Too Much TV: Your TV Talking Points For Thursday, February 9th, 2023
Disney decides to cut fat and some of the bone.
Here's everything you need to know about the world of television for Thursday, February 9th, 2023.
PENSKE MEDIA EYES VULTURE AND OTHER VOX MEDIA ENTERTAINMENT OUTLETS
Given the number of acquisitions Penske Media Corporation (PMC) has finalized in the past couple of years, the news it invested $100 million in Vox Media. If that sounds like an off-brand move, in fact it positions PMC to eventually obtain control of some of its biggest remaining rivals in the entertainment and pop culture news space:
While 20 percent might not sound like a big deal at first glance, it makes PMC the largest shareholder in Vox Media and that provides it with a great deal of leverage. And given the deal values Vox at about half the valuation it had when it last raised money in 2015, this also indicates the financial turmoil at Vox is only beginning.
This deal provides PMC (which is a private company still 60 percent owned by founder Jay Penske) potential access to what is arguably the largest collection of entertainment/consumer titles not already controlled by PMC. And several of those titles also have thriving live events arms, another attractive fact for the entertainment news industry's answer to The Borg.
Titles owned by Vox Media include Vox, New York Magazine, The Verge, The Cut, Eater, Vulture, The Strategist, Polygon, SB Nation, Intelligencer, Curbed, Grub Street, Recode, Thrillist, Popsugar, The Dodo, and NowThis.
While PMC doesn't appear to have any direct editorial control over Vox Media at this point, being the company's largest shareholder has its advantages. If Vox Media continues to struggle with revenue growth (and that seems likely), it's easy to see a scenario in which Vox takes its entertainment titles and either spins them off to PMC or does some sort of a joint venture. And given the now diminished valuation for Vox Media, it's not out of the realm of possibility that PMC can team up with the Saudi Arabia’s Public Investment Fund or a larger equity firm to acquire a majority interest in Vox.
The consolidation of any industry is generally bad for the public and for customers. At a time when the entertainment world continues to expand, the last thing Hollywood needs are fewer independent voices and less choice about which views are reported on.
ABOUT THOSE PLANNED CUTS IS DISNEY CONTENT SPENDING
While the headlines about the upcoming changes at Disney have highlighted the 7,000 probable job cuts and a reduction in content spending, I suspect it has escaped a lot of people that the content spending cuts proposed by returning CEO Bob Iger are going to be massive. The goal is to cut non-sport content spend by around $3 billion a year. In an interview today with CNBC, Iger also suggested that Star Wars and Marvel TV titles (the most expensive Disney original content) will be mostly exempt from the cuts. Given that Disney's estimated non-sports content spend for 2023 was scheduled to be around $10 billion, that translates into a 30 percent programming cost cut.
It's difficult to see how that happens without a substantial cut in programming costs at ABC primetime - especially in the drama category. I would not be surprised to see Freeform walk away from most (if not all) of its remaining scripted originals and the Disney Channel's already paltry originals will likely be pared down a bit more.
Disney+ will also likely see most of its non-Marvel/Star Wars originals go away. Especially since the service has struggled to successfully launch anything in that category. Looking at the overall numbers, it will probably also mean a cut of around half of Hulu's non-FX original output, as well as a substantial part of the non-linear premiere FX content. And given that Iger has stated that the company will be focusing its marketing efforts on individual titles, I suspect promotions such as Disney+ Day will be a thing of the past.
The company will likely also pull back on original spending in EMEA, although if Disney+ has any hope of remaining competitive in Asia, it will have to continue to be aggressive with original spending in the APAC region,
But even with all of those cuts, hitting that $3 billion target is going to be brutal. And given that Iger also apparently believes Disney+ is underpriced, it's hard to see how slashing Disney+ original programming while raising prices is going to allow for the subscriber number he is promising.
I honestly have no idea what will happen with Hulu. Iger obviously doesn't want to hand Comcast a $30 billion check for its portion of the streamer. And I can't see that selling it is an option. Comcast would be hard-pressed to pay the true value of Hulu and it's not clear that it even would make strategic sense. And as for Disney selling off Hulu, while that seems to be wet dream for nearly every Disney investor and industry analyst, I have trouble seeing who would step up and buy it. Despite the loss of NBCU next-day programming, a substantial part of Hulu's value is in the next-day availability of ABC and Fox TV primetime programming. And it's unlikely that would available long-term to any possible buyer.
My best guess is that we'll see a substantial cutback on original spending at Hulu, with Disney and Comcast coming to some agreement which provides Comcast with some cash, but still gives Comcast an ownership stake in Hulu. Something which Comcast executives have publicly suggested they would be open to negotiating towards.
NEWS CORP MISSES EARNINGS ESTIMATE, ANNOUNCES JOB CUTS
Media conglomerate News Corp said on Thursday that it would cut 1,250 jobs after it missed estimates for second-quarter earnings due to weakness in its news and digital real estate businesses. That translates to about 5 percent of the company's workforce.
The overall problem seem to be companies cutting back on advertising due to concerns about inflation and the economy. Advertising revenue at News Corp. fell 10.6% to $464 million during the quarter.
LIONSGATE EARNINGS, MIXED BAG ON STREAMING BUSINESS
Lionsgate has released its Q3 fiscal 2023 earnings numbers and the results on the streaming side are mixed: The quarter ended with 11.6 million Starz domestic OTT subscribers, down from 12.3 million subs in Q3. There were 13.3 million Lionsgate+ OTT subs, up 300K from Q3. Total Starz OTT subs of 24.9 million, down 400,000 from Q3. Total OTT subs across all platforms was 27 million, essentially unchanged from Q3.
Interestingly, there was an $80.8 million restructuring charge primarily associated with Lionsgate's Domestic Media Networks' decision to remove certain series from its service. I suspect that refers to the shows canceled and removed from Starz last month.
ODDS AND SODS
* Following complaints from some Turkish subscribers, Netflix has announced it is donating 6 million lira to that country's rescue and recovery organizations.
* Bill Damaschke, who spent 20 years at DreamWorks Animation before going on to bring Moulin Rouge to Broadway, is in talks to lead Warner Animation Group, according to The Hollywood Reporter.
* Netflix Inc. knocked out a patent Wednesday belonging to Broadcom unit CA Inc. and part of a CA infringement lawsuit against the streaming giant.
* The new "high-stakes adventure competition series" Race To Survive Alaska premieres April 3rd at 11 p.m. on USA.
TWEET OF THE DAY
This could be described as "peak Twitter"
WHAT'S NEW FOR THURSDAY:
A Date With Deception (LMN)
Attachment (Shudder)
Dear David (Netflix)
Ex On The Beach Couples Season Premiere (MTV)
Harley Quinn: A Very Problematic Valentine's Day Special (HBO Max)
Home Again: Carole King Live in Central Park (The Coda Collection)
Impractical Jokers (TruTV)
My Dad The Bounty Hunter Series Premiere (Netflix)
NFL Honors (NBC)
Stolen Youth: The Cult At Sarah Lawrence (Hulu)
The Iron River Of Guns (Vice)
You Season Premiere (Netflix)
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.