Take Five (The Big Five Stories and Data You Need To Know)

Spotify, price hike: Pricing is streaming’s big problem. With premium revenue growth set to slow and ARPU declining due to family plans, discounts, bundles etc., the business needs another way to drive revenue. Unlike video, where pricing has increased above inflation, music has stayed at $9.99 so has deflated in real terms. On the case, Spotify is reported to be experimenting with increasing family plan pricing by 13% in Nordic markets. An encouraging move, but falls short of what is needed.

Viacom and CBS, old flames: Back in 1999 Viacom and CBS merged in a deal valued at $35.6 billion. Things didn’t work out and the companies parted ways in 2005. Now, 20 years on, they’re at it again. This time CBS is buying Viacom in an all-stock deal valued at $28 billion that would consolidate 22% of US TV audience share. It is a very different move from 1999, when the deal saw the companies on the offensive. This is a defensive move against digital disruption. As Disney and Fox have shown, media companies need to be really big to take on tech companies. Expect more media company strategic mergers and acquisitions over the coming years.

Twitch, user revolt: Amazon’s games video streaming platform Twitch finds itself in an awkward spat with top Fortnite gamer Ninja. Twitch promoted other channels on Ninja’s channel, including inadvertently promoting porn. Ninja promptly left Twitch, lured by Microsoft’s deep pockets to switch allegiance to Mixer. Ironically, the big-pay-for-smaller-audience move is similar to the Top Gear presenters’ switch from the BBC to Amazon. Now Amazon knows how it feels. Before it happens again, it needs to decide whether streamers own their own channels – or whether it does.

Tencent, bleeding edge: Though the impending 30X EBITDA purchase of 10% of UMG has got the world’s attention right now, music has always been something of a side bet for Tencent. Games are more central to Tencent’s strategy. Still smarting from the Chinese authorities suddenly playing regulatory hardball on its domestic games business, Tencent is finding its stride again, including a partnership with chipmaker Qualcomm to innovate on the ‘bleeding edge’ of (mobile) games.

Nike, sneaker revolution: Who said subscriptions had to be digital? Nike has just launched a trainer / sneaker subscription aimed at kids. Well, it’s actually aimed at the parents of kids, with a monthly fee for quarterly, bimonthly or monthly purchases that results in net savings on trainers. Fast-growing kids constantly need new shoes, and this move reduces the risk of brand churn with cost-conscious parents. Footwear business economics aside, the growing legacy of digital content is familiarising consumers with subscription relationships.

The Top TV Shows Of 2017, And The Inexorable Rise Of Netflix

This is a guest post by MIDiA’s Tim Mulligan (also my brother!)

For the past 15 months MIDiA Research has been tracking every quarter more than 60 leading TV shows across the US, UK, Canada and Australia. With the fragmentation of TV audiences and the rise of streaming video services like Netflix and Amazon Prime Video that are notoriously guarded with their data, it is becoming progressively more difficult for TV companies and advertisers to know just how popular individual TV shows actually are. Many are increasingly turning to social media as a guide to popularity, but these are demographically skewed. For example, the audiences of Facebook and Twitter are both older, so rankings based on these platforms skew results towards shows that are popular among older consumers. This is why the likes of The Walking Dead and Game of Thrones usually top such rankings. (More than half of the audiences for both shows are aged 35 and above, compared to, for example, just 36% for 13 Reasons Why).

This is why we developed the MIDiA TV Show Brand Tracker, surveying 3,500 consumers, to track popularity of shows with a neutral and objective methodology. The results provide a unique view of which shows are resonating with consumers in the streaming era.

CBS’s The Big Bang Theory tops MIDiA’s Brand Tracker rankings with an average 45% fan penetration across all of 2017. The Big Bang Theory tends to underreport on Twitter and Facebook rankings but has topped our list in each quarter in every market except for the UK where it is shunted into third place by the BBC’s Sherlock and ITV’s Broadchurch. CBS also takes second spot with 41% fan penetration, holding the same position in the US and Australia, but slipping to third in Canada and sixth in the UK.

2017 was a massive year for HBO’s Game of Thrones with season 7 premiering in July, which drove a three-percentage-point spike in fandom in Q3 – up to 33%. Game of Thrones is a top-four show across all four markets surveyed. Although Game of Thrones is HBO’s only show in the top 20, the network has three other shows in the Top 40 including Westworld (which maintained strong fandom despite having aired in December 2016, suggesting that season 2 will get off to a strong start in 2018).

The BBC is one of the strongest performing networks with three shows in the top 20. AMC’s The Walking Dead takes sixth position with 27% penetration, but fandom varies markedly by market, slipping to just 10^th in the UK.

Perhaps the biggest story of 2017 is the rise of Netflix as a TV network. Netflix, with seven, has more shows than any other in the top 40, though only two are in the top 20 (Stranger Things and House of Cards). Superhero shows have been a big win for Netflix with Jessica Jones, Luke Cage and Daredevil all in the top 40. But, the one to pay attention to is 13 Reasons Why at number 23, driven largely by 16-24-year-old viewers. In the post-linear schedule world Netflix has learned how to super serve audience segments with shows that are ‘prime time’ titles within its service that would not be able to occupy prime time slots on broadcast TV because their appeal to older audiences is limited.

Stranger Things was Netflix’s biggest hit of 2017, taking eighth spot overall, but first among 16-19 year olds and second place for 20-24 year olds. Netflix might have built its revenue business around 25-44 year olds but it is winning the programming battle for younger millennials. Traditional TV networks should pay heed.

If you would like to learn more about MIDiA’s TV Brand Tracker and how to get access to the data, email us at info@midiaresearch.com