Too Much TV: Your TV Talking Points For Wednesday, June 8th, 2022

I finally get the chance to reference Fox's "World Idol"

Here's everything you need to know about the world of television for Wednesday, June 8th, 2022.

PROGRAMMING NOTES
Tomorrow's newsletter will include a streaming service UX feature wish list. If you have a feature you'd like to see on your favorite streamer (or rant about one that drives you crazy), reply directly to this newsletter or email me at rick@allyourscreens.com

IS NETFLIX LOOKING TO ACQUIRE ROKU?
Shares of Roku jumped about 11% early Wednesday in pre-market trading following speculation the streaming device manufacturer and AVOD platform operator is in possible merger talks with Netflix. The rumors followed news reports Roku had halted employee stock trading.

Much of the talk seems to be the result of this piece in Business Insider (subscription required), which reports that some Roku employees are convinced the company may be acquired by Netflix.

Netflix and Roku have a long history in streaming, going back to 2007 when Roku was spun out of Netflix after the company decided not to move forward with a set top box that would stream Netflix content. The decision led Anthony Wood, who was then Netflix's VP of Internet TV, to leave the company and launch Roku. And a proposed merger certainly fits into current conventional wisdom of "Netflix had a bad quarter, so it must do something crazy." 

But I am not convinced.

Now I won't claim to be infallible and I am certainly wary when I find that one of the only industry analysts that seems to agree with me is LightShed's Rich Greenfield. But this merger seems like an unlikely idea, for a variety of reasons.

First, let's focus on the financials. Netflix stock has already been beaten like a pinata in recent weeks and Roku is not a profitable business. The company guided to a 4% adjusted EBITDA margin in 2022, implying a negative operating and net margin. Roku had a market cap of about $12 billion before merger rumors emerged, so any acquisition by Netflix would likely cost somewhere between that figure and perhaps $18 billion. Given that Netflix has less than $6 billion of cash on hand and is already carrying $14.5 billion of long-term debt, it would have to go to outside funding to close the deal. While I suspect they wouldn't have a huge problem getting the financing, that move would dilute the stock of current shareholders, who have already had a financially stressful quarter or two.

Secondly, the two two companies aren't all that compatible, particularly if you know much about Roku's business model. Yes, Roku has mature ad-tech and that is apparently why the streamer recently began talking with Roku about some sort of partnership, given that Netflix is preparing to launch its own ad-supported tier.

But there's a big jump from getting ad-tech help to doing a merger. One of the biggest impediments is that Roku is also a hardware business and Netflix has steadfastly refused to get into that business. And that reticence has always been because of the natural tension between streaming services and the platforms that carry them. Netflix has worried that owning one of the major platforms (at least in the U.S.), would cause carriage problems with other streaming services that are currently available on Roku. 

I don't think those fears are unreasonable. In the past two years, Roku has had carriage problems with NBCU Universal, YouTube, HBO Max and Spectrum. And that was before those companies were faced with the prospects of rival Netflix having access to data from subscription services billed through the platform. To say nothing of all the ad data complications that arise from Netflix owning Roku.

But a larger question is why Netflix would want all of Roku? Yes, Roku's ad-tech experience would be especially helpful to Netflix and Roku has built a nice stable of cheap but engaging content. Although that content doesn't seem to fall into Netflix's goal to be the home for original programming along with some carefully curated licensed content.

But the hardware business is difficult. The margins are low, the competition is fierce and the challenges from upstart smart TV companies is real. Even worse for Netflix, the lion's share of Roku's 62 million customers are in the U.S., a mature market where Netflix faces an uphill battle to increase subscribers. 

Netflix owning Roku sounds nice on the the face of it, but the more you examine the idea, the less sense it makes overall.

Which probably means that a deal is right around the corner.

WHY 'STRANGE WORLD' WILL BE RELEASED DIRECTLY TO DISNEY+ IN FRANCE
I've written a great deal about how the streaming business overseas looks very different than it does in the United States and yesterday I wrote a bit about local content requirements that have had the effect of pushing more production into local markets from Hollywood. 

