TV

Premier League Rights Update

Yesterday evening came news that the bulk of the Premier League packages for 2019-2022 have been sold to the incumbents, Sky and BT. But revenues are actually down this time around.

Sky is paying less than it was previously for a package of 128 matches across the year, both in overall terms, and in the price per game that it pays. Indeed it has a handful more games this time around despite paying less. But that still gets it all the first picks and many of the second ones, and it includes the new Saturday night kick off package.

BT is also paying a little less for the package it currently does for the Saturday lunchtime games, although there are fewer of them this time around which means the price per game goes up.

Overall, with two rights packages still be finalised, total revenues are £4.464bn compared with a final figure of £5.1bn last time around.

The final two packages are still to be determined, with the Premier League saying that there are “multiple” bidders – for which I read that as meaning more than one.

BT is certainly one of these, and it’s conceivable that Amazon would be the other. There’s no real value in Sky buying more – it has enough to persuade subscribers of the value of its package.

But there is a massive problem with these packages, and I’m still really unclear about how the Premier League formulated them.

One package is made up of Bank Holiday fixtures, and a complete midweek round of the Premier League, while the other contains two complete rounds of the Premier League.

Those complete rounds are surely problematical for any bidder? As I said previously, the winning broadcaster gets only two real bites of the cherry for each round of the Premier League. That assumes that matches are split across a Tuesday and Wednesday. So whoever buys the rights has a very limited window to monetise them. The package that includes Bank Holiday games is a little more attractive, since they’re spread out. But the value per game to broadcasters has to be substantially lower than for any other package.

But I wonder if the real reason that these have not been sold yet is because broadcasters are valuing them lower than Premier League does? The Premier League does set a reserve. That’s precisely what the FT is reporting (£) based on its sources.

It’s still possible that Amazon would come in and buy a package:

“Buy a Fire TV stick this Christmas and get free access to Boxing Day football – only with Amazon.”

But digital rights holders would also want to spread those games out across a longer period, and ideally want global rights, not just UK rights.

There’s no way that the final packages raising anything close to the £600m or so that would at least equal what the Premier League achieved last time around.

Unquestionably, these two package were badly formulated by the Premier League. They somehow believed that they would attract digital players who would hand over their hundreds of millions unquestionably, without weighing up the true value of the opportunity. And that hasn’t happened.

No Sense of an Ending

Warning: This piece contains spoilers for the 2014 series Amber, 2014 series The Missing and 2018 series Kiri.

There has been a trend in recent years for drama series to give is slightly more nuanced endings than we have sometimes expected. Perhaps all the questions haven’t been answered. Perhaps its unclear by the end, which characters have behaved in a honourable fashion. We’ve had heroes. We’ve had anti-heroes.

And then there are series where the story just isn’t neatly wrapped up. Sometimes that might because the way the show was produced meant it wasn’t possible (e.g. Lost – where writers needing to write 20 episodes a year neither kept track nor really cared if there wasn’t an ending that made sense), or because the writer wanted to leave things that way.

We know that real life doesn’t come neatly packaged up. A terrible murder is committed, but the police never catch the killer. Years after someone is convicted, evidence shows a wrongful conviction and someone is freed. (How many other wrongful convictions are there?)

A good example of this would be the RTÉ 4-part series Amber. I saw it when it was broadcast on BBC Four in the UK. It follows the story of a young teenager who has gone missing. We saw the story over an extended period of time, starting in the immediate hours and days, and then running into weeks and months after the disappearance. In the end, we never truly discovered what happened to the girl. And that’s probably realistic in many cases of disappearance. Did the person run away? Were they murdered? Who knows.

BBC One’s The Missing also entered similar territory, again leaving us with no satisfying conclusion after eight hours of television.

It’s certainly brave television making. Audiences tend to expect murder series to resolve the key plot points – who murdered who and why. Ideally they also want to see the murderer caught.

I want my television to make demands of me. I know that murderers aren’t all caught, and missing people aren’t always found. There are miscarriages of justice, and there are cases of poor policing.

But that doesn’t really excuse not providing an ending of any kind after I’ve made an investment in a series. Jack Thorne’s Kiri is a case in point. The series is about the disappearance and murder of a young girl. She’s a black child living with white foster parents, but has let the child visit her birth grandparents where the child is able to meet her birth father despite the social worker believing the parent and grandparent to be estranged.

When the child is reported missing and then is found dead, suspicion falls on the father, who has been found guilty of neglect and other drug offences. He runs away, but is persuaded to hand himself in, and due process is then followed.

The tale is tragic on many levels, since a “good” social worker loses her job, the father is revealed not to have been the murderer and true murderer – the foster father – is never caught by the police, his family covering up his heinous crime.

The whole piece is immaculately acted by a strong cast, and the direction gives a good sense of setting around Bristol. This is a classy piece of work. It also examines race, class, social workers and the police. And the story is pacily told. This might be four hours of drama, but it never sits still. The dialogue is authentic and its genuinely a lean piece.

