News Disney and Fox come to terms -- announcement soon; huge IP acquisition

[jt04]

I don't think the public would look at it too kindly though would they?

The tech giants are already being scrutinized especially overseas. I just can't see one of them buying up these emerging entertainment conglomerates which often include news divisions.

 

[winstongator]

Consolidation and M&A should be expected in the movie industry over the next few months/years. As we said in the last page there should only be about 4 or 5 winners in this race (+ the ones that can cater to a niche like the NBC one). I think Columbia/SPE, Lionsgate, Paramount, MGM are all attractive targets that Netflix, Amazon, Apple should be interested in. Problem is there'll be less theatrical releases as none of the aforementioned ones really have an interest in that, but they'll gain a significant amount of content and a hell of a production company.

Consolidation has happened in lots of industries over the past 10-15 years. In my former line of work, there were at least 5 big players, with one newcomer. Now there are two. If you looked at the number of independent social media companies 10-15 years ago vs. now, even though there is money in the market now, there are fewer players. Instagram, the chat FB bought, blogger, Waze: I should know more. Some tech conglomerates have virtually disappeared over that time too, split up and consumed by other players - Motorola comes to mind there.

As you get consolidation in movies & TV, you get more bureaucracy, less projects green-lit, more conservative choices. That opens space for new players, and the cycle repeats.

 

[winstongator]

It's pretty simple, Comcast execs are bearish on the whole streaming ecosystem and wanted to lock in a good price on Hulu in case there was any kind of devaluation in the next couple of years. They see Netflix as trading at bubble valuations and were concerned that possibly Hulu might be as well.

Comcast execs (and NBC execs) have said that they believe streaming is a low margin, high cost proposition. That's why they're focused on an AVOD service where ads will cover the whole cost of video, but they won't be trying as hard as others to make exclusive content and make the service their main money-maker for content distribution.

Only time will tell whether they're right or wrong. Nobody really knows what will happen yet as all these new services come online the next couple of years.

Comcast is squeezing as much as they can out of their monopoly cable business. It generates over half its revenue and over 2/3rds of EBITDA. It's easy to decry something as a low margin business when it requires work to run. Much easier to cash checks on existing infrastructure where people don't have competitive alternatives.

If, or when, true competitive options come around for coax for internet access, and when a-la-carte streaming overtakes, we'll hear Comcast execs singing a completely different tune. I know the when might be in 20 years, but it'll eventually get here.

 

[bartholomr4]

Comcast is squeezing as much as they can out of their monopoly cable business. It generates over half its revenue and over 2/3rds of EBITDA. It's easy to decry something as a low margin business when it requires work to run. Much easier to cash checks on existing infrastructure where people don't have competitive alternatives.

If, or when, true competitive options come around for coax for internet access, and when a-la-carte streaming overtakes, we'll hear Comcast execs singing a completely different tune. I know the when might be in 20 years, but it'll eventually get here.

I agree. Maybe it is coming sooner than 20 years.

If you look at the Year-over-year comparison of Revenue and EBITDA Comcast reported a 19% increase in Revenue. In reality if you take away Sky (because Comcast didn't own sky in 2018), the revenue actually dropped 2.8%. For EBITDA Summary they reported a 11.4% increase with Sky and 2.8 % without Sky. Year to date, Comcast has revenue from 13 Movies compared to 8 last year. If you remove the revenue and EBITDA from those incremental movies, the company is Flat on an income perspective. If NBCU stops streaming on Netflix or Hulu, the company is negative. Unless the firm figures out a way to grow its revenue in this space, Comcast is going to struggle to keep up its earnings momentum. It surely isn't going to be able to sustain this growth rate once comparisons to Sky YoY start to show up on the companies financial statements.

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[mikejs78]

It's pretty simple, Comcast execs are bearish on the whole streaming ecosystem and wanted to lock in a good price on Hulu in case there was any kind of devaluation in the next couple of years. They see Netflix as trading at bubble valuations and were concerned that possibly Hulu might be as well.

Comcast execs (and NBC execs) have said that they believe streaming is a low margin, high cost proposition. That's why they're focused on an AVOD service where ads will cover the whole cost of video, but they won't be trying as hard as others to make exclusive content and make the service their main money-maker for content distribution.

Only time will tell whether they're right or wrong. Nobody really knows what will happen yet as all these new services come online the next couple of years.

I think all of that is why NBCU is going for a free AVOD service that anybody with a pay tv subscription can use. They're just focused on making it a free ad supported service for those who remain in the pay tv ecosystem as I doubt they'll have many paid subs.

Very short sighted strategy IMO. The paid subs cable model is in freefall.. I don't see this being viable after 3-5 years.

Netflix will probably lead the remainder given their first mover advantage and just how much they're spending on content.

Not sure I agree with your list their. I see Disney+ as more a complimentary service to your Netflix/Amazon Prime sub. I dont see many people subbing just specifically to Disney+. The most common combination will most likely be Disney+/Hulu and Netflix and or Amazon Prime.