But there are a number of other local laws that are also frustrating the major American streaming services and one of them is France's so-called chronologie des medias rules. The law forces studios like Disney to wait 17 months before they can release movies to Disney+ after a theatrical release, following a four month purchase and exclusive six-month Canal+ window. Disney+ can then only keep it for five months, as it goes to free-to-air channels like TF1 and France 2 for a 14-month period. Once that window ends (36 months after the theatrical release), it reverts back to Disney+.

So Disney has decided to release the movie directly to Disney+ in France, bypassing the French requirements. The film - named Avonlea: The Strange Journey in France - will bypass French theaters entirely, which is a pretty aggressive move by the company.

Disney also released a strongly worded statement about the decision:

“Strange World will be available to all Disney+ subscribers in France, foregoing a French cinematic release. While we support French cinema — and have for decades — the new, cumbersome media chronology is anti-consumer, ignoring how behavior has evolved over the last several years and puts us at increased risk for piracy. We will continue to make decisions on a film-by-film basis and according to each market’s unique conditions.”

It's worth noting that when there are discussions about theatrical windows for new movies, that window looks very different in countries such as France. A newer version of the chronologie des medias rules cuts the window from 17 to 14 months and while some other companies have agreed to the update, it was not signed by Disney.

That's another impediment to streamers such as Netflix who are considering a theatrical release for some of their original films. Releasing a movie into theaters in countries such as France would lead to its unavailability on Netflix for more than a year. So it's very likely that in case of a theatrical release, Netflix would follow the lead of Disney+ and release the film exclusively online to get around the restrictions.

BTW, one fun fact I discovered my research: the new Netflix original movie starring Adam Sandler called Hustle (which premieres today) is apparently called Top Of The Basket in France.

CBS ANNOUNCES REALITY ALL-STAR LINE-UP FOR 'THE CHALLENGE: USA'
CBS has released the names of the 28 contestants for the July 6th premiere of The Challenge: USA, which is the broadcast premiere of the MTV global franchise.

The contestant list includes Survivor winners Tyson Apostol, Ben Driebergen and Sarah Lacina, Big Brother winner Xavier Prather, The Amazing Race winner James Wallington and Love Island winner Justine Ndiba. 

One interesting aspect of this is that the winner of the show will also go on to compete on The Challenge: Global, which pits the winners of various iterations of the show from other territories. That series will stream on Paramount+ sometime later this fall and it reminds me a bit of the one-off special World Idol, which pitted the winner of American Idol against the winners of various Pop Idol shows from around the world. That special is most notable for having Kelly Clarkson's take on "(You Make Me Feel Like A) Natural Woman" come in second to a guy from Norway singing a U2 song.

ODDS AND SODS
* Kate Bush has the first top ten hit of her career, thanks to Netflix's Stranger Things.

* Kenan Thompson will return as the host of the 2022 NHL Awards on Tuesday, June 21st.

* Prime Video has ordered a second season of The Summer I Turned Pretty, ahead of the series' Season One premiere on June 17th.

* The German police procedural series Faster Than Fear is premiering Thursday, June 23rd on Topic.

* Season three of The Dog House UK premieres Thursday, June 16th on HBO Max.

* An eight-episode docu-series about boxer Mike Tyson entitled Mike will premiere August 25th on Hulu.

WHAT'S NEW FOR WEDNESDAY
Here's a quick rundown of all the new stuff premiering today on TV and streaming:

Baby Fever (Netflix)
Bargain Block Season Premiere (HGTV)
Gladbeck: The Hostage Crisis (Netflix)
Hungry For Answers Series Premiere (Discovery+)
Hustle (Netflix)
Keep Sweet: Pray And Obey (Netflix)
Ms. Marvel Series Premiere (Disney+)
The Deep End Season Finale (Freeform)
The Janes (HBO)

Click Here to see the list of all of the upcoming premiere dates for the next few months.

SEE YOU THURSDAY!

If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.