OTT Video News: Week of 4/25/22

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Roku reaches 61 million active accounts

While Roku increased its total revenue and active accounts in Q1, Roku’s hardware business declined for the third straight quarter. Roku cites supply chain issues that led to slower smart TV adoption, hurting the company’s expansion in terms of devices and overall users.

Roku’s reported growth in its platform business includes:

  • $733.7 million in total revenue, up 28% year over year
  • $646.9 million in platform revenue, up 39% year over year
  • $86.8 million in player revenue, down 19% year over year
  • 61.3 million active accounts, up 14% year over year
  • 20.9 billion hours of video streamed through Roku, up 14% year over year
  • ARPU of $42.91
     

Comcast and Charter team up to take on Roku and Amazon Fire TV

Charter and Comcast, the two largest cable companies in the U.S, have launched a joint venture for a direct competitor to Roku, Fire TV, and other TV OS platforms based on Comcast’s Flex streaming service.

Related: New Comcast-Charter streaming joint venture suggests the next chapter of the streaming wars is coming

Meanwhile, both companies took a hit with their traditional video business. Comcast lost 484,000 traditional video subscribers in Q1 2022, which is the largest quarterly video sub-loss in company history and Charter lost 112,000 subscribers during the same period.

Related: 59% of U.S. adults currently subscribe to cable, a new survey found that the percentage will drop to 25% within the next few years.

And while Comcast’s legacy video biz dives, Peacock thrives

Speaking of Comcast, the company lost 484,000 traditional video subscribers in Q1 2022, which is the largest quarterly video sub-loss in company history.

Meanwhile, Peacock added 4 million subscribers, growing to 13 million and 28 million monthly active accounts in the U.S. On the latter, it was noted that The Olympics and the Super Bowl in recent quarters have boosted Peacock usage, which is expected to level off in time.

Related: Is Peacock playing to win, and why is Comcast still so focused on the video biz? 

You miss 100% of the jabs you don’t take

Discovery ended the quarter with 24 million DTC subscribers, up 2 million subscribers from the end of 2021. The numbers include discovery+ and their previously launched international platforms, including dPlay, which was rebranded to discovery+ late last year. The company also clarified that it only counts paying subs and excludes users on free trials. However, the subscriber totals include Ukraine subscribers, who temporarily receive Discovery+ for free.

Along with HBO and HBO Max (76.8 million combined subs), Warner Bros. Discovery now has more than 100 million collective global subscribers.

Taking every jab it seems it can at WarnerMedia, WBD head honcho David Zaslav made it a point to call out HBO Max’s high level of churn while patting himself on the back for Discovery’s low churn, “There’s meaningful churn on HBO Max, much higher than the churn that we have seen.”

Meanwhile, April 30th was supposed to be the last day of service for CNN+, WarnerMedia’s streaming services that Discovery execs axed in less than a month. However, the plug was pulled two days early.

A quick note about CNN+

I feel like CNN+, regardless if it didn’t have enough content, could have been used as a bundle play along with Discovery+ and HBO Max (a la The Disney bundle). Not because we need more streaming services, but when you offer multiple streaming services, you can sell those via your owned and operated platforms (e.g. your website) and bypass the 15-30% platform tax companies like Apple, Roku, Google, and Fire TV impose on individual apps. This is in addition to the 30% ad revenue or inventory split that’s also given up.

During the company’s earnings call this week, CFO Gunnar Wiedenfels said, “The priority is to rally behind the integrated (merged Discovery and HBO Max) product and be very thoughtful about our spend.”

Hey, this is a numbers guy, so I’m sure he did the maths?

A quick rant about app stores

It’s always boggled my mind that a (media) company can spend tens of millions of dollars building the frontend and backend infrastructure required to launch and maintain a DTC streaming service only to forgo 15-30% of their revenue IN PERPETUITY to app stores. It’s a raw deal, so even though less is more, bundles are a good option for media companies.

Face it, the 70/30 split, as it’s often referred, to is absurd. It’s a model that was introduced in the 1970s by Warner. Bros (how about that irony) for physical VHS tapes that cost a lot of money. This is 2022 and we’re talking about apps that cost virtually nothing to distribute.

Related: What doomed CNN+? How rival strategies and executive intrigue fueled the streaming service’s rapid demise

Elsewhere in the industry

  • Prime Video has debuted a “Top 10 in the U.S.” menu, a la Netflix. Link
     
  • Beginning May 6, AMC Networks will air movies from AMCN studios (IFC Films, IFC Midnight, RLJE Films, and Shudder) on AMC+ immediately following their theatrical runs. Link
     
  • Last year, Sling TV released a new connected TV App on Apple TV, Amazon Fire TV, Roku, and other platforms. They’ve now improved the iOS versions of their applications. Link

For additional direct-to-consumer and OTT video news, insights, resources, and events, subscribe to 43Twenty CEO Kirby Grines’ The Streaming Wars newsletter, coming to your inbox every Friday.

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