April 22, 2019
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3 fixes for Netflix’s “What to watch?” problem

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Wasting time every night debating with yourself or your partner about what to watch on Netflix is a drag. It burns people’s time and good will, robs great creators of attention, and leaves Netflix vulnerable to competitors who can solve discovery. A ReelGood study estimated that the average user spends 18 minutes per day deciding.

To date, Netflix’s solution has been its state-of-the-art artificial intelligence that offers personalized recommendations. But that algorithm is ignorant of how we’re feeling in the moment, what we’ve already seen elsewhere, and if we’re factoring in what someone else with us wants to watch too.

Netflix is considering a Shuffle button. [Image Credit: AndroidPolice]

This week Netflix introduced one basic new approach to discovery: a shuffle button. Click on a show you like such as The Office, and it will queue up a random episode. But that only works if you already know what you want to watch, it’s not a movie, and it’s not a linear series you have to watch in order.

Here are three much more exciting, applicable, and lucrative ways for Netflix (or Hulu, Amazon Prime Video, or any of the major streaming services) to get us to stop browsing and start chilling:

Netflix Channels

For the history of broadcast television, people surfed their way to what to watch. They turned on the tube, flipped through a few favorite channels, and jumped in even if a show or movie had already started. They didn’t have to decide between infinite options, and they didn’t have to commit to starting from the beginning. We all have that guilty pleasure we’ll watch until the end whenever we stumble upon it.

Netflix could harness that laziness and repurpose the concept of channels so you could surf its on-demand catalog the same way. Imagine if Netflix created channels dedicated to cartoons, action, comedy, or history. It could curate non-stop streams of cherry-picked content, mixing classic episodes and films, new releases related to current events, thematically relevant seasonal video, and Netflix’s own Original titles it wants to promote.

For example, the comedy channel could run modern classic films like 40-Year Old Virgin and Van Wilder during the day, top episodes of Arrested Development and Parks And Recreation in the afternoon, a featured recent release film like The Lobster in primetime, and then off-kilter cult hits like Monty Python or its own show Big Mouth in the late night slots. Users who finish one video could get turned on to the next, and those who might not start a personal favorite film from the beginning might happily jump in at the climax.

Short-Film Bundles

There’s a rapidly expanding demographic of post-couple pre-children people desperately seeking after-work entertainment. They’re too old or settled to go out every night, but aren’t so busy with kids that they lack downtime.

But one big shortcoming of Netflix is that it can be tough to get a satisfying dose of entertainment in a limited amount of time before you have to go to bed. A 30-minute TV show is too short. A lot of TV nowadays is serialized so it’s incomprehensible or too cliffhanger-y to watch a single episode, but sometimes you can’t stay up to binge. And movies are too long so you end up exhausted if you manage to finish in one sitting.

Netflix could fill this gap by bundling three or so short films together into thematic collections that are approximately 45 minutes to an hour in total.

Netflix could commission Originals and mix them with the plethora of untapped existing shorts that have never had a mainstream distribution channel. They’re often too long or prestigious to live on the web, but too short for TV, and it’s annoying to have to go hunting for a new one every 15 minutes. The whole point here is to reduce browsing. Netflix could create collections related to different seasons, holidays, or world news moments, and rebundle the separate shorts on the fly to fit viewership trends or try different curational angles.

Often artful and conclusive, they’d provide a sense of culture and closure that a TV episode doesn’t. If you get sleepy you could save the last short, and there’s a feeling of low commitment since you could skip any short that doesn’t grab you.

The Nightly Water Cooler Pick

One thing we’ve lost with the rise of on-demand video are some of those zeitgeist moments where everyone watches the same thing the same night and can then talk about it together the next day. We still get that with live sports, the occasional tent pole premier like Game Of Thrones, or when a series drops for binge-watching like Stranger Things. But Netflix has the ubiquity to manufacture those moments that stimulate conversation and a sense of unity.

Netflix could choose one piece of programming per night per region, perhaps a movie, short arc of TV episodes, or one of the short film bundles I suggested above and stick it prominently on the home page. This Netflix Zeitgeist choice would help override people’s picky preferences that get them stuck browsing by applying peer pressure like, “well, this is what everyone else will be watching.”

Netflix’s curators could pick content matched with an upcoming holiday like a Passover TV episode, show a film that’s reboot is about to debut like Dune or Clueless, pick a classic from an actor that’s just passed away like Luke Perry in the original Buffy movie, or show something tied to a big event like Netflix is currently doing with Beyonce’s Coachella concert film. Netflix could even let brands and or content studios pay to have their content promoted in the Zeitgeist slot.

As streaming service competition heats up and all the apps battle for the best back catalog, it’s not just exclusives but curation and discovery that will set them apart. These ideas could make Netflix the streaming app where you can just turn it on to find something great, be exposed to gorgeous shorts you’d have never known about, or get to participate in a shared societal experience. Entertainment shouldn’t have to be a chore.

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Disney shares are up after the big reveal of its streaming service

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Investors seem to think that Disney is on the right track with its plans for the new streaming service, Disney+.

On the heels of yesterday’s announcement of the streaming service’s November 12 launch date and slate of programming, Disney’s stock price is currently up 9% to $127.23 in morning trading on the New York Stock Exchange.

Ending months of speculation about what would and wouldn’t be included in a streaming package from the mouse house, yesterday’s “investor day”, satisfied public market investors that Disney’s run at the current king of streaming video, Netflix, would be credible.

Netflix shares were down slightly in morning trading, around 3.5% — or roughly $13 — to $354.50.

For stock market watchers, the big question was going to be pricing and on that front, Disney’s service didn’t disappoint. Although the streaming offering from Disney’s entertainment juggernaut was more about moving cash out of one pocket instead of another for most American consumers, as Matthew Ball, a media analyst and the former head of strategy at Amazon Studios, pointed out on Twitter.

