin its international rollout this year as a free addition on Sky’s satellite TV platform in Europe, giving it a base of 20 million households.

Peacock has reached 54 million total signups since its debut in April 2020. It generated more than 20 million monthly active users for the quarter. The streamer’s most popular original series has been the drama “Dr. Death,” Comcast chairman-CEO Brian Roberts told Wall Street analysts Thursday on the company’s earnings call.

And at a time media merger activity is heating up, executives from Comcast sought to throw cold water on the notion that the Philadelphia entertainment giant might be looking to do a transformative new deal.

“We have all the parts,” Roberts said, to emphasize that Comcast doesn’t need to go shopping for assets to maintain its heft.

Executives suggested that Comcast has enough scale in the marketplace to operate going forward, even as rivals start to bulk up. AT&T is set to spin off WarnerMedia next year so that it can merge with Discovery and Amazon has made plans to acquire the MGM studio. Those moves have spurred speculation that Comcast, which has over the years grown by buying up cable assets formerly part of AT&T as well as NBCUnversal and Dreamworks Animation, might seek to join with a rival, such as the new Discovery/WarnerMedia combination or even ViacomCBS, even though some of those deals would trigger intense regulatory scrutiny, as a single company is barred by FCC rules from owning two national broadcast TV networks.

During the call, Roberts and NBCUniversal CEO Jeff Shell told investors that the company saw no pressing need to grow larger. “This company is well positioned, and I really feel that way,” said Roberts. Both suggested that Comcast and NBCU would be most interested in buying assets that help the company grow overseas.

The theme park businesses that were so hobbled by the coronavirus outbreak this time last year were a bright spot this time around. Shell enthused about the strong performance of the Universal Studios Orlando theme park for the quarter. He also noted that Universal’s theme park in Beijing is deep into the approvals process and is on track to open “in the next couple of months.”

As for Peacock, executives noted that the day-and-date debut of theatrical “Boss Baby 2” on Peacock and the Tokyo Olympics have also driven viewership and signups. Shell stressed that Comcast has the financial wherewithal to support Peacock.

“I don’t think we’ve ever lacked the capital to do what we need to do to grow our business,” Shell said. He pointed to the company’s recent $400 million deal for rights to “The Exorcist” novel, which NBCU intends to make into three feature films, two of which will premiere on Peacock. Shell said that deal was only possible because they have the Peacock platform to justify the investment, which he pointed to as another sign that Comcast has the juice to go it alone.

“We can achieve our success at Peaock without anything additional and I think this quarter proved it,” Shell said.

Peacock Reaches 54 Million Sign-Ups, Will Roll Out on Sky Platform - Variety

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From: Glenn Petersen8/6/2021 5:00:27 AM
1 Recommendation   of 2085
‘Bridgerton,’ ‘The Dig’ Most Popular as Netflix Makes Major Gains in U.K., Finds Ofcom Study

By Naman Ramachandran
August 4, 2021

Some 52% of U.K. households have a Netflix subscription and 29 of the top 30 shows on subscription services in the first quarter of 2021 were on the giant streamer, a study has found.

The Netflix customer base now exceeds that of U.K. pay-TV providers combined for the very first time.

“Media Nations 2021,” the annual study of British viewing habits by U.K. media regulator Ofcom, reveals that the four most popular programs in the country were U.K. produced – “ Bridgerton,” “The Dig,” “Behind her Eyes” and “Fate: The Wynx Saga.” “Bridgerton” in particular, was a resounding success, with 8.2 million homes watching by the end of March 2021, making it Netflix’s highest reaching title that quarter.

Overall, U.K. subscriptions to streaming services climbed by over 50% in 2020 to reach 31 million, up from 20 million in 2019, the study reveals. The main streaming services gathered an estimated £2.11 billion ($2.93 billion) in U.K. revenues during 2020 — a 28% increase in real terms on 2019’s £1.66 billion –- and more than double their £1.03 billion revenues in 2017.

The study also records that by April 2021, streaming service providers were offering U.K. viewers a combined total of over 115,000 hours of content. Amazon Prime video’s catalogue was the largest at over 41,000 hours, followed by Netflix at around 38,000. The combined content catalogues of All 4, BBC iPlayer, ITV Hub and My5 were short of this at 37,000 hours.

The gains made by streamers has led to an erosion in broadcast television viewership, the study notes. The average time spent watching traditional broadcast TV each day in 2020 was 3 hours 12 minutes – nine minutes higher than in 2019. However, this increase was entirely driven by people aged 45 and over.

Younger age groups continued to watch less broadcast TV in 2020, with people aged 16-24 spending only an hour and 17 minutes watching broadcast content – down from one hour and 21 minutes in 2019.

Overall, the net effect was a fall in broadcast TV’s share of all adults’ total viewing in 2020, from 67% in 2019 to 61%.

Live sport, drama and news continues to be an audience draw for broadcast TV, with the most-watched program so far this year being the Euro 2020 soccer championship final between England and Italy with a combined audience of over 22 million U.K. viewers on BBC One and ITV. The Euro 2020 semi-final between England and Denmark had the highest audience on a single channel with 18.3 million U.K. viewers on ITV.