And yet, it didn’t have an ending that could be called in any way satisfying. As the true details of events were slowly released to us as viewers, we obviously rooted for the police to capture the true murderer, and yet as the clock ticked on towards 10pm in the final episode, it was clear that this wasn’t going to happen.

OK. So the murderer gets off. What about the innocent father? Things aren’t looking good for him, despite evidence existing that showed that the foster mother lied to police to put the blame squarely on him. Well we never find out, because the last we see of him is showing up at court.

Is he found guilty? We don’t know.

Does the foster mother, who has had the truth heavily hinted at by her oddball son, leave her murderous husband? We don’t know.

Does the son who knows everything, tell anyone what he knows? We don’t know.

I think it was the fact that we weren’t told the outcome to the trial that really annoys me. Of course life isn’t neatly wrapped up. But there is a court case, and we surely deserve the right to learn what happened. If the series was true to form, the birth father would have been wrongly found guilty, but even that we viewers were denied.

This just left me generally nonplussed by the entire story. While this wasn’t a police procedural, and a series of pat solutions would have been wrong, I just feel that the story really had no ending at all.

Programmes I Know I Should Have Seen But Haven’t – Stuck in Draft #6

Here’s a slightly enlarged piece I wrote back in 2015 or so, but never got around to finishing. So I’ve had a bit more of a bash at it, but still feel it makes the grade as part of my Stuck in Draft series.

In David Lodge’s Changing Places, the English faculty play a game called Humiliation. Basically, they have to name classic of English literature that they’ve not themselves actually read. The winner is the person who’s not read the biggest acknowledged classic.

This isn’t quite the same for me since I’m not teaching “contemporary television” or whatever such a course might be called. But I’ll admit that there are a lot of shows that I’ve not seen which others will be shocked/disgusted/surprised/pitiful that I’ve not seen. Or perhaps I’ve only watched an episode or so, but given up far too early.

Here’s some of the list, concentrating for the most part on drama, and excluding soaps (never seen an episode of Coronation Street) or reality shows (have never watched Gogglebox, for example):

  • Breaking Bad
  • Futurama
  • Mad Men
  • The Good Wife
  • The Crown
  • Peaky Blinders
  • Wolf Hall
  • Big Little Lies
  • The Leftovers
  • Catastrophe
  • Orange is the New Black
  • Modern Family
  • Last Tango in Halifax
  • Boardwalk Empire
  • Deadwood
  • Queer as Folk

Some of these I will get around to, and many I won’t. It’s not a complete list, and just because something’s not on it, it doesn’t mean that I’ve seen all of it. For example, I bailed on The Sopranos before it ended, I got lost with Lost, and I’ve never seen the final season of The West Wing.

At least two of those series are sitting with every episode on my Sky+, while for two others I have DVDs or Bluray boxsets to attack at some point.

But there’s so much decent TV now, let alone all the rubbish TV we would put up with in between the good stuff!

The Olympics: Celebrating Success or Jingoism? – Stuck in Draft #2

I wrote this over a year ago, and never quite got around to publishing it. Hence it now forms part of my Stuck in Draft series.

And so another Olympics have concluded and from where I sit it has been a success.

Let me clarify that a little. Team GB has undoubtedly been successful. But there’s a much wider context when you look at the Olympics.

These include:

  • The cost to the host nation of holding the Olympics
  • The IOC
  • The wider geo-politics of the Olympics (e.g. Russia’s participation)
  • The commercialism
  • The zika virus
  • A green diving pool
  • Competing nations’ reactions

And there are many more besides.

It’s clear that hosting the Olympics is just ridiculously expensive, and it will be interesting to see what happens in upcoming Olympic cycles. Brazil probably thought it could afford the Olympics when they won in 2006, but ten years on, and the world economy had changed not least in Brazil itself.

So while state employees weren’t being paid, and poverty is endemic, millions are being spent, perhaps unnecessarily. Winning both the World Cup and Olympics in a short space of time seems one too many global sports events at the same time.

Beyond that we’ve had the spectre of empty seats in nearly every arena. We know that tickets are vastly expensive for the local population, but surely filling those seats should be a massive priority for any organising committee? Give the tickets away if need be. Surely you make some money back on over-priced snack concessions.

It’s somehow hilarious that Irish IOC member, Patrick Hickey, was arrested for ticket-touting when from several thousand miles away it seemed that availability of tickets really wasn’t a problem (with the exception of the Maracaña for the men’s football final).

And with a reported 12% of Paralympic ticket sales sold so far, there’ll be even more blue empty seats next time around. Recall that Brazil sent the fourth largest team to London in 2012 and were 7th on the medal table. Those would suggest that it’s taken seriously.

