Too Much TV: Your TV Talking Points For Tuesday, July 19th, 2022
About those Netflix numbers....
Here's everything you need to know about the world of television for Tuesday July 19th, 2022.
A PROGRAMMING NOTE
Today's newsletter is a bit shorter than normal. I am doing a number of interviews around the Netflix earnings numbers and I have a bit of a limit to how much I can multitask. But you should see my name in a few places tonight and tomorrow.
ABOUT THOSE NETFLIX Q2 RESULTS
As I suspected yesterday, Netflix's global subscriber losses for Q2 were substantially smaller than the company had been previously guiding. Overall, the company lost 970,000 subscribers vs. expectations of a loss of 2 million. Here is the breakdown by territory:
UCAN: 1.3 million lost
EMEA: 800,000 lost
APAC: 1.1 million added
LATAM: 10,000 added
Netflix is guiding that it will add about one million global subscribers in Q3 (vs the 970,000 lost in Q2). The company says that "retention improved over the course of the quarter and, while churn remains slightly elevated, it is now back near pre-price change levels."
Here are a few other takeaways:
* Adam Sandler's Hustle was the #1 original film in Q2, followed by the Rebel Wilson comedy film Senior Year On the international TV side, the Columbian series The Marked Heart was in the top 10 in 81 countries. The French film The Takedown was in the top 10 in 91 countries.
* In case you think Netflix has changed its mind about theatrical releases & bingeing: "This freedom means we can offer big movies direct-to-Netflix, without the need for extended or exclusive theatrical windows, and let members binge watch TV if they want, without having to wait for a new episode to drop each week. This focus on choice and control for members influences all aspects of our strategy, creating what we believe to be a significant long term business advantage."
* Netflix says it is acquiring Australian animation studio Animal Logic using cash on hand for an undisclosed amount; Animal Logic has about 800 employees.
* Netflix disclosed a $70 million charge related to layoffs in the second quarter.
* It's interesting to see that the company updated its somewhat boilerplate guidance on free cash flow to ""We expect annual positive FCF going forward (with substantial growth in FCF in 2023 vs. 2022)." Guidance looked this way a year ago: "We anticipate being free cash flow positive for the full year 2022 and beyond." I am assuming they are anticipating a "substantial" amount of revenue growth coming from the ad-supported version of the service that Netflix says will be launching in some markets in the first half of 2023.
* The ad-supported tier will also help a great deal with subscribers numbers in the mature markets of UCAN and EMEA. I suspect it will be a big help in retaining price sensitive subscribers, although it will be interesting to see how many subscribers ultimately switch from the more expensive ad-free version to the ad-included tier. Netflix is also stating they expect their ad tier to be a premium ad destination, and in theory that could mean the company could make more per subscription from the ad-included tier than the ad-free one.
Here is more from Netflix on those efforts: "We’ll likely start in a handful of markets where advertising spend is significant. Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one. Over time, our hope is to create a better-than-linear-TV advertisement model that’s more seamless and relevant for consumers, and more effective for our advertising partners."
* Netflix's cash content spend totaled $4.5 billion in Q2, bringing its year-to-date total to $8.4 billion. That compares with $8 billion in cash content spend during the first 6 months of 2021. Total streaming content obligations amounted to $22.77 billion at the end of Q2, up about $400 million quarter-over-quarter. Netflix says that 60% of the net content assets on its balance sheet now consist of internally-produced content.
* There was also some discussion of password sharing: "We’re in the early stages of working to monetize the 100m+ households that are currently enjoying, but not directly paying for, Netflix. We know this will be a change for our members. As such, we have launched two different approaches in Latin America to learn more. Our goal is to find an easy-to-use paid sharing offering that we believe works for our members and our business that we can roll out in 2023. We’re encouraged by our early learnings and ability to convert consumers to paid sharing in Latin America."
My sense is that the “crackdown” on password sharing is more about subtly pushing people into the “add a family member” option, which feels like a good way to add revenue without much incremental cost.
* I'd love to see a country-by-country breakdown of subscriber numbers in APAC, given that India continues to be a sinkhole of ARPU for the entire region. So I'd be interested in learning where those new APAC subscribers came from.
A FUN MAP THAT REALLY DOESN'T MEAN MUCH
Back in October, the data science head of entertainment-centric vMVPD Philo wrote a blog post noting that subscribers in the South were more likely to opt for a horror movie over a romantic one. The Hallmark Channel has been running its "Christmas in July" programming block, so Philo put together a map that shows which states watched Hallmark’s Campfire Christmas as their number one movie last week, and which states opted for TV One’s thriller Stranger Next Door:
ODDS AND SODS
* Season five of Reasonable Doubts premieres Tuesday, August 9th on Investigation Discovery.
* FX has renewed its comedy Breeders for a fourth season.
* Endemol Shine North America is developing an English-language version of the Swedish drama The Truth Will Out with Joe Berlinger.
TWEET OF THE DAY
WHAT'S NEW FOR TUESDAY
Here's a quick rundown of all the new stuff premiering today on TV and streaming:
Aftershock (Hulu)
David A. Arnold: It Ain't For The Weak (Netflix)
Jaws Invasion (NatGeo)
Love Island Season Premiere (Peacock)
The Day the Music Died: The Story of Don McLean's "American Pie" (Paramount+)
The Great Muslim American Road Trip Season Finale (PBS)
Click Here to see the list of all of the upcoming premiere dates for the next few months.
SEE YOU WEDNESDAY!
If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.