Take Five (the big five stories and data you need to know) November 25th 2019

Disney tidies its streaming stats: Disney is tidying up its streaming subscriber numbers in preparation for reporting the performance so far of Disney+. In the shake-up, ESPN falls from 3.4 million to three million while Hulu goes from a 28.5 million to 29 million. All figures Q3 2019. Headline: Disney is already a streaming powerhouse and is about to become even bigger.

Spotify awards: Spotify is moving into the music awards space. The only surprise is that Spotify didn’t do this sooner; this is the equivalent of MTV moving into the awards space in the 2010s. Spotify will be hoping, probably with good reason, that it will be able to make its awards a bigger deal than YouTube has its YouTube Music Awards.

Tecent’s global gaming empire: Tencent has invested in 40% of Fortnite owner Epic Games and 11.5% in competitor PUBG. By using access to the Chinese market as leverage for getting equity stakes in western games publishers, Tencent is building a global games business. It may even be en route to becoming a global tech major. It has a long way to go, through.

YouTube creators can take a break, perhaps: YouTube CEO Susan Wojcicki claims her company’s analytics can take a break from making content and come back with bigger metrics. The data is likely skewed by a) under-performing channels taking a break, and b) the novelty factor of a returning creator. The underlying truth, however, is that YouTube’s monetisation system skews strongly towards high-volume output. The system needs changing if creators are to genuinely be able to take breaks.

Throw ladders down: Meghan Rapinoe’s acceptance speech for her Woman of the Year award presents a new vision for how those with influence should use their platform for others’ voices, by ‘throwing down ladders’ for others to climb up. She tackles inequality in many forms in her speech and sounds more like an accomplished activist politician than a sports personality. If only all sports people (and politicians) could make contributions like this. Go watch the video.

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.