The IOC have shown themselves to be essentially unreformed. They couldn’t take decisive action against state doping carried out by Russia, leaving it to the Paralympic Committee to show who had some balls. Sadly the Paralympics are suffering a dire shortage of cash. The IOC is rolling it, but don’t expect any bailouts. “Nothing to do with us squire…”

And they treated the whistleblower of state-sponsored Russian doping, Yuliya Stepanova, with distain. Already in hiding in the US, and not allowed to compete at these games (plenty of other ex-dopers did compete), the president of the IOC, Thomas Bach actually said the following: “We are not responsible for dangers to which Ms. Stepanova may be exposed.”

So to the average Brazilian, the Olympics may or may not have been a sideshow – at least until they won the men’s football final with a Neymar penalty, or the men’s volleyball final. But that doesn’t automatically make the Olympics per se a bad thing.

The British team has done superbly, exceeding the medal total for 2012 – something that’s never previously been achieved after a home Olympics.

They finished second in the medals table (the table being unofficial, and weighted towards gold medals), notably ahead of China.

There are two key reasons for these things: lottery money and China under-performing.

Lottery money is significant. At £4m a medal, there seems to be a fairly direct correlation between Olympic success and the amount a nation invests. In the UK this is funded by state lottery run by a for-profit organisation, Camelot. Most know that when they buy a lottery ticket, they know that some of their cash goes to these athletes and their programmes.

Indeed 25% of lottery money goes to “lottery projects” of which sport gets 20% – so about 10p of every £2 ticket.

And of course, we know that the money is targeted at sports who achieve returns on investment: cycling, rowing, yachting and gymnastics for example. Medals are targeted at almost all costs. In the track cycling, many wondered why the GB team had done poorly at the World Championships in London earlier this year, but so well in Rio. The fact was that even though the World Championships were on home turf, the team had focused on peaking their performances in Rio. If that meant under-performing before then, then so be it. Funding is dependent on Olympic success and no other!

Is that the right way of doing things? Probably not. If GB is unlikely to win medals in your sport no matter what (e.g. basketball), then don’t expect any cash coming your way soon. And while it’s great that we support our athletes and allow them to train rather than hold down multiple jobs while they compete in a world that is mostly unprofessional, that doesn’t necessarily help at grass roots levels. Those pitches and swimming pools still need to be there and accessible.

The scariest single statistic I’ve read in the last few week is that 52% of children leave school unable to swim 25m unaided. That’s simply shocking.

And what about China? Well they under-performed badly, and no doubt there’ll be inquests into why. Possibilities include a natural down-shift following a home Olympics. Everyone raises their game to perform well at home, later metaphorically breathing out when the games are over. GB seems to be bucking that trend, but Tokyo 2020 will be interesting.

There’s also the changes happening in Chinese society. Olympians are bigger stars now – and that brings with it distractions when you perhaps have some money when once you didn’t.

Finally, the cat and mouse game of drugs cheats and drug detection continues. Who knows if that is a reason.

The fact that a peak audience of around 7m people watched the British women’s hockey team defeat the Netherlands on Friday night, or that 2m stayed up until nearly 2am on Sunday morning to watch Mo Farah win the 5000m, shows that the Olympics do bring us together as a nation like no other sports event.

Newspapers are full of Olympic pull-outs and “Gold Medal special editions.” Welcome home parades are being planned for Manchester and London. The BBC Sport website saw record views with 68.3m unique browsers in the UK alone, compared with 39m in 2012.

Something to do with a post-Brexit proudness? I doubt it. If anything, the Olympics gives Britons a two-week holiday from unending political turmoil.

Are we getting value for money for our Olympic success? I’d answer yes. It’s not the be all and end all of what we need to do for sport on a wider level. The broader Olympic “legacy” of 2012 does not seem to have emerged in terms of participation. But I know I’m a lot happier seeing lottery money being spent on gold medals than public money on things like useless “garden” bridges across the Thames.

Finally, is the coverage celebratory or jingoistic? BBC coverage of the Olympics was clearly skewed towards events that the GB team does well in. How else to explain primetime Taekwondo? If you’re a fan of handball or archery, you had to look to the digital channels.

But we’re probably no different to any other nation in that regard. From speaking to friends across the Atlantic, it would seem that from an NBC perspective, there were no other nations aside from the US competing in any event! Then again, with so many US medalists, which you’d expect US TV to cover, that wouldn’t leave a lot of time for anything else.

At least we don’t get the X-Factor style sob-stories attached to every single athlete. How they overcome adversity to get to these games. Etc etc etc.

If I had a criticism, it would be a few too many montages that ran way too long, and were aired way too many times. And when commentators cross the line and become fans, that becomes awkward. That’s especially the case where they’re essentially hoping the non-British competitors make a mistake and get that dive wrong, or fail to clear that fence.

It’s always a problem when many of the commentators are either ex-competitors, and quite often friends of the athletes.

And there’s often too much expectation shown. Despite their quality, we can never be certain in events like Track Cycling or the 10,000m that our guy or gal is going to deliver the goods. Yet they sometimes were presented as nailed on certainties, and that’s simply not the case.

One other thing from a UK perspective.

