Image: Dune: Part Two, Warner Bros.
The entertainment media industry is never at a loss for juicy sub plots, industry gossip, and intriguing turnover – which makes my job a lot easier! In this week’s edition, we’re
exploring the bundling craze that has hit the streaming space, the movie studio best-suited to survive this ongoing painful contraction, the power of theatrical films and more. Shall we dive in?
1. Bundles on Bundles on Bundles– After years of direct-to-consumer driven unbundling, fragmentation, and segmentation, the entertainment media ecosystem is coupling up once more. We may look back at 2024 as streaming’s “mating season” as new bundles such as the sports-centric Venu (Warner Bros. Discovery, Fox, Disney), StreamSaver (Peacock, Netflix, Apple TV+) and the Max, Disney+, Hulu contingent are announced and or launched. (To say nothing of existing bundles such as SkyShowtime, Verizon’s Netflix and Max duo, Paramount+ & Walmart, or the multiple bundles offered within Disney’s streaming ecosystem).
Max, Disney+ and Hulu share less than 5% of small screen titles across their libraries, according to Parrot Analytics’ Content Panorama. There is minimal TV overlap between the three, providing distinct content collections. This provides consumers with a wide variety of differentiated programming. Yet the differentiated combo of HBO Max and Discovery+ did not lead to subscriber growth and consumers will still need separate apps to access the Disney+/Hulu and Max libraries.
From a strategic standpoint, it’s good that these three libraries have little in title overlap, but the bundle needs to have interest overlap to keep subscribers engaged long-term.
2. Universal Pictures Should be the Universal Strategy for Hollywood – Of the five major film studios left standing, Universal Pictures feels best prepared to survive the shockwaves of a contracting movie business. NBCU Studio Group Chairman and Chief Content Officer Donna Langley and her team deliver a demographically diverse slate of features. Tentpole budgets outside of recent Fast franchise films are largely kept in check. DreamWorks and Illumination combine for a steady stream of successful four-quadrant animated films. The micro budget theatrical Blumhouse features boast envy-inducing return on investment while arthouse banner Focus Features has delivered 16 Best Picture nominees at the Oscars. After making the controversial decision in summer 2020 to make the majority of its theatrical films available for digital rental and purchase between 17-31 days after release, it was revealed last June that the studio had generated $1B in PVOD revenue in less than three years. At the same time, the studio has ranked in the top three in domestic box office share in each of the last four years, including back-to-back No. 1 finishes in ‘22 and ‘23. Universal is also responsible for three of the 10 most in-demand movies released last year. The
theatrical experience can and should be preserved and prioritized. But the ever forward-thinking Universal proved that studios can experiment with windowing strategies – including a unique Pay One deal split between Peacock, Netflix and Amazon – without cannibalizing ticket sales and SVOD viewership. With a diverse slate rooted in quality and flexible distribution, the studio can survive this concerning movie metamorphosis.
3. Non-Exclusive Licensing Helped Anoint the Dune Franchise – WBD smartly aimed to maximize catch-up viewing of Dune: Part One ahead of the sequel’s release by licensing it to Netflix and Hulu while it was streaming on Max. This helped the IP leave a more significant footprint right as the sequel’s marketing campaign kicked into high gear. Global demand for Part One was 52% higher in the first two months of 2024—ahead of the sequel’s March 1 release—vs. the last two months of 2023. This helped Part Two earn $82.5 million in its opening weekend, the best theatrical debut of 2024 as of this writing. Global demand for Dune jumped another 47% in the first month of the sequel’s release compared to the month prior. Audiences were ping-ponging back-and-forth between both films; even 1984’s Dune saw a 162% spike in global demand in the first month of the sequel’s release. WBD’s effective non- exclusive licensing strategy not only helped Part Two breakout at the box office but bolstered the halo effect
between franchise entries.
