OTT Week in Review: 02/10/20
Updated: Mar 19, 2020
Disney, the Verizon promotion, and calculating churn
Bob Iger provided updated subscriber counts for all of Disney’s OTT video services on last week’s earnings call.
Disney+: 28.6 million
Hulu: 30.4 million
ESPN+: 6.6 million
These numbers have exceeded growth expectations largely due to the Disney/Hulu/ESPN bundle, which we’ve called out the importance of recently. In last week’s newsletter, we highlighted how the Disney/Verizon promotion helped Verizon increase their wireless net additions by 790k, their highest in 6 years. Verizon didn’t give out figures on how many customers opted into the promotion, but lucky for us, Bob Iger did. About 20% of Disney+ subscriptions, or roughly 6 million, came from Verizon. What will be important to begin tracking in November is how many free users Disney+ can retain once their access gets shut off. And it’s worth noting is that once this free access expires, the Disney+ charge is going to be buried within customers’ Verizon bills, so don’t expect Verizon churn to happen all at once. And because we’re asked often “How do I calculate churn”, here’s a good read.
A = active cancellations in month (customer took action to cancel)
P = passive cancellations in month (credit card declines, non-renewals)
W = winback re-activations in month (previous subscribers who reactivated)
T = Total paid subscribers at beginning of month
The purest and most complete way to calculate churn is to follow the formula below: Average Net Monthly Churn = ((A+P)-W)/T
Beam me through the All Access funnel
CNBC’s Alex Sherman broke the news last week that ViacomCBS is considering launching a streaming service that will incorporate existing CBS All Access with Viacom assets including Pluto TV, Nickelodeon, BET, Comedy Central, MTV, and Paramount Pictures. The service will allegedly include both ad-supported ad-free flavors, with the premium ad-free version including Showtime. The service doesn’t have a name nor a price, however two unnamed sources say it’ll probably cost less than $10 month. We’ve been hinting at a bigger, badder CBS All Access leveraging its existing library of 3,600 film titles and 140,000 TV episodes. Last week, Pluto TV had begun streaming the first episode of CBS All Access original series Star Trek: Picard, hinting at how the company can leverage its mix of ad-supported and subscription-based properties. More on this soon.
A million here a million there
YouTube Music and YouTube Premium together have more than 20 million paying subscribers, and YouTube TV — Google’s over-the-top subscription TV service — has more than 2 million subscribers in the U.S. Variety Fun fact: On its own, Youtube's annual ad revenue of $15.15 billion comes in about $5 billion shy of what Netflix brought in last year.
Who are the ad wizards who came up with this one?
Amazon's IMDb TV signed a deal with Disney to license full seasons of 21 older TV shows including Lost, Desperate Housewives, My So-Called Life, Ally McBeal, and Malcolm in the Middle. Variety
"Always On" -- now optional
It's always wise to listen to your customers and Netflix did just that last Thursday. The company responded to complaints about its built-in autoplay feature and announced that it would give subscribers a choice. Additionally, not only can subs skip automatic previews, but they can prevent the next episode in a series from playing immediately after the previous one. The New York Times Because, how many times have you tried to binge-watch a series, only to find out that you left Netflix running and you're all-of-the-sudden four episodes ahead?
The sound of growth
Spotify reported a 31% growth in monthly active users (MAUs) year-over-year. The company now has 271 million MAUs globally (124 million of those are paid subscribers). In 2020, the company expects total MAUs to rise to 324-328 million, while paid subscribers should increase between 143-153 million. Spotify has over 700k podcast titles on its platform and consumption of the format grew 200% annually. The company stated that podcasts are also driving overall increases in engagement and retention for the service. LiveMint
I want you back!
In an effort to boost subscribers to hide to downplay the cord-cutting narrative, Sling TV is offering a 5-day promotion where customers (new and returning) can sign up for the service @ $5 for the first month. CNBC