Can’t we just shift Eastenders to BBC2 for a couple of weeks? It would stop a lot of needless channel changing. Stick the Ten O’Clock news there too. Then there wouldn’t be complaints about the news being delayed (complaints from people who for some reason had access to BBC 1 but curiously not the BBC News Channel, which was happily broadcasting the news at 10pm each night).

Sadly, I’m not sure that this will be an issue in four years’ time since the timings of the games will mean nothing live in peak, and it’s unclear how much digital coverage the BBC will be able to provide under their deal with Discovery/Eurosport.

TV News Channels – Political Pawns

In the last few days, both Sky News and CNN have become tangentially embroiled in ongoing media takeovers. In both cases, there could be an impact on their longterm futures to a greater or lesser extent.

In the UK, 21st Century Fox is trying to takeover complete ownership of BSkyB. In a response to the Competition Market Authority it said:

The CMA should not in its assessment simply assume the “continued provision of Sky News” and its current contribution to plurality

Sky News is widely considered to be loss-making, but nonetheless works well in Sky’s favour in terms of influence. It also obviously provides an alternative news source, has to adhere to impartiality laws, and offers the only rival 24-hour UK news service to the BBC.

Meanwhile in the US, reports place CNN at the centre of a potential block to AT&T completing a takeover of Time Warner. CNN is a subsidiary of Turner Broadcasting, part of the Time Warner empire, and there are suggestions that Time Warner might need to sell this arm to appease the Justice Department. Trump is no fan of CNN of course, calling it “fake news.”

Exactly how profitable CNN itself is, isn’t completely clear. The US version of the channel might be, but it becomes more complex on an international level. But it’s likely that it works well in combination with other Turner properties when negotiating carriage deals.

It sounds as though the case could end up going to court, as it seems likely that both the TV assets of Turner Broadcasting as well as the DirectTV arm of Time Warner (another proposed remedy sale), are key to the basis of the overall acquisition from AT&T’s perspective.

In both instance though, this shows how precarious the news business can be, with proprietors or regulators determining their future in an ever consolidating world. Once news was a highly profitable business to be in, but changes in media consumption have seen business models decline as advertising has shifted online, and there has been less willingness of consumers to pay for news.

And fewer news outlets is definitely a bad thing. When the threat to Sky News emerged, there were a lot of triumphant anti-Murdoch voices happy at the prospect of its closure. That’s despite the channel regularly winning awards, and adhering to tight impartiality rules that all UK broadcasters have to follow. Losing a voice is definitely not a good thing, however much you might dislike a particular presenter.

Likewise, damage to CNN would be a loss in democracy both in the US and globally. Competition keeps everyone honest. And at a time when impartiality is constantly threatened, with well funded government backed outfits from some countries (e.g. CCTV and RT), and other semi-independent broadcasters threatened in other ways (Al Jazeera), independent voices are needed.

Strong, impartial journalism is critical to the foundation of our democracies.

Facebook, Amazon and the Premier League

It’s nearly time for the money-go-round… sorry, merry-go-round, that is the Premier League rights auction for seasons 2019/20-2021/22. We’ve just started the second season of the current deal where Sky and BT between them have spent £5.1bn for the current round of rights. Recall that last time around, this represented a colossal 71% increase in revenues.

That money, allied with ever-increasing overseas TV rights, fuels the UK game. But there were questions about how much further rights could increase next time around. Sky and BT represent the only “broadcasters” who are likely to bid next time around, and assuming that each is broadly happy with its lot, you wouldn’t expect rights to increase substantially.

Indeed, it seems as though the current set of rights have caused some real pain to the broadcasters. Sky has broadly speaking cut back its sports coverage, losing men’s tennis, and reducing rugby union coverage. Anecdotally, it seems that more coverage is coming from Sky’s studios rather than sending production teams to events.

One way or another, Sky has tried to avoid massive increases to consumers, although prices are going up.

So if Sky and BT are fairly maxed out, how do Premier League clubs get some big increases next time around?

Today The Guardian reports that Manchester United vice-chairman Ed Woodward says that Amazon and Facebook will get into the game.

As far as everyone is concerned, these companies bring untold wealth. They could be game-changers – pardon the pun.

Well of course Woodward would say that. And I’m sure that Amazon, Facebook, Google and Apple will run the numbers. But at over £10m a match under the current contract, they’d need a compelling case. With the possible exception of The Crown, that blows all top TV dramas out of the water in terms of costs.

A lot has been made of Amazon taking on ATP Men’s Tennis in the UK from next year. They’re paying around £10m – the same price as a single Premier League match – for a year’s worth of tennis. Sky is said to have wanted to pay less than last time around, so it was to all intents and purposes giving up on the sport. They’d already dropped their US Open coverage.

For Amazon, tennis is a bit of a trial. Perhaps it’ll get them new Prime memberships, or make current members happier. But it’s not a massive cost. It’s not a multi-billion, multi-year commitment.

That’s not to say that one of GAFA won’t buy rights, but that’s a much bigger step. And what does that really get you?

