Hi friends, thanks for opening this one up! I wanted to start documenting stories I find interesting in the media/entertainment business world. My goal is to highlight a couple stories every couple weeks for a short read. Hope you keep reading and please forward to anyone you think might be interested <3
Roku drops YouTube TV after failed negotiations
Little over a week ago, Roku officially announced that YouTube TV will be pulled from the platform (new YouTube TV users will not be able to access via Roku). Roku accused Google of wanting to manipulate search results and force the distributor to use a specific chip that could raise the cost of Roku’s hardware. YouTube quickly followed up noting that Roku’s claim was “baseless and false” and that YouTube has technical requirements for all its partners.
Google rolls up its sleeves: Shortly after the expired deal, the tech giant added YouTube TV to the main YouTube app as a workaround.
A new ecosystem: With the prolific rise of streaming services, we are seeing increased tension with distributors like Roku and content programmers like YouTube fighting for the data and money behind all your consumption.
My take: For now, only a few players like YouTube, Netflix and Disney would be able to play hard ball with Roku (sorry Paramount+). But is there a world where content programmers can bypass hardware distributors like Roku? Maybe smart TVs make a software leap and households can bypass the purple dongle altogether.
Exploring the bear case further, let’s look at Roku’s two major revenue streams: 1) margins on app purchases and 2) ad revenue
With a 50+ million install base, Roku takes a cut of all paid app purchases (similar to Apple with its AppStore). However, in the scenario where smart TVs become ubiquitous and users download apps directly onto the TV, what happens to Roku?
Via The Roku Channel, Roku offers free content (remember Quibi?) supported by ads. But Roku is going to fight for this ad spend going forward. Companies have fixed marketing budgets on where they want to buy ad space (30 second spot on Roku vs Hulu etc). Soon, these companies will have more options to find consumer eyeballs as HBO Max launches an AVOD option this summer and most likely from Netflix and Disney+/STAR down the line. I’m not sure if the Roku/Quibi content (which I thought was meh at best) can keep viewers on their channel.
Clubhouse still fun house?
I haven’t tried Clubhouse yet (sorry Shiv), but their meteoric rise earlier this year was hard to ignore. According to SensorTower, Clubhouse’s downloads are down to ~900,000* in April but fair to say the company has pioneered a new idea of “social audio”.
Copycats: Twitter launched Spaces beginning of May; Facebook is looking at multiple audio products like Hotline and Live Audio Rooms; Reddit also has Reddit Talk.
My take: I’m not sold on this social audio world. However, if this takes off, consumers will follow the talent, not the platform. Clubhouse’s technology isn’t unique enough to build a competitive moat (look at the copycats). When Elon Musk decides he has the same fun dropping by Dorsey’s Spaces and Reddit Talk, the masses will follow the meme king to whichever platform.
I certainly respect the novelty of Clubhouse and am excited to see how social audio evolves.
What do you think?
*Clubhouse launched on Android May 9, 2021
Other Highlights
M&A
Verizon agreed to sell its media division (AOL and Yahoo) to Apollo for $5 billion. Verizon will retain a 10% stake in the company which will be known as Yahoo after close (Verizon Press Release)
Flashback: Verizon bought Yahoo for $4.5 billion in 2017 and AOL for $4.4 billion in 2015
Meredith selling broadcast TV business to Gray Television for $2.7 billion to focus on magazine brands and digital-media properties (WSJ)
Twitter acquires Scroll, a subscriptions-based service allowing users to read publishers’ content without the clutter of ads (Twitter Press Release)
Twitter is on a content building spree. Twitter bought newsletter publishing company Revue earlier this year and recently inked new partnerships with NBCUniversal, Billboard, MLB and NHL to bring more news, music and sports on the platform
Disney+
“Loki” premiering two days earlier now on June 9; Wednesdays are the new Fridays with Mr. Hiddleston
Disney+ Hotstar launching in Malaysia on June 1 for $13.36 (54.90 Malyasian ringgit) (Variety)
Hollywood
NBC drops Golden Globes in 2022 due to growing controversy around the HFPA (Variety)
What I’m streaming…
True Detective Season 3: Nic Pizzolatto brings back the gripping storyline and mounting tension that we remember from Season 1
Crashing: makes me miss NYC a bit…