Too Much TV: Your TV Talking Points For Thursday, July 7th, 2022
What will Netflix's ad-supported tier look like?
Here's everything you need to know about the world of television for Thursday, July 7th, 2022.
WHAT WILL NETFLIX'S AD-SUPPORTED TIER LOOK LIKE?
Netflix rolling out its ad-supported tier sometime late this year is arguably the top streaming industry story of 2022. But other than the fact that it is happening, the company hasn't shared any concrete details of what it might look like, when it will launch or what it will cost.
Because I've written about the company's UX a lot over the past couple of years, I've developed a number of pretty solid sources inside the company. And while I can't share a lot of solid details about what the final product might look like (and what I do know, I can't share yet), I can pass along some of the questions Netflix executives, product managers and engineers have been wrangling over as everyone scrambles to get this done on a very aggressive timetable.
1) How are the ad breaks going to work? I won't even get into the ad tech side of this question, which seems to still be a bit of an internal dumpster fire. Let's just consider how the ads are going to interact with the content. A pre-roll ad is an obvious choice. But do you also include a post-roll ad as the default? In that case, you run the risk of having an extra-long ad break in between episodes. That's the case on Paramount+, which really impacts the customer experience.
Then it's deciding on the amount of advertising and the consensus seems to be towards keeping the ad load extremely light. But there still a lot of questions about how that is going to work in practice. Made-for-streaming shows don't have any natural ad breaks and licensed content that originally aired on broadcast television has too many breaks. You can have the ad tech dynamically insert the ads, but that brings up all sorts of issues of its own. There is a group of people within Netflix that believe the best strategy for now is to do pre and post ads and nothing else until Netflix can build its own internal ad tech. But that approach would leave a lot of money on the table. On the other hand, less obtrusive ads might be really helpful on the subscriber growth side of the business - particularly in mature markets like the U.S.
2) Do you run ads in kids programming? Netflix has a separate UX that is designed for kids and that version of the surface only offers up "kid friendly" programming. At one point, the internal default seems to have been to not include advertising on the kids tier. But now the conversation seems to be "if we include ads, can we insure they are kid-friendly & relevant?"
3) Where does Netflix roll out its ad-tier first? The conventional wisdom outside the company seems to be that the U.S. would be at the top of the list and in a lot of ways that makes sense. The company is facing all sorts of subscriber churn and retention issues in mature markets such as the U.S., so rolling it out here would presumably have a very positive impact. But doing it in the U.S. is also extremely complex, for both technical and licensing issues. There is an internal argument that the ad-supported tier should debut in some smaller markets, giving engineers the chance to tweak the service. There's also concern that a flubbed U.S. launch could have a huge negative impact on the company's stock price and spark calls for changes at the top of Netflix's executive ranks.
But the question of "where" is even more complicated than that. Netflix already offers a discounted mobile-only option in parts of Africa and Asia. One way to really jumpstart subscriptions in those territories would be to either offer a free ad-supported tier or drop the mobile price even further and add advertising as a default. But there are all sorts of ad tech problems with that plan. And some executives apparently worry that Netflix subscribers in mature territories would be unhappy they didn't receive that option as well. To say nothing of the fact that the ad market in Rwanda is very different than the one in France or Canada.
4) What content will be missing from the ad-supported tier? This is especially an issue with licensed content, which in most cases will require a renegotiation of the original deal in order to stream in an ad-supported environment. Netflix reportedly is proposing to just pay a flat premium over the original contracted price. But some licensees are apparently balking at the idea, which may mean that some higher-profile licensed titles (and there are more than you might think) won't be available for streaming on the ad-supported tier.
And these are just some of the issues that are being worked out at Netflix right now. As I mentioned, the ad tech side has its own list of problems. And nearly everyone at Netflix that I've spoken with has complained the company should have devoted more resources over the past few years to these problems. It's another indication that for all of strengths at the top of Netflix's executive pyramid, there have also been some serious missteps.
PROMOTING INTERNATIONAL TELEVISION IS CHALLENGING...ESPECIALLY IF YOU DON'T TRY THAT HARD
As I mention quite frequently, one thing that none of the American streaming services do all that well is consistently promote mid-level international productions. More often than not, these shows just get dumped onto the U.S. platforms, with little to no promotion by the streamer. That's the real magic of Squid Games. Not that it became a worldwide phenomena, but that subscribers found it in the first place.
The latest example of this problem comes from HBO Max, which dumped the French-produced science fiction drama Visitors onto its American service today. While the show seems to have received a bit of promotion in Europe, you would never find it here unless you were looking for it. I was never able to get screeners from HBO Max for the show and in fact, I couldn't even find a publicist who would admit to having any knowledge about it. Based on the lack of reviews, I'm assuming no other critics received screeners either, which is a real shame.
Visitors is apparently the first French drama produced by Warner Television for HBO Max and the series was created and directed by its star, Simon Astier, creator of France 4/Comédie+ series Hero Corp, which ran for five seasons between 2008 and 2017. He most recently directed a number of episodes of the Netflix series Mortel, which ran for two seasons in 2019 and 2020. It follows a rookie policeman in a small French town who encounters two strange lights colliding in the sky. It definitely has a very French cultural feel to it and luckily, it also includes an English language audio dub, which is not always the case for HBO Max acquisitions from Europe. But the show is nicely entertaining and with eight episodes of around 26 minutes each, it's an easy binge. This isn't the next Station Eleven, but it's a solid show that would likely get a respectable audience if more HBO Max knew of its existence.