All of this is before considering whether every football-loving household in the UK has enough internet bandwidth to support a live HD (or 4K) stream.

I could be wrong. But I’m not convinced just yet.

Diversity in Media – Measuring Social Class

On Sunday I wrote a piece on Ofcom’s Diversity in Television report, and in particular, noted my disappointment that it didn’t measure social class.

The feedback I got can basically be summed up with the question: “Yes, but how do you measure class?”

So I thought it was worth exploring the issue a bit further.

Measuring social class isn’t easy. What you can’t do is simply ask people to mark themselves on a form. You need to collect proxy information that can provide you with some kind of methodology to measure it.

Here we come to census v survey.

A census is a record of every single employee, whereas a survey is a sample of some of the population. While ordinarily you’d want to measure the responses of all your employees, if your company is big enough then a survey may suffice. Not only that, if you know that some employees are likely to feel uncomfortable answering certain questions, then you’re likely to need to use a survey.

It’s for this reason, by the way, that surveys conducted about sensitive areas such as sex, should be treated with extreme caution, since many do not wish to answer, and indeed may be answering untruthfully.

Of course, there are rightly concerns that this is sensitive data. What right does my employer have to know about my parents’ education, or jobs? And as an employer, do I feel comfortable asking employees to collect this data?

It is sensitive information, and it needs to be collected and measured responsibly. So that probably means that it shouldn’t sit as a field in an employee’s record on an HR system, anymore than you’d record someone’s sexual orientation or religious beliefs on such a system.

Yet we also collect data on those sensitive areas. It’s usually collected in survey form, and on an anonymised basis. The collection is probably best handled by a third-party specialist research company who can assure employees that the data is not being used for anything other than measuring diversity in the workplace.

It’s important that social class data is collected as it impacts on many behaviours across societies. So while it’s hard to do it, groups like the Office of National Statistics have to collect this data, and indeed they have their own methodology for doing so. Notably, these are based around employment status (employer, self-employed or employee), organisational size and supervisory status (does a person supervise others, and in what context?).

As The Guardian reported over the weekend, the BBC has made the decision to use a staff survey which measured parents’ occupations, noting that its staff showed a higher likelihood of their parents having achieved higher managerial and professional occupations than the wider population, suggesting a class imbalance compared with the wider population.

Now it’s certainly true that an organisation the size of the BBC is able to get an external research company to measure such indicators, and provide norms to compare against. But Ofcom’s report was based on UK broadcasters who all had turnover’s of £1bn or more, so I’d argue that each of them is in a position to do a similar job.

On the other hand, a small indie isn’t in such a position, and the size of that indie might make such data relatively meaningless anyway.

Yet if the media industry is serious about diversity, then this does need measuring, and doing so on a pan-media basis with some central funding, could mean that the broader industry could be surveyed.

Mind you, as a friend of mine said to me, if you banned unpaid “internships” tomorrow, it may fix the problem quite quickly.

Diversity in UK Media – Ofcom’s Report Doesn’t Go Far Enough

Last week Ofcom published the first in what it says will be a regular series of reports into diversity and equal opportunities in television. It focuses on the biggest UK television broadcasters: BBC, Channel 4, ITV, Sky and Viacom (owner of Channel 5 amongst others).

Diversity remains a key concern in the media industry, from representation throughout media organisations, to issues surrounding pay discrimination based on sex.

But I really do have a bone to pick with this, and nearly every report on diversity in UK broadcasting. They don’t go far enough.

Sharon White, Ofcom’s CEO says in her introduction to the report: “Too many people from minority groups struggle to get into television. That creates a cultural disconnection between the people who make programmes, and the many millions who watch them.”

This is undoubtedly true, despite schemes that are set up across the industry.

The report breaks employees into the following categories:

  • Gender
  • Racial group (BAME)
  • Disability
  • Age
  • Sexual orientation
  • Religion and belief

The report dutifully compares each of the measured broadcasters against both the population at large, UK based industry, and the average amongst the peers. From this we see, for example, that Channel 4 does well amongst BAME staff, while Viacom does well with women in leadership roles.

But there’s a glaring hole in this analysis, and it’s one that pervades UK media.

Social class.

It’s just not measured. And without that we’re missing something fundamental from our broadcasters.

I’m not saying the other factors aren’t important – they are. And sometimes those other measures can be indicative of social class. But while media has a widely acknowledged considerable issue with new entrants coming into the sector, unless they’re supported by family members (bank of mum and dad), and can support themselves in London while they do unpaid “work experience”, then for all those other measures, we’re going to only get people who come from wealthier backgrounds.

Everybody knows this. It was mentioned in a good episode of The Media Show from the RTS Cambridge TV Festival this week.

So I’m not at all sure why it’s not included in Ofcom’s report. It’s critical that this is measured to truly show diversity in the media.

[UPDATE: I wrote a follow-up to this piece, detailing some ways this data could actually be collated.]

