The WIR: Disney Edges Closer to Full Control of Hulu, Netflix Forecasts Slowing Subscriber Growth, and ICO Cracks Down on Collection of Children’s Data


In this week’s Week in Review: AT&T sells its stake in Hulu, Netflix isn’t afraid of Disney and Apple, and ICO cracks down on ‘nudging’. To receive an update on the industry’s top stories every Friday, sign up to the weekly Video Round-Up.

Top Stories

Disney Gains Further Control of Hulu as AT&T Sells its Stake
AT&T sold its minority stake in US streaming service Hulu back to the company this week, leaving Disney and Comcast as the final two investors in the business. AT&T sold its 9.5 percent stake for $1.43 billion, valuing the company at $15 billion, much higher than the $5.8 billion it was valued at when Time Warner bought the stake three years ago. But the move is particularly interesting as it brings Disney closer to total control of the streaming service. This time last year Disney, Fox and Comcast owned roughly thirty percent of the business each, with Time Warner owning the remainder. But following Disney’s acquisition of Fox and AT&T (which bought Time Warner last year) selling its stake, Disney now owns over sixty percent. Disney has spoken about Hulu as the third pillar of its direct-to-consumer strategy, alongside OTT sports service ESPN+ and its upcoming Disney+. But Comcast’s stake complicates this – as Comcast would reap the rewards of any investment Disney makes in Hulu.

Netflix Predicts Muted Subscriber Growth for Coming Year, but is Unfazed by Disney and Apple
Netflix beat analysts’ expectations in its Q1 results this week, with Q1 revenues growing 22 percent year-on-year to $4.52 billion, and 9.6 million new subscribers joining the platform in the first quarter. But Netflix shares fell by nearly four percent in after hours trading on Tuesday once the results were announced as the company forecast lower subscriber growth for the year ahead, due primarily to price rises in several markets. But while Netflix expects these price changes to increase churn on the platform, it appeasr less worried about the impact of new rival services Disney+ and Apple TV+. “We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings,” said the company’s earnings report.

ICO Proposes Disabling Social Media ‘Likes’ and ‘Streaks’ for Children
The UK’s Information Commissioner’s Office (ICO) this week laid out sixteen recommendations for “age appropriate design” of online services, which included  a suggestion that ‘nudge techniques’ should be disabled for child users. Nudge techniques are techniques used to encourage users to give up personal data, for example by making the ‘yes ‘ option more prominent (see below). But interestingly, the ICO also includes positive reinforcement techniques (such as ‘likes’ on Facebook and ‘streaks’ on Snapchat) as nudge techniques since they encourage users to stay engaged with the service and allow it to collect more of their personal data. The recommendations are currently out for review – if they’re passed into law, companies which don’t comply could be fined up to four percent of global turnover.

 

The Week in Tech

Comscore Attempts to Ease Investor Concerns
Comscore’s interim CEO Dave Fuller has been attempting to ease investors’ worries following the sudden departure of former chief executive Bryan Wiener and president Sarah Hofstetter, according to the Wall Street Journal. Fuller has reportedly been telling investors that the company will strive to follow the “rule of 40”, a common rule for software companies which dictates that top-line growth plus profit margins should equal more than 40 percent. He also mentioned that the company may look to make acquisitions, though he has clarified that there is “nothing material in the hopper at this time”.

Beeswax Introduces ‘Bid Models’ for Deeper Optimisation
Beeswax this week moved its ‘Bid Models’ feature out of beta testing, which it says allows deeper optimisation of how much a buyer bids for a specific impression. Speaking with AdExchanger, CEO Ari Paparo said that Bid Models lets buyers optimise bids based on up to 40 factors, meaning they could for example bid more specifically for Chrome users reading the finance section of a specific news source during the working day.

Trump Says US Must Win 5G Race
US president Donald Trump announced a new wireless spectrum auction designed to speed up the roll out of 5G in America as he claimed that 5G networks “will absolutely be a vital link to America’s prosperity and national security in the 21st century”. The administration had considered creating national 5G networks using federal money, but is instead leaving it to private companies, with Trump stating that he has “given them the incentive they need”.

The Week in TV

A+E Networks Unifies Direct Sold and Programmatically Traded Inventory
A+E Networks announced this week it is working with FreeWheel to unify its directly sold and programmatically traded over-the-top inventory. A+E will use a “unified decision engine” created by FreeWheel to manage all demand sources competing for a given piece of inventory, which it says will allow it to better optimise which buyer gets the placement. The company says this is importance since video ad decisioning “cannot be determined solely on the highest bid price,” according to a statement from A+E. “An effective video ad decision must also consider TV-level compliance parameters, such as competitive and category separation requirements and user experience considerations, such as ad repetition and relevance.”

Mediaset and ProSiebenSat.1 Deny Merger Rumours
European media companies Mediaset and ProSiebenSat.1 have denied rumours that they are in talks over a potential merger. Reports emerged recently that the two were seeking to combine to create a pan-European independent broadcaster, but Mediaset has put out a statement saying no such talks have taken place, while ProSieben’s CEO Max Conze has also denied talks. Conze says ProSieben is instead concentrating on bolstering alliances with other European broadcasters, such as the European Media Alliance, according to Reuters.

Game of Thrones Returns Bumper Ratings (and Pirated Views)
Game of Thrones returned for its final season on Sunday, attracting its highest ratings for a season premier with 17.4 million viewers tuning in across HBO’s linear channel and OTT apps. Viewing on streaming services had most notably increased since the last season, with the number of viewers tuning in via HBO NOW almost double what it was for last season’s premiere. But while the show continues to draw huge numbers, it’s still plagued by pirates, with analytics firm MUSO estimating that nearly 55 million people illegally watched the show within 24 hours of its release.

