(This post is a weekly news update by our researcher, Dakota Sky Bloom).
Fox-Disney Deal Updates
With the immensely consequential linkup of Disney and Fox still rolling on there have been a number of interesting tidbits that have shaken out so far:
- Comcast has fully bowed out of the Fox hunt, leaving the field wide open for Disney.
- Including Fox’s holdings, Disney will own 40% of Vice Media (more than founder Shane Bauer) and 60% of Hulu. It would not be surprising if the Disney then acquired the other pieces of Hulu after the Fox deal wraps up.
- The deal would scupper Disney CEO Bob Iger’s potential political plans for the 2020 Presidential Election, as the acquisition would last until late 2019.
- Fox has had a hard time wrapping up its Sky deal in the UK due to baggage from Fox News and News Corp. Disney would have an easier time of it.
- The combined entity is estimated to cover roughly 40% of the yearly movie release calendar (with 27 feature films) and would have sufficient content to create its own international SVOD service to rival Netflix. This also terrifies movie theater exhibitors who know the loss in scale could hurt their businesses.
- Because the deal is a horizontal buy (two companies of the same industry) vs. a vertical buy (like the AT&T/Time Warner deal where two different but complementary industries combine) some industry watchers believe that it will have an easier regulatory time.
- Given that the CEO of Fox, Rupert Murdoch, is a close advisor to Trump, analysts speculate that the regulatory path may be easier than in AT&T’s case.
Why You Care: This deal will create the most dominant studio in recent memory, possibly ever. It will also shake up digital streaming, the feature film scene, theater exhibitors, the comics world, and TV production. Fox Television Studios, 50% of Endemol Shine, and more are among the television production pieces to be snapped up by Disney, giving them quite a boost. It also removes the largest pipeline of content that goes to Fox’s broadcast channel, creating concerns about its short-to-mid-term viability.
Facebook to Stop Paying News Feed Video Publishers
As is typical with Facebook’s content creation deals, the bridge deals for publishers to create content for Facebook’s On Demand format are being phased out, with Facebook switching its attention to its new Watch project. Fewer and fewer publishers want to work with Facebook on creating new video formats due to repeated failures in monetizing each new format. This has been seen with Facebook Live video and Facebook On Demand. Each has failed to generate a working revenue model, which means that each format has to be abandoned by publishers when the bridge deal runs out. This is also part of the trend where Facebook will promote a certain type of content (images, GIFs, video, Live video) with enhanced reach, only to decrease said sharply once Facebook moves onto the next platform. This has caught out publishers multiple times before.
Why You Care: Given the history, Watch might suffer the same fate, leaving publishers even more cautious of engaging with Facebook on a more than temporary basis. As a result, creators going into the next round of pitches with Facebook may want to keep the ephemerality of the platforms they are building for in mind.
- According to Parse.ly, Google sends more traffic to publishers than any other source, including Facebook, clocking in at 44% of total external internet traffic for digital publishers. Facebook had a brief time on top until Google’s recent innovations, like Accelerated Mobile Pages (AMP), let them regain momentum. AMP’s popularity was compounded by Facebook’s choice to prioritize friends and family posts in the News Feed over those of publishers.
- Apple has acquired Shazam for $400 million. This could cause issues for Spotify, which gets referral traffic from Shazam. It is also far below Shazam’s recent $1 billion valuation. Shazam had previously had issues finding a monetization model.
- Dramafever, the WB-owned East Asian soap opera SVOD, has partnered with VRV (which is owned by AT&T through Otter Media). These quiet linkups while the DOJ vs. AT&T lawsuit is happening are to be expected.
- Live.Me launched the new weekly series Spotlight Live!, a variety show with a comedic slant. It airs on Wednesdays at 8 PM Eastern Time.
- According to Superdata, global esports revenue will grow by 26% by 2020. Viewership is up 12% annually and third-party investments are increasing. Not hockey stick growth, but still impressive.
- Redbox launches a digital rental and sale service, despite transactional video on demand falling in recent years. It does so sans Disney, which threatened a lawsuit.
- Tidal might die in six to 12 months, and is currently low on both cash and revenue.
- YouTube TV is adding 34 new markets in a major territorial expansion.
- Format updates: Imgur copies Snapchat’s Stories format with a GIF-based twist, while Tinder will adopt a Facebook-style chronological feed of all of your matches’ social updates. Both are interesting approaches to product innovation.
- Facebook messaging VP David Marcus joins Coinbase board. This could lead to Facebook moving into cryptocurrencies. This could be implemented in a Messenger /Whatsapp payment & digital wallet system.
- Patreon stops its planned switch in payment fees due to massive creator and fan outburst. It may have damaged its brand in the process, and many creators lost patrons because of the original announcement.