Netflix and Disney

Last week came news that Disney would be pulling its movies from Netflix at the end of the current arrangement, and that Disney would in future launch its own streaming service. This licensing agreement generated a vast amount of coverage, much of it ill-informed, and ignoring wider issues in the market.

There are a few key issues to discuss here.

Disney Films on Netflix

Netflix originally signed a deal with Disney back in 2012, whereby Netflix took over from a previous Pay TV deal Disney had with Starz. Library films became available immediately on the streaming service, while Netflix gained the Pay TV window rights for new Disney movies (including Marvel, Pixar and Lucasfilm) released theatrically from 1 January 2016. In reality, that means first-run films would appear from late 2016 when the Pay TV window opened.

A Note on Windowing

It’s probably worth detailing how movie studios traditionally “window” their wares.

The Theatrical Window is usually first, and theatre owners demand that films don’t get released for usually three to four months (it varies by territory, with countries like France enforcing much stricter rules). Then is the so-called Video Window with digital pay-to-own (e.g. iTunes or Google Play Video) and physical DVD and Blu-ray releases. The former is often released a week prior to the latter. Then, a few months later, comes the Pay TV window, when films end up on premium cable and satellite channels like Sky Movies in the UK, or Starz in the US. After that initial Pay TV window, films may then go into a Second Window with perhaps a free-to-air broadcaster, or streaming service like Netflix or Amazon Prime.

Obviously with both Netflix and Amazon active in making and acquiring films, they can choose to either go straight to streaming, or miss out some of the other windows. And there is talk of a Premium Video On Demand (PVOD) window between 30 and 45 days after theatrical release that would be priced high for early streaming access. Theatre owners worry about such things because if you know you only have to wait thirty days, then you might not bother going to the cinema to see a new film.

The key thing throughout all of this is that films tend to get less valuable as the windows progress.

At the time of the Disney deal, media estimates were that the deal was probably around $300m a year for Disney, and was seen as a good deal for all concerned. Netflix paid big, but got big films as a result. Disney dramatically increased what Starz (or HBO or Showtime) would have paid, but as a studio they couldn’t miss with their Marvel films alongside the relaunched Star Wars series, as well as their high-performing Disney and Pixar output.

Now the deal is coming to an end, and films released from 1 January 2019 will not appear automatically on Netflix. Furthermore Disney is launching its own streaming service. More on this latter point below.

Cue lots of words about how this could be the beginning of the end of Netflix. The thinking is that if Disney can do this, then surely others can too. And that breaks Netflix’s model.

Well only up to a point.

It’s worth reiterating that this was a US only deal. The deal does not, and did not apply elsewhere. That’s not to say that Disney material hasn’t and doesn’t appear in other territories. It does. Star Wars: The Force Awakens was released just ahead of 1 January 2016, so didn’t make it to Netflix US. It did appear on Netflix in Canada however. Meanwhile Netflix UK has a number of Marvel films on its service, although these are second window films. They have already had runs on Sky as part of Sky’s deal with Disney (In the UK, Sky has exclusive Pay TV deals with most of the major US studios, usually locking out competitors for twelve months).

In Netflix’s recent earnings release, they reported that they had 94.36m paid memberships of which 49.38m were in the US. That leaves 44.99m outside the US, and that’s important. Within the next two or three quarters it seems likely that international will outstrip the US in terms of paid subscriptions. While that isn’t reflected in profits (international rollout is expensive), it’s important to remember that Netflix US is not the same as other versions of Netflix. Due to the way that the entertainment industry has historically worked, rights are sold on a territory by territory basis. Furthermore, different studios may own the rights to different films in different territories.

What this all means is that while Netflix losing Disney seems like a big deal, on further examination its notable that the deal didn’t extend to other territories. And those territories are growing just fine without Netflix serving up first-run Disney films.

Disney Already Streams

The other big part of this was that Disney announced that it’d launch a new Over The Top (OTT) streaming service once the Netflix deal ends.

A fact that has escaped many – including a large number of British news reports – is that Disney already has a streaming service. It’s in the UK, it’s called DisneyLife, launching at the end of 2015. Originally priced at £9.99 a month, making it more expensive than Netflix, in time it dropped its price to a more palatable £4.99. For that you get unlimited streaming access to Disney and Pixar movies, as well as all Disney’s TV programming. That amounts to about 400 movies available. The TV programming is both live and on-demand box sets. The service also offers Disney music and audiobooks, and it offers a 10% Disney Store discount.

That all said, new Disney films still get onto Sky Movies before they reach DisneyLife (in other words, the service doesn’t offer first run films during the Pay TV window), and Disney still sells its top films to free-to-air broadcasters like the BBC. I assume that maximising audience also means maximising merchandise revenues from those later rebroadcasts.

Whether Disney renews its Sky agreement in the future, or goes it alone in an attempt to bump up overall revenues will be worth looking out for. But it would seem that the UK has been used as a beta test market for the newly announced Disney service.

(Note that DisneyLife is a different service to Disney Movies Anywhere, which is Disney’s own brand download-to-own digital service.)