The Week in Publishing

Vox Media Buys Epic
Vox Media this week announced it has bought Epic, which includes nonfiction storytelling business Epic Magazine, and Epic Digital, which describes itself as a true story consultancy and content studio. Epic, which had a hand in Academy Award winning film Argo, says it currently has over 40 film and TV projects in development, and marks Vox Media’s first acquisition in the film and entertainment space. “In Epic, I see not only a company known for sophisticated, character-driven work, but also a group of innovators who, like Vox Media, set out to build a new business model to sustain great storytelling — for the benefit of both consumers and brands,”  said Marty Moe, president of Vox Media Studios.

YouTube’s Algorithm Links Notre Dame Fire with 9/11
A YouTube algorithm presented viewers watching content related to the Notre Dame cathedral fire with ‘knowledge panels’ giving them information about 9/11, inadvertently creating a spurious link between the two incidents. The knowledge panels feature, introduced last year, is designed to fight misinformation by identifying sensitive content which might be subject to misinformation, and linking to third party-sources for users to find out more about the topic. Automated tools are used to identify the content, and in this case YouTube’s content recognition may have mistaken the burning building for 9/11 footage, according to The Guardian.

Vimeo Acquires Video Creation Automation Business Magisto
Video hosting platform Vimeo announced this week it has acquired Magisto, a video creation service which claims to have over 100 million users. Magisto says its tech enables simple and intuitive short-form video creation for a variety of mediums, and Vimeo says the two will work together on new short-form video creation capabilities. “Magisto’s proprietary technology enables cutting edge mobile apps and AI-powered editing tools which, combined with Vimeo’s scale and unmatched creator community, will empower more people to tell compelling stories through video,” said Anjali Sud, CEO of Vimeo.

Austria’s Die Press Sees 100x Growth in Pre-Roll Video
Austrian news site Die Presse announced this week it has seen 100x growth in its pre-roll video inventory between 2016 and 2018, from 300,000 impressions to 31 million impressions. Die Presse credits tech platform vi for the increase, which delivers contextual video content to match the page’s content, with video drawn from sources including Euronews, Endemol Shine and Bloomberg.

The Week for Agencies

Publicis Groupe Acquires Epsilon for $4.4 Billion
French holding company Publicis Groupe announced this week it has agreed to buy Alliance Data System Corporation’s Epsilon business for $4.4 billion, Publicis’ largest ever acquisition. Epsilon describes itself as a tech company which specialises in “maximising the value of its clients’ data through combining first-party data with its own data assets, and then using it to personalise multi-channel campaigns. Publicis Groupe CEO Arthur Sadoun said it is these capabilities in scaled personalisation which motivated the acquisition, given “increasing pressure from the rise in consumer expectations, the mainstreaming of direct-to-consumer brands and new data regulations”.

Some however are sceptical of the deal, given the trouble Publicis had with integrating its last big acquisition Sapient, which it bought back in 2014. Sadoun said the integration took three years and described it as “a nightmare” – he will hope Epsilon’s integration goes more smoothly.

Omnicom Organic Revenue Beats Expectations
Holding group Omnicom’s share price rose by up to nine percent this week after the company posted positive Q1 financial results in which organic revenues grew by 2.5 percent year-on-year, above analyst expectations. Net income was down slightly, at $263.2 million in Q1 compared to $264.1 million the previous year, as the business was hit by currency fluctuations, which also caused total revenues to come in below expectations at $3.47 billion, a 4.4 percent year-on-year decrease.

IPA Bellwether Report Sees Marketing Budgets “Bounce Back”
The net balance of marketing executives reporting upwardly revised budgets increased to +8.7 percent in Q1 this year, up from a +0.0 percent reading for the final quarter of 2018 and the highest since Q3 2017, according to the IPA’s latest Bellwether Report. “This sharp increase following Q4 2018’s flatlining signals that UK marketing budgets have received a much-needed kiss of life in an economy gripped by Brexit uncertainty,” said IPA director general Paul Bainsfair. “The smart marketers realise that to grow their businesses, they must invest in them, particularly in mass reach, long-term media.”

Hires of the Week

ESI Media Appoints Andy Morley as Chief Digital Revenue Officer
ESI Media (owner of the Evening Standard and Independent) has appointed Andy Morley as its new chief digital revenue officer. Morley joins from Amobee, having also previously worked at The Telegraph, Grapeshot and Telaria, and will take charge of building international revenues across ESI’s digital portfolio.

Integral Ad Science Names Tony Marlow as Chief Marketing Officer
Integral Ad Science (IAS) this week announced the appointment of Tony Marlow as chief marketing officer. Marlow, who joins from Infogroup, will spearhead market growth initiatives and drive both marketing and communication strategy globally for the verification technology company.

Bjørn Ivar Moen Picked as CEO of Canal Digital
Bjørn Ivar Moen has been appointed as the new CEO of Canal Digital and Telenor Broadcast, moving up from his previous position as CEO of Telenor Norway. Moen will replace current CEO Ragnar Kårhus, who, as previously announced, will take on a new external role after the summer.

This Week on VAN

New Currencies are Causing Broadcasters to Under-Price Inventory says IPONWEB’s Wuttke, read more on VAN

The Percentage of Media Model Simply Doesn’t Work Anymore says Beeswax’s Jones, read more on VAN

Vevo is Shifting to Upfront Sales to Capitalise on CTV, read more on VAN

As the Streaming Wars Heat Up, User Experience is Becoming Even More Crucial says IPONWEB’s Mryasova, read more on VAN

Can Bid Shading Really Deliver for Both Advertisers and Publishers? read more on VAN

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