VULTURE'S STREAMING BUSINESS OVERVIEW
Vulture has posted a bunch of "must-read" pieces on the streaming industry today and I wanted to make sure you read them:
* Joe Adalian's piece with "14 Hollywood Insiders On Who's Winning The Streaming Wars." I agree with most of the takes, although I think industry people tend to overestimate the popularity of HBO's overall programming with the general public, if you extrapolate with what we know about HBO's linear ratings for some of their critically-acclaimed programming. And everyone's scorn over Amazon's UX doesn't surprise me at all. For the people who are relatively new to the newsletter, I've written about this issue a lot. The internal wrangling over the look of Amazon Prime Video's UX is notoriously messy and even a small change such as adding a "free to you" tab can spark endless amounts of negotiations and testing.
The bottom line is that Amazon streaming executives know their UX sucks. But they are willing to take the hit because making a cleaner interface for Prime Video subscribers would severely impact paid rentals and purchases. And given that Prime Video fans aren't likely to unsubscribe just because they hate the interface, the situation is not likely to improve anytime soon. Although the company continues to spin out all sorts of internal attempts at reworking the interface. But none of them have ever received buy in by streaming management.
* Joe also has Vulture's list of "The Hottest Streamer (Right Now)" and it is pretty close to Whip Media's recent list of most satisfying streamers. There wasn't a prediction component, but I'm predicting that next year's list was include the unexpected revival of Netflix and complaints that management problems and budget cuts have stalled the momentum of whatever HBO Max will be called in 2023. Also, while this list rightfully focuses on the U.S. market (given the New York Mag/Vulture audience), the list would quite a bit different if you ranked the overall global winners and losers.
* This piece on streaming ratings is great, in part because it doesn't just focus on Netflix, which is the low-hanging-fruit of complaints about transparency. I especially enjoyed these comments from someone described as having been the showrunner or producer for multiple Netflix shows. This attitude pretty much matches mine, which is why I don't obsess as much over individual ratings as some reporters do:
This whole idea that we as artists actually have agency over the numerical decisions of network studios and streamers is comical to me. We’re literally going out and seeking the patronage of these people — and look, I’m not saying we shouldn’t try to advocate for ourselves. But I find it hilarious that people think, Oh, if only I had more information, I could convince X, Y, or Z to promote my show more. Are the Borgias going to take Michelangelo’s word for how they should allocate their money? It’s ridiculous.
Looking at ratings is a hobby. There is absolutely nothing you can do to make your show more popular based on the ratings of a single week. Your network exec might call and say, “The show needs to be sexier,” but by the time you’ve made that course correction, you will be months away from the original issue. And when you’re working for Netflix or Hulu or Apple or any one of the streamers, you will have delivered your show before it airs. It has always been a black hole. The idea that it is a blacker hole now than it was in 1992 or 1977 is risible. The fact that they gave me the budget to make a show — that buys them the right to interpret that data however they want. We don’t have a right to this information. Money doesn’t give a fuck.
On the other hand, I would recommend to anyone with a show getting set to premiere on a streaming service to allocate time and resources to doing your own targeted promotion. I can almost guarantee that unless you are a high-profile series, your streamer doesn't have the resources (and sometimes desire) to give your show the attention it deserves. And whether your show is binge released and dribbled out one episode at a time, that promotion needs to happen before the show launches. Because those early engagement numbers are going to determine the fate of your show.
ODDS AND SODS
* I really don't agree with this premise, but it's worth reading: Stranger Things Isn't TV. It’s Something Else. The escapist sweep of the Netflix show’s story keeps clashing with its winking plunder of archival pop culture.
* The Entertainment Strategy Guy is predicting for The Ankler that Netflix might report that it lost as many as two million subscribers in the U.S. and Canada alone in Q2. Which is the number Netflix has been guiding as its overall global loss for the upcoming Q2 earnings report. Lets just say that I am not quite as convinced it will be that horrific.
* Does it make sense for Comcast to buy out Disney's share of Hulu rather than the other way around? There is a lot of talk in the piece about why it makes sense for Disney. The case for Comcast buying it is less confident, particularly when the analysts being quoted apparently don't understand Comcast's streaming business:
If Comcast acquired Hulu, it could use Peacock as its free advertising-supported platform, similar to how Paramount Global has paired Pluto with Paramount+, Miller said. Comcast could then move its premium content spend onto Hulu while also building it out as an aggregation distribution platform.
The problem is that Comcast already has an advertising-supported platform in Xumo, and as I noted last week, Comcast recently announced it was donating Xumo as part of a 50/50 partnership with Charter to roll out a nationwide "next generation streaming partnership." So given all of that, it's unclear to me where Hulu would fit into this.
TWEET OF THE DAY
WHAT'S NEW FOR THURSDAY
Here's a quick rundown of all the new stuff premiering today on TV and streaming:
Fatal Flaw Series Premiere (ABC)
Generation Gap Series Premiere (ABC)
Good Trouble Season Premiere (Freeform)
Karma's World Season Three Premiere (Netflix)
Moonhaven Series Premiere (AMC+)
On The Third Day (Shudder)
Press Your Luck Season Premiere (ABC)
The Doctor Blake Mysteries Series Premiere (Ovation)
Visitors (HBO Max)
Click Here to see the list of all of the upcoming premiere dates for the next few months.
SEE YOU FRIDAY!
If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.