It’s notable that the UK DisneyLife does not include Marvel or Lucasfilm output. That’s likely to be either because Disney already had lucrative deals in place with Sky or others at the time of launch, or that including that output it doesn’t make quite as “clean” a service. The audience for Frozen is different to the audience for Ironman.

Perhaps, in time, Disney will want to include these properties in its streaming service, but I’m not sure. The core Disney (and Pixar) offering is very defined and a parent subscribing knows what they’re getting from a service. Offering a film like Deadpool (15 rated in the UK; R rated in the US) would not work. Yes — I know Deadpool is a Fox film and not formally part of the “Marvel Cinematic Universe,” but the possibility of R rated Marvel material is still there. Season 1 of Jessica Jones was rated 15 for its DVD release for example.

Finally, Disney just bought BAMtech, the streaming specialist company that was originally set-up in-house for Major League Baseball to stream their fixtures. It was spun off by them to offer streaming support to many companies around the world, and now Disney has bought it ahead of a larger rollout of a streaming service. Doing streaming well is hard as many companies have learnt to their costs, so this pay prove to be a very wise investment.

Disney Going It Alone is not Replicable

The reason that Disney is able to even contemplate a full-service streaming offering is because it has uniquely strong branding. Even the very youngest Disney film viewer quickly learns the name of the studio it comes from. They want to visit Disney Stores or visit Disney Theme Parks. I’m not at all sure that other studios have such significant branding across a wide range of output.

For example, do you know which studio is responsible for the Despicable Me franchise and its related Minions? How about Kungfu Panda? Or Shrek? Or Lego Batman?

All of those have been incredibly successful properties, but they don’t have the same consumer recognition at a studio level. I’m not saying that they couldn’t try to do the same, but that it would be hard. Most consumers, unless they work in the industry, have little to no knowledge of which studio produced which film. In today’s world, where budgets have soared, there are now multiple opening production logos at the start of feature films usually indicating many companies have stumped up the budget. What films would even be in Dreamworks or Universal branded OTT offering?

The regular concern you hear about Netflix is that its reliance on third party programming leaves it vulnerable. What if other studios pulled their output to get onto

I’m not saying that Warners, for example, couldn’t launch an OTT service off the back of their DC Universe films, but that might be a bit of a stretch. A handful of Batman, Superman and Wonder Woman films does not make a full service, even if you throw in some animated and direct-to-DVD material.

A case in point might be Sony’s Crackle service which, although advertising funded, has not really broken through in the years it has been operating. Perhaps its biggest original hit, Comedians in Cars Getting Coffee with Jerry Seinfeld is moving to Netflix.

How Many Streaming Services Are Sustainable Anyway?

In the US, the market seems to have reached the point where cable cords are being “cut” in sufficient numbers to be of major concern to the industry. Where once a consumer might spend $100 a month on a few hundred channels, only a few of which they actually watched, they’re now increasingly choosing a mixture of “skinny bundles” (Perhaps $20-30 a month for a handful of key channels, possibly internet streamed), and OTT services (Perhaps HBO Now to get Game of Thrones and Veep, or CBS All Access for The Good Wife spin-off, The Good Fight, and the upcoming Star Trek: Discovery – which notably will be a Netflix exclusive outside the US). Currently, that’s a cheaper option than the $100 bill. But how many services cumulatively would a household buy?

In the UK, the market is slightly different, but beyond Netflix and Amazon, I could also subscribe to Now TV (for subscription free Sky TV), or something like Mubi for arthouse films.

Amongst many others, the BBC and ITV recently launched BritBox focusing on UK shows that are otherwise not sold to US broadcasters. There it competes with Acorn TV’s similar streaming offering.

Meanwhile sports organisations and channels from MLB to the NFL, and the NBA to NBC Sports Gold offer paid OTT options.

How many of these individual packages is one household likely to pay for? 2? 3? 5? More?

NBC has recently announced the closure of its comedy-focused Seeso network, when many might have thought that it was NBCU’s foot in the door into the paid streaming marketplace.

It’s worth remembering that the cable bundle offer meant you get quite a lot for your money, even if you don’t watch much of it. For example, perhaps you don’t watch the food TV channels

A la carte OTT offerings mean that if you’re not interested in food networks, then you don’t subscribe to them. The corollary of that is that if you do want to watch food TV networks, you’ll probably have to pay more to see them.

The economics of 100m US cable subscribing households all contributing perhaps $0.50 a month to make the channels viable with a monthly revenue of $50m. If only 5m viewers choose to watch, they would need to pay $10 month to achieve the same revenue for those channels.

It seems likely that a lot of more niche channels will become unviable without a significant number of subscribers prepared to pay a significant fee to see them.

Netflix in the Future

Netflix has made so secret of wanting to own more of its own programming. Whether it can become completely dependent on acquired programming is questionable, and perhaps isn’t really in its business plan. But beyond the not-insignificant production costs which are eating money, once it has built up a significant library, it becomes a more attractive proposition. That is, assuming that future generations will still be at least partially interested in today’s television. While Dumbo and Snow White are ageless, it’s not clear that the same is true of House of Cards.