I think Netflix is in a bit of a precarious spot - they are losing a lot of their third-party content and are developing a reputation for cancelling their first party content before the stories can be resolved. Why invest yourself in their first party content when you know it's likely to be cancelled after a couple of season's without a satisfactory ending?

A year ago I was very bullish on Netflix. But I find myself watching their originals less and less, for this very reason. Despite first mover advantage, they may end up being disrupted by D+/Hulu. I do agree that D+ is more complimentary, but D+ plus Hulu is potentially a worthy competitor to Netflix and may surpass them as Netflix declines. And since the friction to change is not that high, there could be a lot more movement between streaming services as all this settles out.

First mover is an advantage but it is not a magic bullet to remain perpetually relevant. Otherwise we'd all be using Blackberries and Apple II computers.

 

[Indy_UK]

It's going to need to be good marketing on Disneys part to get people to technically subscribe to two new subscription services despite the same account login and discount for subscribing to both.

 

[winstongator]

I agree. Maybe it is coming sooner than 20 years.

If you look at the Year-over-year comparison of Revenue and EBITDA Comcast reported a 19% increase in Revenue. In reality if you take away Sky (because Comcast didn't own sky in 2018), the revenue actually dropped 2.8%. For EBITDA Summary they reported a 11.4% increase with Sky and 2.8 % without Sky. Year to date, Comcast has revenue from 13 Movies compared to 8 last year. If you remove the revenue and EBITDA from those incremental movies, the company is Flat on an income perspective. If NBCU stops streaming on Netflix or Hulu, the company is negative. Unless the firm figures out a way to grow its revenue in this space, Comcast is going to struggle to keep up its earnings momentum. It surely isn't going to be able to sustain this growth rate once comparisons to Sky YoY start to show up on the companies financial statements.

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Great point! I was mostly looking at Cable's share. For revenue, minus Sky it was 2/3rds, which makes the Sky acquisition even more important.

15 years ago I was working on a project for the video overlay portion of FiOS systems. Basically so Verizon could sell you a CATV equivalent service. Marketing was like, 'TV will be a-la-carte in 5 years. This is a waste'. 15 years later, I'm not going to underestimate the legs on that business. It's dying though, and it's just a matter of how long it takes.

Comcast for the most part is an internet delivery company with some content & parks hooked on. They also leverage hugely valuable monopolies.

 

[winstongator]

Very short sighted strategy IMO. The paid subs cable model is in freefall.. I don't see this being viable after 3-5 years.




I think Netflix is in a bit of a precarious spot - they are losing a lot of their third-party content and are developing a reputation for cancelling their first party content before the stories can be resolved. Why invest yourself in their first party content when you know it's likely to be cancelled after a couple of season's without a satisfactory ending?

A year ago I was very bullish on Netflix. But I find myself watching their originals less and less, for this very reason. Despite first mover advantage, they may end up being disrupted by D+/Hulu. I do agree that D+ is more complimentary, but D+ plus Hulu is potentially a worthy competitor to Netflix and may surpass them as Netflix declines. And since the friction to change is not that high, there could be a lot more movement between streaming services as all this settles out.

First mover is an advantage but it is not a magic bullet to remain perpetually relevant. Otherwise we'd all be using Blackberries and Apple II computers.

Comcast has to ignore cord cutting and talk up the paid subs model. If they were honest and said that the paid subs & voice income will go to zero Wall St would bail on them quickly. There are some smart people on Wall St, I wonder if they are shorting it, or they realize that determining when that goes to zero is a tricky exercise.

My family loves A Series of Unfortunate Events and Nailed It. We are still watching a lot of Netflix, just a different mix of their content. Now, might Netflix merge with another media company with more content, or partner with smaller companies who need an outlet but aren't big enough to roll their own? Still more consolidation to happen.

It's going to need to be good marketing on Disneys part to get people to technically subscribe to two new subscription services despite the same account login and discount for subscribing to both.

I will not need any marketing to sign up for Disney+. No amount of marketing at this point will get me to sign up for Hulu. D+ is fundamentally different and while it'll get a decent marketing budget, people won't take much convincing.

 

[sedati]

Has this been mentioned? If well done, this would up my interest in Hulu:

Hulu plans series based on Stephen King's 'The Eyes of the Dragon'

Seth Grahame-Smith will write the pilot episode and run the show.

ew.com

 

[ImperfectPixie]

Has this been mentioned? If well done, this would up my interest in Hulu:

Hulu plans series based on Stephen King's 'The Eyes of the Dragon'

Seth Grahame-Smith will write the pilot episode and run the show.

ew.com

Those are the key words right there. I don't know if it's because Mr. King likes it this way or what, but it seems like almost all the movies/series ever made from his books are never as good as they could be. I enjoy most of them, but they just tend to seem cheesy in comparison to the books. (I realize most people tend to think the books are always better - I am counted among them - but the contrast between book/movie seems to be extraordinarily big when it comes to King's works.)

For example, I really did love The Dark Tower movie, but they really chopped the story a ton and I felt like the loss of such large chunks of plot, and of Eddie and Susannah as main characters was a tragedy. It's really the type of book series that is deserving of a series of films.

