Women in prison drama Orange is the New Black will return for its second season on June 6, Netflix announced today. Netflix also slipped in the surprise announcement at the end of its House of Cards Season 2 debut yesterday. All 13 episodes of …
After resurrecting The Killing for a final season after its cancellation by AMC, Netflix is doing the same for Lucasfilm’s Star Wars: The Clone Wars. The streaming service will debut a 13-episode sixth and final installment of the animated series …
Vinessa Shaw (Vegas, 3:10 To Yuma) has signed on for a season-long arc on Showtime’s Ray Donovan. (SPOILER ALERT!) Shaw will play Kate, a Pulitzer Prize-winning journalist for The Boston Globe who is writing a book on Sully (James Woods’ character from last season) and comes to L.A. to investigate his death. She joins recently cast Hank Azaria and Sherilyn Fenn in the upcoming second season of the Mark Gordon Co-produced series. Ray Donovan stars Liev Schreiber as LA’s best professional fixer, the man called in to make the city’s celebrities, superstar athletes, and business moguls’ most complicated and combustible situations go away. Shaw is repped by ICM partners, Thruline Entertainment and attorney Gretchen Rush.
In this week’s podcast, Deadline’s executive editor David Lieberman and host David Bloom look at CBS’ new Thursday night football deal with the NFL; Twitter’s complexity issue with newbies, and Disney’s red-hot quarter fueled by Thor and new franchise Frozen. They’ll also take a gander at those newly available HBO financial details and how they stack up against Netflix, even as Time Inc. braces for layoffs after its imminent spinoff; and question whether Microsoft’s new boss will be much different from the old boss, particularly with the company’s first boss as his new technology adviser.
“We don’t plan on releasing our metrics,” Netflix‘s Ted Sarandos said today. “There’s no benefit to showing we’re beating said network — we don’t need to,” the streaming service’s chief content officer added during the Hollywood Radio and Television Society’s annual programmers luncheon in Beverly Hills. “We’re looking for a proportional success,” he said earlier of what defines success for Netflix. “Because if people vote with their time and their checkbook, they’ll watch,” he noted. “We look at how our shows do compared to other shows,” he added of how Netflix internally assesses its programming. “We know how many hours people watch, the drop-out rates…what devices people are watching on because that says a lot about behavior too.”
“You know in the culture that Orange Is The New Black and House Of Cards are enormous hits,” Sarandos said of two of Netflix’s original series.
Other panelists took a different approach discussing their programming philosophy. “I believe in the tantric form of television,” Showtime’s President of Entertainment David Nevins said. “Slow, steady, don’t want to give it to them too soon,” he added to huge laughter from the crowd. Steamy innuendo aside, the cable exec had been debating over philosophies of TV viewing. Sarandos, not surprisingly, was a big proponent of the binge viewing that has come to define Neflix’s original series like House Of Cards.
The company didn’t make a direct connection to Netflix — but the comparisons, especially in profitability (see chart below), become irresistible now that Time Warner reports results for HBO, previously lumped with Turner networks. This morning’s numbers scratch the surface; other filings should tell us much more. The company intends to take advantage of HBO’s financial firepower: HBO will increase spending and hours for original series in 2014, CEO Jeff Bewkes told analysts. Much of the spending will boost Cinemax, which he calls “an under-appreciated asset” with more viewers than Starz and about about the same as Showtime. HBO, the channel, accounts for about two-third of the operation’s 45M domestic and 85M overseas subs. Execs also noted that subs are growing at a healthy pace, with domestic up by 2M in 2013. International revenues account for 25% of the unit’s total — a number that’s expected to grow. Bewkes says that Netflix, Amazon and Hulu have had “no discernible effect” on HBO so far.
Here’s how HBO and Netflix compare on the top and bottom lines:
Global Showbiz Briefs: Netflix Execs Headed Back To France For Expansion Talks; Patrick Malone Joins Goldcrest Post; More
Netflix Execs Headed Back To France For More Expansion Talks
Last week, Netflix CEO Reed Hastings said the company was eyeing “substantial” European expansion in 2014. His comments came a little more than a month after execs from the streaming service met with staff of French President François Hollande to discuss an entry into France. According to local media reports, Netflix execs now are due to return to France to meet with industry folk within the next week. Pascal Rogard, head of authors’ rights group the SACD, told Le Figaro that the situation is coming into focus with a possible launch later this year. Netflix is available in 41 countries including France’s neighbors to the north such as the UK, the Netherlands and the Nordic region. A French launch has been rumored over the years, but moving into the fiercely protected territory is ornery in part due to a complex film-windows chronology that prohibits movies from appearing on monthly SVOD services until three years after a theatrical release. There is no such protection for TV series, but Netflix’s House Of Cards already airs on local pay-TV leader Canal Plus, which would see the service’s arrival as competition. In a conversation with analysts, Netflix Chief Content Officer Ted Sarandos was asked last week whether the service would be out of certain markets with its key originals because it had already sold them to local providers. “It depends,” he said. “There’s multiple windows, and we’ll continue to have those negotiations as we get closer to those launches.” It’s expected that should Netflix enter France, it would have to adhere to obligations to invest in local content. Culture Minister Aurélie Filippetti told Le Journal du Dimanche this weekend, “Netflix should be an additional player, not a stowaway.” It’s also believed that Netflix is eyeing a move into Germany. With regard to expansion, MoffettNathanson Research’s Michael Nathanson said last week that “it remains difficult to figure out the ultimate size and value of Netflix’s international opportunity” due to the company’s “undisclosed new market entries, minimal transparency and continual reinvestment.”
