Media Bytes #2
Good Charlotte, Disney love and Batman meets Guy Fieri
I write about what I find interesting in the media & entertainment business world. If you were forwarded this email and want to receive regular updates, click here:
Live Nation is bringing concerts back, and you don’t even have to leave home
Live Nation’s Q1 earnings made clear that fans are itching to go out again and the company is doing its best to beef up the concert pipeline. Pent up consumer demand may have been expected, but I was intrigued by a bet Live Nation made on a new type of concert experience. At the beginning of 2021, Live Nation bought a company called Veeps, a live streaming platform founded by Joel and Benji Madden of Good Charlotte (remember them?).
Less COVID, more revenue: 2020 forced artists and Live Nation to look for additional ways to make some cash and streaming became a viable option. So far, live streaming has been seen as a promotional tool for artists but Live Nation is now trying to position the experience as D2C. The opportunity is really two-fold:
Club Shows: An artist might get paid $50K to play one night at the Wiltern or Fillmore (not talking about Jay-Z or Taylor Swift...someone like Good Charlotte). Through Veeps, Live Nation can charge ~$10/user for hard core Good Charlotte fans who want to live stream the concert. Assuming there are at least 1,000 of these fans, that’s another $10,000+/night of revenue for the Madden bros
Festivals: You pay ~$20 to live stream Outside Lands or EDC for the weekend and Live Nation brings a party platform right into your living room. If you want to watch your favorite artists, but the thought of attending these festivals with contraband hidden in your underwear sounds exhausting, it’s not a bad deal
My take: Live streaming concerts won’t be a top line game changer for Live Nation. However, it does speak to how people expect to consume content. Programmers, artists and distributors know that consumers want everything streaming on-demand these days: movies, shows, sports, news, concerts. RIP TiVo.
Disney is so much more than Baby Yoda
Disney’s stock took a little tumble after Q2 earnings as investors got their panties in a bunch about subscriber growth. Disney+ clocked in 103.6 million subscribers, ~5 million short of consensus expectations.
Yes, average revenue per user dropped YoY, but that’s because the Disney+ Hotstar launch has a lower price than traditional Disney+ in other markets, thus bringing the average down. Also, with the promotional push and adoption of the Disney bundle (Disney+, Hulu, ESPN+), ARPU will rebound healthily.
The bull view: Disney+ had over 90 million sign-ups in its first year so that momentum was sure to slow. Furthermore, Disney added subs at a faster rate at the end of Q2 than it did in the first two months of Q2. This is extra encouraging when you factor in the price increase late March and relatively same churn. As Disney starts to ramp up studio production and tap into their mega-IP (Marvel, Star Wars), Disney+ will inevitably bring out all the eyeballs Wall Street is looking for.
The most important point is that Disney is the best at what it needs to be: an entertainment company. Disney is the industry leader in creating stories that people love, and the Mouse capitalizes on that love throughout the Disney flywheel: movies, shows, theme parks, cruises, merchandise, Broadway. Marketing dollars work harder when consumers already love the product.
Other Highlights
A visual to help understand the current media landscape
M&A
*wow* AT&T merging WarnerMedia with Discovery with current Discovery CEO, David Zaslav, to lead the new entity
Good move: AT&T spent a lot of money buying Time Warner back in the day ($85 billion). Since then, AT&T has been caught up with the 5G war with Verizon and not been able to invest the cash to scale HBO Max. Enter Zaslav. Through this merger, AT&T receives much needed coin and John Stankey (AT&T CEO) lets Zaslav focus on the streaming war with Netflix and Disney
So what happens with ViacomCBS (Paramount+) and Comcast/NBCU (Peacock)? They can’t merge due to regulatory concerns and probably can’t scale to compete with Netflix and Disney. I have no doubt bankers and tech companies are knocking on their doors. Speaking of consolidation…
*rumor* Amazon in talks to buy MGM studio for $9 billion
Bezos’ play could be more than just buying up MGM content (which includes James Bond and Creed). Amazon has shown interest in the brick & mortar space with Whole Foods 2017 and chatter of buying AMC Theatres back in March 2020. Could Bezos be positioning for an AMZN Theatres future? Here are some potential features:
Discounted movie tickets for Prime members
Amazon Go-esque concession stands
Exclusive premiers for Amazon Studios productions
Kakao buys Tapas and Radish Media to expand original content in North America
Disney
Disney launches new label, Onyx Collective, to showcase content from creators of color and underrepresented voices
HBO Max
Friends: The Reunion to premier on May 27th
What I’m wondering…
If I were a toy in Toy Story, how would I square up against the others in a fight?
*Just one, not the whole squad
The visual of the media landscape is amazing! Thank you.