BBC One’s “Line of Duty” series finale with 16.4 million U.K. viewers and ITV’s Oprah Winfrey interview with Meghan Markle and Prince Harry with 14.9 million U.K. viewers were also popular broadcast TV draws.

The study also found that in 2020, where many months were spent in lockdown, U.K. adults spent 2000 hours, or more than a third of waking hours, watching TV and online video content.

Yih-Choung Teh, Ofcom’s group director, strategy and research, said: “The pandemic undoubtedly turbo-charged viewing to streaming services, with three in five U.K. homes now signed up. But with subscriber growth slowing into 2021 and lockdown restrictions easing, the challenge for the likes of Netflix, Amazon and Disney will be to ensure a healthy pipeline of content and keep customers signed up.”

'Bridgerton' Most Popular as Netflix Makes Gains in U.K. - Variety

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To: Glenn Petersen who wrote (2055)8/11/2021 4:59:05 AM
From: Glenn Petersen
1 Recommendation   of 2085
the Streaming Wars, Sony Stands on the Sidelines

As competitors are ‘beating each other’s brains out,’ the only major studio that’s not a combatant is finding ways to profit

By R.T. Watson
Wall Street Journal
Aug. 7, 2021 12:00 am ET

In Hollywood’s streaming wars, the only major studio that doesn’t have its own service might also be the biggest arms dealer on the battlefield.

Like its rivals, Sony SONY -1.71% Pictures Entertainment is bullish about the long-term prospects of the streaming business. Unlike the others, however, Sony’s management is betting on a strategy that involves selling films to longtime rivals that are spending billions of dollars to bulk up the offerings on their platforms.

Simultaneously, without its own large-scale streaming service, the Sony movie studio—owned by Sony Group Corp. —is gambling more heavily than its competitors on the return of moviegoing. Sony executives describe their commitment to theaters as part of a strategy for attracting talent and for securing high prices when they sell movies to streaming services, which often pay based on box-office revenue.

Rather than going head-to-head with Walt Disney Co. , Warner Bros., Universal Pictures and Paramount Pictures—all of which are trying to use movies they have produced to attract consumers to their own streaming services—Sony says it hopes it can play those counterparts against one another.

“None of them can deal with each other, but all of them can deal with us,” said Tom Rothman, chairman and chief executive of Sony Pictures Entertainment’s Motion Picture Group, adding that his company’s future will be well served by selling to rivals. “It’s certainly been a zigging-where-everyone-zags strategy. It’s proved very lucrative for us.”

Sony’s rivals believe their multibillion-dollar investments in streaming services will pay off in lasting ways. The growth prospects for Disney’s flagship Disney+, for instance, have propelled the company to the kind of stock-market valuation typically associated with the tech sector.

Sony’s handful of successful franchises in recent years has included a Jumanji reboot and its sequel. PHOTO: FRANK MASI/COLUMBIA PICTURES/EVERETT COLLECTION

Sony recently closed a pair of big deals, boosted by competitive bidding, to provide movies to the streaming services run by Netflix Inc. and Disney. Sony titles released over five years starting in 2022—including new Spider-Man films—will become available on Netflix after their theatrical runs, the companies said. Sony also agreed to give Netflix a first-look option to pick up movies the studio is making specifically for streaming platforms. Following their run on Netflix, according to a person familiar with the matter, Sony’s theatrical releases will then head to Disney which will be able to show them on its various distribution channels, including Disney+.

The Netflix and Disney deals, combined, are worth close to $3 billion over several years, according to a person familiar with the terms of the deal.

Sony continues to strike deals to make TV series that will run on various streaming services, including HBO Max and Netflix.

Sony was an early entrant in the streaming wars, launching the Crackle service the same year Netflix started its online offering. But the service didn’t become a serious contender, as Sony never made a massive investment in content. After Crackle struggled to attract top-tier programming or serious subscriber numbers, Sony sold control of the service in 2019 to Chicken Soup for the Soul Entertainment. It maintains some niche streaming offerings, including Funimation.

As streaming services proliferate and seek to stand out from the crowd, entertainment companies are spending unprecedented sums on making new content. Inc. recently agreed to pay $6.5 billion for the nearly 100-year-old MGM film and TV studio, which is expected to provide programming for the company’s Prime Video service. Actor and producer Reese Witherspoon’s production company, Hello Sunshine, sold for about $900 million. Her company adapts books into films and series like HBO’s award-winning “Big Little Lies.”

The upcoming ‘Venom: Let There Be Carnage’ is part of the studio’s plan to expand the Spider-Man series. PHOTO: MARVEL/ SONY PICTURES/EVERETT

Mr. Rothman, who recently extended his contract after six years on the job, argues that his company’s lack of its own streaming service could be an asset rather than a liability.

“It did become clear at a certain point that many companies were going to lose many billions of dollars beating each other’s brains out,” says Mr. Rothman.

