Diamond Sports Group, the owner of Bally Sports Midwest, expects to launch a streaming deal with Amazon Prime Video in October, aiming to offset declining cable viewership. The company filed for Chapter 11 bankruptcy last year but has secured deals to inject hundreds of millions of dollars into the business. However, sports leagues are raising concerns about the company's timeline, as it broadcasts games for multiple MLB, NBA, and NHL teams. The company is under pressure to finalize key negotiations in the coming months to emerge from bankruptcy and continue airing professional sports.
Amazon CEO Andy Jassy highlighted the company's strong progress in video advertising, with a 24% rise in ad revenue reaching $47 billion in 2023, primarily driven by sponsored ads. Prime Video has introduced ads on scripted shows and films, reaching 200 million monthly viewers and offering a self-service option for advertisers to reach over 30 streaming services. Unlike competitors, Prime Video includes ads as a standard feature, with Prime members having to pay extra to avoid them. Jassy's annual letter also discussed his pay rise, Amazon's upcoming shareholder meeting, and the company's approach to "primitives" as foundational building blocks for technology.
Walmart's $2.3 billion deal to acquire TV maker Vizio signals a shift in the advertising landscape as digital advertising, led by tech giants like Google and Meta, now dominates U.S. ad spending. With Amazon also expanding its ad business, traditional TV advertising faces challenges, and retail giants like Walmart and Target are aiming to secure their share of the pie. The deal also raises concerns for traditional TV advertising executives, as Walmart's access to Vizio's viewer data could impact the industry. As the competition for ad revenue intensifies, media companies may need to adapt and partner with platforms possessing valuable consumer data to navigate the changing landscape.
In 2023, streaming TV saw a surge in viewership for library series like 'Suits,' 'Grey’s Anatomy,' and 'Gilmore Girls,' which claimed the top 10 spots in Nielsen’s rankings, marking the first time all top 10 spots were acquired shows. The top 10 library series accounted for a significant portion of streaming viewing, with Suits alone generating over 57.7 billion minutes of viewing after becoming part of Netflix’s library. The success of library shows highlights a shift in viewer trends towards familiar, comfort content, prompting streaming platforms to prioritize deep catalogs and content licensing deals with other media companies.
Streaming TV costs have surpassed cable packages as a result of recent price increases by Apple TV+, HBO Max, Disney, Hulu, and others. The total cost of popular streaming TV services now stands at $87 per month, making it more expensive than cable. Media executives had warned of an impending "crash" as streaming prices became unsustainable. The crash has now arrived, with streaming companies increasing prices or facing potential closure. The heavy losses incurred by streaming companies in their efforts to compete with cable have led to a bruising correction in media stocks.
Anjali Sud, former CEO of Vimeo, has been appointed as the new CEO of Tubi, Fox Corp.'s ad-supported streaming TV service. Sud will officially assume the role on September 1, 2023, succeeding founder Farhad Massoudi. Tubi is one of the leading free streaming TV services in the US, with 64 million monthly active users and a wide content library. Sud's appointment comes after her departure from Vimeo, where she implemented cost-cutting measures and oversaw the company's growth. She is expected to lead Tubi into a new era of creativity, growth, and market leadership.
Netflix is expected to weather the ongoing Hollywood strike due to its strong pipeline of shows and international production crew. While striking actors and writers have forced U.S. studios to halt productions, Netflix's international production capabilities and content from countries not involved in the strike give it a significant advantage. The company's crackdown on password sharing and the introduction of its cheaper, ad-supported plan have also contributed to its subscriber growth. Analysts predict that Netflix's ad-supported revenue could reach $770 million by the end of 2023. Despite the strike, Netflix is set to report its highest second-quarter subscriber additions since 2020.
Hollywood studios and the union representing 160,000 actors are engaged in last-minute negotiations to avoid a potential strike. SAG-AFTRA, Hollywood's largest union, is demanding higher compensation in the streaming TV era and safeguards around the use of artificial intelligence. A strike by SAG-AFTRA would join the ongoing strike by the Writers Guild of America, causing further disruptions in the entertainment industry. Negotiations are taking place amidst financial challenges for media companies, as they try to attract new streaming customers while facing declining television ad revenue.
Negotiations between Hollywood writers and film and television studios are taking place to avoid a strike that could disrupt TV production. The Writers Guild of America may call a work stoppage if a deal cannot be reached. Writers are seeking pay increases and changes to industry practices that force them to work more for less money. The negotiations are taking place against a difficult economic backdrop for the industry, with entertainment conglomerates under pressure to make their streaming services profitable. Late-night shows and soap operas are expected to be immediately impacted if a strike is called.