The company seems to be beyond criticism since last week, when it reported stronger-than-expected Q4 results. That news sent shares soaring about 17%. And today they touched a new all-time high of $407.41 before closing at $406.77 — which is …
Wall Street is so driven by groupthink that I have to take my hat off to Bernstein Research’s Todd Juenger for sticking to his guns this morning about CBS. He’s one of the lonely few analysts who’s neutral about the company’s stock; 21 have a “buy” vs five who have a “hold”. That made him the wallflower at the CBS party: Its shares have appreciated 97.5%, well ahead of the benchmark Standard & Poor’s 500′s 32.7% in the period since late February 2012 when Juenger initiated his coverage with a “market perform” recommendation. The analyst says that he feels like someone who looks at the Mona Lisa and says “Eh, that’s a nice painting.” So why doesn’t he join the pack? He believes that “upside operating scenarios for CBS are either exhausted or fully baked into the stock, but downside risk remains.” Take retransmission consent. He underestimated how quickly the company would collect those fees from pay TV distributors. But now the revenues are “solidly built into expectations.” Showtime grew faster than he anticipated, but he wonders: “How much longer can it keep growing at the same pace?” And CBS’ ratings success could become a problem. “As the #1 network, there will always be the risk of ratings decline, no matter how good CBS’ track record. …There is always some chance the U.S. will wake up one day and no longer be interested in NCIS or CSI. We’re not saying that’s likely. But it is always a risk.”
All eyes on Wall Street are on Netflix today following its startlingly strong Q4 earnings report last night. Shares are up about 17% in early trading — and touched an all-time high of $395.63 — wiping out the 9.4% retreat so far in 2014 for last year’s highest appreciating stock. But while company bulls high-five each other, I’m more interested in how bears deal with the upbeat news. One of the sharpest, Bernstein Research’s Carlos Kirjner (with an “underperform” rating on Netflix), observes this morning that the higher-than-expected growth in domestic streaming subscribers came at a cost: Netflix spent 34% more to market that business than it did in the same quarter last year. ”In other words, Netflix has had to pay significantly more per net add, either because it needed more gross adds to offset churn of a growing base, or because it had to spend more in advertising and promotions. Or both.” That could be worrisome because “the key question” for Netflix investors is whether it can boost revenues by raising its $7.99 monthly subscription price without driving customers away. “Our view is that the answer to this question is no,” which was reinforced by CEO Reed Hastings’ “cautious and noncommittal commentary” on pricing. Kirjner easily has the funniest line of the day (admittedly not a high bar for the analyst community) with a reference to Hastings’ jab at HBO chief Richard Plepler for saying in a recent interview that he’s indifferent if HBO GO users share their password. Kirjner liked that “better than Netflix’s discussion of the S-curve adoption of Netflix’s service, as the password discussion seemed to be more factual.”
2ND UPDATE 2:16 PM: The NPD Group today issued a “data clarification” about its Monday press release that said its study found that streaming services are gaining while premium cable channels are losing subscribers. A day after Showtime refuted those findings, NPD Group said it should not have called our declines for HBO and Showtime.”Upon further examination of the results,” the group said in the release, “there is data supporting the conclusion that individual subscribers are either subscribing to more channels, or adding channels over time.” Here’s the full statement: “A recent press announcement from The NPD Group that was released on Monday, January 20, 2014 (‘Cord Shaving? SVOD Subscribers Increase, as Premium TV Subscribers Decline, According to The NPD Group’) should not have called out declines in subscribers for specific premium TV channels, HBO and Showtime. The data used for the press release pertains to aggregate results for all premium TV channels and does indicate that the overall number of subscribers has declined, based on a representative sample of the U.S. population. However, upon further examination of the results, there is data supporting the conclusion that individual subscribers are either subscribing to more channels, or adding channels over time. In that case, faithful premium channel subscribers are becoming more so – which would be consistent with the subscription increases being reported by individual channels.”
UPDATED 3:14 PM Tuesday: Not so fast, Showtime says. The premium channel issued a release today saying the “NPD Group ‘study’ does not accurately reflect actual subscriber counts.” Showtime says that not only has it added 1M subs in six of the past seven years, but premium rivals HBO, Cinemax and Starz also have increased subs during that period. Here’s the full statement: “Contrary to erroneous reports published this week, Showtime and every other premium network have increased both subscribers and penetrations over the last two years. A study released by the NPD Group claimed the opposite, comparing gains made by video services like Netflix to the performance of premium cable. The study does not accurately reflect actual subscriber counts. According to SNL Kagan, from March 2012 through September 2013 – the timeframe the NPD Group allegedly measured — Showtime penetration grew from 21.1 percent to 22.8 percent; HBO penetration rose from 28.2 percent to 29.2 percent; Cinemax penetration climbed from 11.2 percent to 13.6 percent and Starz penetration jumped from 19.9 percent to 22 percent. While it is true that video services like Netflix have gained, so too have premium cable channels.”