4.WBD’s NBA Drama – Based on all accounts, it looks as if David Zaslav and Warner Bros. Discovery may not retain rights to air the NBA as Disney, Comcast’s NBCU and Amazon are reportedly in pole position for the A, B and C
packages, respectively. This would end a fruitful relationship between Turner Sports and the NBA that has existed for decades, though it would also leave WBD with roughly $2.5 billion per year to spend elsewhere. This would undoubtedly damage WBD’s leverage within the Venu Sports bundle alongside Disney and Fox as well as with cable providers over carriage fees. But it would also free up a lot of money to continue paying down debt and investing in strategic assets elsewhere. The UFC’s media rights are up for grabs next year, with Netflix potentially sniffing around. MMA is not as big as the NBA, but it does boast a younger and global audience that is used to being highly monetized (PPV fees in addition to subscriber fees). Wouldn’t be the worst pivot in the world for Zas and Co.
5. MENA Movie Breakdown – Over the last four quarters in Egypt, Saudi Arabia and the UAE across all platform types, the top suppliers of movies by country of origin are the US, India, Spain, the UK and France. Apple TV (16%), Netflix (11%), Google Play Movies (9%), Sun Nxt (8%) and Zee5 (6%) boast the largest library movies in that span. Movies are often a key acquisition driver for streaming services, particularly internationally. One high quality new theatrical film arriving on a service per month can help grow a customer base, especially when coupled with evergreen engagement driving TV series that consistently sit in the Top 10 for hours consumed. Movies offer a big bang but then don’t always often quality retention cohorts. But 10 quality big name films a year, in addition to
engagement driving shows and sports that drive intake and consumption hours/retention, is a real strategy in a
world of uncertainty.
6. Global TV Is Increasingly Digital – American consumers forget that linear TV is much healthier internationally than domestically. Yet that doesn’t mean the world is ignoring the streaming revolution. Nuuday-owned Danish service provider brand YouSee has expanded its distribution deal with WBD to incorporate Max, just launched in the Noridcs, and eight linear channels. Canal+ Group has launched TV+ in Franchise, bringing all of its live TV and replay offerings into one digital app. Austrian public service broadcaster ORF is launching a new streaming platform, ORF ON, which offers TV channels as live streams as well as on-demand content. The convergence of linear and digital can maximize reach and ideally create a conversion funnel between pay-TV customers and streaming.
7. LATAM Learnings – Latin America is a good market to learn from as evidenced by the concept testing major streaming services roll out in the region to gain experimental knowledge and the close parallels between its media market and the UCAN region’s. Globally and historically, the true crime genre (both scripted and unscripted), has over-indexed with female audiences and the 23-40+ demographic. At a worldwide level, the true crime documentary genre has become over-saturated, but in LATAM, audience demand for scripted true crime dramas (think Black Bird, Narcos or Dahmer) actually outweighs supply. The crime drama subgenre is also one of the most travel-able worldwide. Still, local true crime documentaries maintain powerful market-specific demand levels and networks such as Apple TV+, FX, ABC, Max and Globoplay see demand outstrip supply. Brazil, in particular, is a key market to focus
on within the LATAM region.
8. StreamSaver Reality Check– While we’re on the subject of bundles in this edition of Parrot Trends, let’s take a look at StreamSaver. This combination of Peacock Premium (ad-supported), Netflix Basic (ad-supported) and Apple TV+ (ad-free) will cost $15, a total that Comcast boasts will save consumers at least 35% versus buying each service individually. However, StreamSaver is only available to Comcast customers, and they already receive free access to Peacock Premium. So if you eliminate that cost and look at the $6.99/month Netflix Basic tier and the $9.99/month Apple TV+ subscription, your savings drop to under $2/month. The value is much better if you’re accessing the bundle through Comcast’s Now TV, but still not otherworldly. As of Q4 2023, Comcast had 14.1 million video subscribers, so StreamSaver looks to be an attempt to stave off broadband losses while Apple TV+ has the most to gain from an SVOD standpoint. Netflix is seemingly just trying to juice its slow-growing ad-tier.
One Fun Stat
• Taylor Sheridan’s six Paramount+ originals have combined to account for a peak demand share of 3.1% of the
streamer’s total TV library, which includes more than 1,000 TV series.
Five Key Reports to Check Out
