iWorld
Where’s Quibi headed for in the OTT world?
MUMBAI: The streaming video landscape continues to fragment in 2020, as a growing number of streaming services join the fight for subscribers and users within an already competitive space. As a result, the global number of SVoD subscriptions is estimated to exceed 1 billion by mid-2020. Other streaming video services across social media players, esports and AVoD are also expected to show impressive growth.
The subscription streaming market has been further amplified by the stay-at-home lockdown period, which is not only encouraging a rise in TV viewing but also a change in behaviour, as gaps in live TV scheduling, particularly sports, encourage consumers to look elsewhere for entertainment alternatives. Beyond SVoD, this is also expected to fuel uptake of premium AVoD services such as Pluto TV. According to Futuresource’s Living with Digital consumer research, at the end of 2019, one in seven American households were active monthly users of Pluto TV, with Tubi just a little lower.
Quibi is a platform that sees a potentially rich corner for targeting millennial audiences with mobile-specific content. As the name indicates, ‘quick bite’ entertainment will consist of scripted and non-scripted content across a range of genres, including comedy, drama, reality and news updates. A-list creators, including Steven Speilberg, Ridley Scott and Catherine Hardwicke, are on board to produce and direct shows exclusively for the service, with Quibi’s new film-making technology ensuring a seamless experience, whether viewing in portrait or landscape.
Its launch during lockdown presents itself as a double-edged sword. As mentioned, consumers now have more time to experiment with new services, but equally, solo mobile-viewing is based to fit around people’s lifestyles and “normal” routines: when arriving early to meet your friends at the bar, commuting to work or school, exercising at the gym – all of those activities that are now on hold for the foreseeable future. The marked increase in SVoD viewing on TV sets over the recent weeks ultimately comes at the expense of content viewing on mobile devices.
Another key point here is: who are Quibi’s rivals? Its unique proposition addressing mobile viewing at a monthly price means that it is not only competing with major SVoD players like Netflix, Hulu, Amazon, and beyond, but other free services that also focus on mobile viewing. This includes the likes of Facebook Watch, Snap Originals, IGTV, Tik-Tok and of course, YouTube. Although YouTube is the market leader for short form content worldwide, people do not only watch its content on smartphones or tablets. In fact, Futuresource’s consumer research shows that just 42 per cent of YouTube watchers in the top five Western European countries and USA use a tablet or smartphone as their main viewing device to view the service. As the quality and professionalism of content on YouTube increases, consumers are finding additional value in watching on a larger screen. This means that Quibi faces potential competition from all sides, as it looks to exploit what it has identified as a gap in the market. However, Quibi has recently announced that it will enable casting to compatible TVs in May.
Quibi launches with a free 90-day trial, a longer period than currently offered by Netflix, Amazon Prime, Apple TV or Disney+. This is highly unusual for such a service launch, and its major challenge will be converting these to paying subscribers. While the trial provides a valuable period to garner user behaviour and shape the future direction of the service, will most users have exhausted the content that interests them by the time the trial expires?
Quibi will be judged on both the quality and originality of the content it provides, benchmarked against the key SVoD and AVoD players as mentioned above. Whether the service can command the attention it needs in a considerably fragmented market remains to be seen.
The author is principal analyst at Futuresource Consulting
iWorld
Netflix has room to raise its Warner Bros bid: Reuters report
WBD sets 20 March vote but gives Paramount brief window for final bid
CALIFORNIA: Netflix has ample firepower to raise its bid for Warner Bros Discovery if rival suitor Paramount Skydance sweetens its offer, setting the stage for a high-stakes auction over one of Hollywood’s richest catalogues, Reuters reported.
The battle has pitted two media heavyweights against each other for control of franchises ranging from Harry Potter and Game of Thrones to DC Comics and Superman. While Warner Bros is pressing ahead with a 20 March shareholder vote on its deal with Netflix, the board has granted Paramount a narrow window to submit what it calls a “best and final” proposal.
Netflix has agreed to pay $27.75 a share, valuing Warner’s studio and streaming operations at about $82.7 billion. Paramount, by contrast, has offered $30 a share, or $108.4 billion, for the entire company, including Discovery Global, home to CNN, HGTV and other legacy television assets.
On Tuesday, Warner Bros rejected Paramount’s latest hostile bid but stopped short of closing the door. The rival studio had informally floated a $31-a-share proposal, prompting the board to re-engage while reaffirming its backing for the Netflix transaction.
“Netflix still looks to be in the driving seat, but that can quickly shift,” said Hargreaves Lansdown senior equity analyst Matt Britzman. “Price will likely be decisive. Funding certainty and regulatory risk matter, but at a high enough number they become secondary.”
He added that the bids are not directly comparable, with Netflix leaving behind the traditional network business: a trade-off the board and shareholders must ultimately price.
Paramount said it would press ahead with its tender offer, oppose what it called an “inferior” Netflix deal and push to nominate directors at Warner’s upcoming annual meeting. Under the merger agreement, Netflix is entitled to match any improved bid.
In a letter to Paramount’s board, Warner Bros chairman Samuel DiPiazza Jr and chief executive David Zaslav said the company remained “fully committed” to the Netflix transaction.
Behind the scenes, board-level concerns have tilted the balance. Eisner Advisory Group partner Paren Knadjian, said questions over financing structure, timing and regulatory approval continued to weigh on Paramount’s proposal, regardless of headline valuation.
Paramount has attempted to bridge the gap by offering Warner shareholders additional cash for every quarter the deal fails to close after this year, and by agreeing to cover the $2.8 billion break fee payable to Netflix if Warner walks away. The board, however, said key issues remain unresolved, including exposure to a potential $1.5 billion junior lien financing fee, execution risk if debt funding collapses, and whether equity backing led by Larry Ellison is fully committed.