 

[bartholomr4]

https://www.bizjournals.com/philadelphia/news/2019/05/27/the-battle-for-sky-comcast-fox-disney.html?ana=yahoo&yptr=yahoo

New book reveals never-heard-before details in Comcast’s fight for Sky

 

[brodie999]

Marvel is Exploring Ways of Introducing Deadpool Into the MCU

It’s been a little while since I’ve been able to bring you a real big...

mcucosmic.com

Marvel rumoured to be considering multiple ways to introduce Deadpool into the MCU.

 

[HauntedMansionFLA]

This week the Supreme Court agreed to hear a case about Apple and the App Store. (i.e. Apple forcing companies to pay 30 % of their revenue to sell services through the Apple IOS). I think Apple is going to wait until the Supreme Court draws some lines around how Apple monetizes the AppStore and with the Apple Ecosystem [perception the ecosystem is now becoming monopolistic]. With apple TV and the apple operating system so prevalent, taking on a studio they risk poking the bear a little and reinforcing the "I have to go through apple and give them 30% of my revenue to operate" perception, appears to me to be the signal they are sending.

With Bob Iger on the board of directors, and Steve Job's wife being one of the to 3 or 4 shareholders in Disney, they are connected to the coming Disney model. I think the move by apple is more complicated than one might think. Heck, Apple could have picked up the RSN's for about one month of revenue and made a big jump into sports programming..... If they were going to be aggressive in the content business, they could have purchased these networks for a little more than twice what they paid for BEATS, which as a company turned out to be a rounding error in their income statement.

Disney/Fox/Apple merger??

 

[bartholomr4]

Disney/Fox/Apple merger??

No.... The conversation was about Apple purchasing media assets.... The Supreme Court ruling (I surmised) and the related court case about Apple’s potential monopoly power within its operating system (forcing companies which sell on apple devices to pay apple 30% of the revenue collected) is a reason why Apple is not buying.....

 

[AnotherDayAnotherDollar]

Marvel is Exploring Ways of Introducing Deadpool Into the MCU

It’s been a little while since I’ve been able to bring you a real big...

mcucosmic.com

Marvel rumoured to be considering multiple ways to introduce Deadpool into the MCU.

Keep in mind this guy has been known to be wrong. And a legit leaker who leaked endgame's plot months ahead of time said Deadpool 3 in Spidey 3 is not a thing (disputing his claim). The leaker also says that Sony desperately wants Venom in Spidey 3. The original deal was for 5 movies. That may be a requirement from Sony to renew the deal. Interesting times ahead.

No.... The conversation was about Apple purchasing media assets.... The Supreme Court ruling (I surmised) and the related court case about Apple’s potential monopoly power within its operating system (forcing companies which sell on apple devices to pay apple 30% of the revenue collected) is a reason why Apple is not buying.....

Apple is not buying...what? I think Apple, Amazon, or Netflix should seriously consider buying Paramount or Columbia (and Disney should consider partnering up with them so they can get the license/rights for certain properties).

 

[Twilight_Roxas]

Apple would have to acquire Sony to get Columbia.

 

[AnotherDayAnotherDollar]

Apple would have to acquire Sony to get Columbia.

No they wouldn't. Sony acquired Columbia from Coca Cola in the late 80s IIRC. Dan Loeb has been trying to push Sony to spin off or sell SPE. They can sell the subsidiary without having to sell the parent.

 

[Disneyhead'71]

Those are the key words right there. I don't know if it's because Mr. King likes it this way or what, but it seems like almost all the movies/series ever made from his books are never as good as they could be. I enjoy most of them, but they just tend to seem cheesy in comparison to the books. (I realize most people tend to think the books are always better - I am counted among them - but the contrast between book/movie seems to be extraordinarily big when it comes to King's works.)

For example, I really did love The Dark Tower movie, but they really chopped the story a ton and I felt like the loss of such large chunks of plot, and of Eddie and Susannah as main characters was a tragedy. It's really the type of book series that is deserving of a series of films.

I LOATHED the Dark Tower movie. So disappointed. But I loved the adaption of Mr. Mercedes on AT&T U-Verse/Direct TV. Brendan Gleeson and Harry Treadway were awesome. If you've read Mr. Mercedes it is worth signing up for the free 30 day trial and binge watching both seasons. Season one is almost a direct adaption of the first book in the Mr. Mercedes trilogy. Season 2 is an adaption of End of Watch, the 3rd book in the trilogy.

 

[BlakeW39]

The only thing I really care for is the Marvel stuff tbh. The FOX deal wasn't for IP and truly holds very little of it that would be valuable for a theme park. I do like the recent Apes films and I enjoyed the first Kingsman, however, and I still think the original Ice Age is fantastic and criminally underrated.

 

[Disneyhead'71]

The only thing I really care for is the Marvel stuff tbh. The FOX deal wasn't for IP and truly holds very little of it that would be valuable for a theme park. I do like the recent Apes films and I enjoyed the first Kingsman, however, and I still think the original Ice Age is fantastic and criminally underrated.

The first Ice Age movie was better than either Cars movie.