Netflix’s international ambitions are not insignificant either. To achieve success in these markets invariably means locally produced programming. Making locally produced shows in France, Germany, India, Brazil and the UK is not cheap. But to break properly into these markets, that’s what Netflix has to do, and that does mean a huge cash burn.

It would be a fool who tries to predict the future of a company like Netflix, and I’m not a fool!

However, I don’t see the end of Netflix’s Disney deal as nearly as groundbreaking as some would position it. Netflix probably does need to broaden its portfolio in terms of earning income. Notably they made their first acquisition last week buying the comic company Millarworld which gives them access to a number of comic book characters as well as opening a new revenue stream. It seems that owning a comic-book franchise is critical for any serious studio. Could this be the start of a wider investment portfolio which supports the main subscription offering, but provides some diversity of income?

Free to Air Cricket

Today brings some interesting news, with the ECB actually allowing some free-to-air cricket on TV screens in the future. The BBC has done a deal to see the return of cricket to its channels for the first time since 1999.

You will recall that in 1998, Channel 4 secured the rights to most international cricket, notably including Test cricket. One Test was aired on Sky, who until that point had made do with smaller competitions and notably overseas tours.

In many respects Channel 4 really improved TV coverage, and despite some awkward business of trying to show both cricket and Channel 4 Racing on the same afternoons (with Film 4 often being used as an overspill channel), they were very successful.

In its final season Channel 4 saw a peak audience of over 7m watch England win the 2005 Ashes. Thousands turned out for an open-top bus parade that ended in Trafalgar Square.

Cricket was on top.

And then, for the most part, it disappeared from our screens. Sky had outbid Channel 4 for exclusive coverage of all domestic cricket. The ECB had taken Sky’s cash ahead of any interest in keeping the game alive.

The ECB continued to work exclusively with Sky renewing deals right through until 2019.

The only free-to-air cricket that appeared on our screens were Channel 5’s highlights packages and some IPL cricket on ITV4 (Which has since also moved to Sky). There’d be an occasional tourist game against Scotland on the red button but that was it.

Earlier this year, the BBC did show highlights of the ICC Trophy, and we have also seen some in-game digital clips appear on the BBC website. But for live cricket, you “only” had the unparalleled Test Match Special.

In the meantime participation in cricket had fallen, and most counties were now propped up financially by the ECB.

T20 had come along, and while the riches of the Indian Premier League might seem impossible to replicate in Britain, the success of Australia’s Big Bash seemed distinctly replicable.

That tournament runs for 35 nights in a row on free-to-air Channel Ten, garnering significant audiences for its city-based franchise structure. (It should be noted that Channel Ten is suffering severe financial pressures currently, and either rival Channel Nine will win the rights next time around, or some of the games may go subscription only).

So the ECB has now conjoured up a city-based franchise format, meaning that some big counties will miss out and need to be paid off. That also means that the new format will be in addition to the existing T20 Blast series which will continue to be competed at county level.

And then of course there are the existing four day County Championship games as well as one day competitions, all of which need to be squeezed into the cricket season.

Add into the mix central contracts, extended period of Big Bash, IPL, one-day internationals, T20 internationals and Tests, all of this means that big names are rarely seen in their “home” counties.

Still, that’s the mess of contemporary cricket.

Which all brings us to today’s news that the BBC has done a deal for cricket with the ECB. It doesn’t start until 2020, because Sky still has exclusivity until 2019. But the BBC will be showing:

  • Two England men’s home T20s (of a total of 4-6?)
  • One England women’s home T20
  • 10 matches from the domestic men’s T20 city-based franchise series, including the final (out of a total of 36 matches, all of which will be on Sky)
  • Up to 8 matchs from the women’s T20 city-based franchise series including the final
  • Highlights of home Tests, One Day Internationals and T20 Internationals
  • Highlights of women’s internationals
  • Digital clips of men and women’s internationals, plus County Championship, One-Day Cup and T20 matches
  • Test Match Special wins radio rights to all competitions through until 2024

So the live coverage will exclusively be T20 formats, with other competitions receiving highlights treatment.

Sky has regained rights to everything else, including exclusive live coverage of home Tests. BT Sport, which is thought to have bid, has not come away with any rights. Notably, it has bought rights to Australian cricket meaning that it will be the exclusive rights holder to the Ashes Tour this winter (assuming the massive pay dispute there is sorted out).

In total, the deal is said to be worth £1.1bn over five years – quite a jump from previous deals, with Sky’s last deal £260m over four years, and then extended a further two. That said, there wasn’t significant growth over the last two deals. This all suggests Sky sees a great opportunity in the new T20 competition.

Still, this all goes to show that getting eyeballs in front of your sport is essential if you want to see any significant growth in it. And perhaps other sports will learn from this.

The ECB has learnt the hard way.