Sony has often ranked last or second-to-last in box-office revenue among its peer group since 2013. But it nonetheless boasts an extensive library of hit movies and television shows, including Spider-Man, its most valuable franchise.

MoffettNathanson analyst Michael Nathanson believes Sony may have a competitive advantage not being pressured to sell movies to itself. “Talent will always question whether or not the internal transfer price was the right price,” he said.

The streaming push has already alienated some talent. Scarlett Johansson sued Disney last month for breach of contract, alleging that the company’s decision to release “Black Widow” simultaneously online and in theaters ate into her pay, which was partially tied to box-office revenue.

The risk for Sony, according to Mr. Nathanson, is that competitors might accumulate big enough war chests from subscription revenue that they could outspend the studio on entertainment production. That, in turn, could hamper Sony’s ability to attract high-profile projects and talent and potentially lead to a downward spiral.

Many in Hollywood predict that Sony’s recent round of deal making should provide sufficient capital to test its strategy for at least four years.

After that it is uncertain if Sony will be generating enough high-profile movies to secure lucrative licensing deals or have enough capital to pay the talent that drives success for most films at the box office.

Mr. Rothman, Will Smith, Martin Lawrence and fellow Sony Pictures executive Tony Vinciquerra, left to right, at the premiere last year of ‘Bad Boys For Life.’ PHOTO: KEVIN WINTER/GETTY IMAGES

The company’s chairman of distribution and networks, Keith Le Goy, says the studio’s lack of ties to any particular streaming service should also help it get the best prices for its movies and TV shows.

Sony’s sell-to-the-highest-bidder strategy is reminiscent of smaller production companies, like Ms. Witherspoon’s, that can take advantage of the current seller’s market for entertainment content.

“Our independence allows us every time to find the right home for any story, rather than being confined to the walled garden of our corporate siblings,” Mr. Le Goy said.

During Mr. Rothman’s tenure, the studio has released two Spider-Man films: “Spider-Man: Homecoming,” which grossed $880.2 million world-wide in 2017, and 2019’s “Spider-Man: Far From Home,” which made $1.13 billion. Another installment is slated for later this year.

Sony is trying to extend the franchise by plucking characters from the Spider-Man comics for villain-centered spinoffs such as “Venom: Let There Be Carnage” and “Morbius,” scheduled for releases this year and next, respectively.

Not all Sony’s franchise films have yielded box-office glory. The latest Men in Black and Charlie’s Angels films both underperformed in 2019. Sony racked up wins with two family-friendly Jumanji films and “Bad Boys for Life,” the Martin Lawrence-Will Smith reboot that was last year’s highest-grossing film in the U.S. and Canada.

Mr. Rothman argues that at its core, Hollywood is still primarily about producing entertainment that connects with consumers—whether on streaming services or in theaters.

“What I try to focus on is: ‘What is it people want to watch?’ ” he says. “That’s what’s going to matter.”

Write to R.T. Watson at

Corrections & Amplifications
Tom Rothman is chairman and chief executive of Sony Pictures Entertainment’s Motion Picture Group. An earlier version of this article incorrectly said he was chairman and chief executive of Sony Pictures Entertainment. (Corrected on Aug. 7)

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the August 7, 2021, print edition as 'The Switzerland Of Streaming.'

In the Streaming Wars, Sony Stands on the Sidelines - WSJ

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From: Glenn Petersen8/13/2021 3:58:44 AM
1 Recommendation   of 2085
Disney+ doubles subscriber base to 116 million in fiscal third quarter after release of Marvel’s ‘Loki’

Samantha Subin @SAMANTHA_SUBIN


-- Disney+ reached 116 million subscribers in the fiscal third quarter, beating analysts’ estimates by nearly 1.5 million.

-- That’s up from 57.5 million a year earlier.

-- The company also reported 174 million subscriptions across Disney+, ESPN+ and Hulu.

Disney+ reeled in new subscribers in the fiscal third quarter as consumers signed up to watch Marvel’s “Loki” and Pixar’s “Luca.”

Disney said in its earnings report on Thursday that subscribers to Disney+ doubled to 116 million subscribers from 57.5 million a year earlier. The results beat analysts’ average estimates by nearly 1.5 million, according to StreetAccount.

Across Disney+, ESPN+ and Hulu, Disney reported a total of 174 million subscribers. Disney also beat estimates on earnings and revenue, boosting the stock by about 6% in after-hours trading.

Analysts remain optimistic that Disney+ will reach its goal of 230 million to 260 million subscribers by 2024, as the company continues to roll out exclusive content. Consumers, however, are on average paying less. The average monthly revenue per paid subscriber for Disney+ fell to $4.16 from $4.62 a year earlier.

Among the most recent releases from Disney+ are the mini-series “The Falcon and the Winter Soldier,” based on Marvel Comics characters, and “Loki,” another Marvel-based series. The Pixar feature film “Luca” came out in June.

While the service is growing rapidly, it also faces a legal battle with “Black Widow” star Scarlett Johansson, who is suing the company for releasing the film simultaneously on the streaming platforms and in theaters.

Disney+ reaches 116 million subscribers after 'Loki' release (

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