American households already spend around $2.8 billion per year renting and buying Disney video — averaging around $24 per year for every household or 40 million annual subscriptions, Ball wrote.

While the market may be setting up the new entertainment landscape as a Netflix versus Disney battle there are important differences between the two and both are likely to thrive in the new era of streaming entertainment.

The companies that are most likely to be challenged by the streaming offerings from Netflix and Disney are AT&T’s Warner Media and CBS/Viacom .

Within Warner Media, layoffs and restructuring in the wake of the company’s acquisition by AT&T, along with the end of the network’s mega-hit “Game of Thrones”, could have serious consequences on its ability to compete as the company rolls out its own (partially ad-supported) streaming service.

Meanwhile, CBS and Viacom are still reeling from the scandal that brought down chief executive Les Moonves — although Viacom’s acquisition of PlutoTV gives the company some breathing room with a free streaming video and on demand option.

As paid services proliferate, the walls around intellectual property will only grow higher. Entertainment companies are all going to vie for more exclusive offerings and that means artists and creators will win as these companies pay more for quality entertainment that they can make exclusively to lock in subscribers. It’ll be a delicate dance between monetizing intellectual property on other platforms and keeping things behind a gate to bring in customers.

Especially as deep-pocketed companies like Apple and Amazon have their own designs on streaming entertainment.

Right now, investors and consumers seem to think that a Disney+ subscription is definitely worth the price of admission. How many other tickets consumers are willing to pay for is another question.

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Netflix may be losing $192M per month from piracy, cord cutting study claims

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As many as 1 in 5 people today are mooching off of someone else’s account when streaming video from Netflix, Hulu or Amazon Video, according to a new study from Of these, Netflix tends to be pirated for the longest period — 26 months, compared with 16 months for Amazon Prime Video or 11 months for Hulu. That could be because Netflix freeloaders often mooch off their family instead of a friend — 48 percent use their parents’ login, while another 14 percent use their sister or brother’s credentials, the firm found.

At a base price of $7.99 per month (the study was performed before Netflix’s January 2019 price increase), freeloading users could save $207.74 over a 26-month period. At scale, these losses can add up, the study claims.

The report estimates Netflix could be losing $192 million in monthly revenue from piracy — more than either Amazon or Hulu, at $45 million per month and $40 million per month, respectively.

Millennials, not surprisingly, account for much of the freeloading. They’re the largest demographic pirating Netflix (18 percent) and Hulu’s service (20 percent). But oddly, it was Baby Boomers who were more likely to borrow someone else’s account to access Amazon Prime Video.

There’s an argument that those who pirate would never be paying customers, so these aren’t true losses. It’s the same sort of thing that was said about Napster mp3 downloads back in the day, or about those pirating movies through The Pirate Bay. But there is some portion of the freeloading population that claims they would pay, if they lost access.

According to the study, 59.3 percent said they would pay for Netflix (or around 14 million people), contributing at least $112 million in monthly revenue, if they lost access. And 37.8 percent, or 2 million, said they’d pay for Hulu; 27.6 percent, or 1 million people, said they’d pay for Prime Video.

Of course, there can be discrepancies between what consumers say they will do versus what they actually end up doing. So such claims that “I’d definitely pay,” have to be taken with the proverbial grain of salt.

It’s worth noting, too, this study calculated figures by looking at Netflix’s single-screen-at-a-time account — in theory, the one meant to be used by a single individual and not shared as a family plan, in order to keep the estimates conservative. The consumer survey defined mooching by asking users if they use a service they don’t pay for, then asked what they would or would not pay for themselves, if that access fell through.

Hulu, at least, has more recently tried to make its service more appealing to penny-pinchers. At its new price — $5.99 per month, rolled out this week — it’s making it harder to justify freeloading.

Netflix, on the other hand, seems to know its value, and raised prices this year so its base plan is a dollar more at $8.99 per month, and its most popular plan has climbed to $12.99 per month.

The full study offers other details on cord-cutting trends, including breakdowns by gender and details on who accounts are mooched from, among other things.

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Hulu greenlights ‘Howard the Duck’ and three other animated Marvel shows

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Four new animated Marvel series, plus a crossover special, are coming to Hulu.

According to the Hollywood Reporter, Hulu has greenlit “MODOK,” “Hit-Monkey,” “Tigra & Dazzler Show” and “Howard the Duck.” The characters will then come together in a special titled “The Offenders.”

These aren’t exactly A-list, or even B-list, Marvel characters. Howard the Duck (created by Steve Gerber) is probably the best-known — mostly for starring in a notorious ’80s flop — but I’ve also got a soft spot for MODOK, a gloriously ridiculous villain whose full name is Mental Organism Designed Only for Killing.

Presumably, the strategy here is to make funny shows about some of the weirder Marvel characters. And there are some established names working behind the scenes, with Kevin Smith signed up as a writer and executive producer on “Howard the Duck,” Patton Oswalt serving in a similar role on “MODOK” and Chelsea Handler on “Tigra and Dazzler Show.”

Meanwhile, the Netflix-Marvel partnership — which also started out with four superhero series and a big crossover — appears to be coming to an end, with only “Jessica Jones” and “The Punisher” left uncanceled (for now).

Hulu is already the home of another Marvel series, “Runaways,” and it makes sense that the relationship would deepen after the Fox acquisition, which made Marvel’s corporate parent Disney into the majority owner of Hulu. And if that’s not enough streaming superhero content for you, there are also shows about Loki and other characters from the Marvel Cinematic Universe in the works for the yet-to-launch Disney+.

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Hulu announces a new ad unit that appears when you pause

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Just to get this out of the way: Yes, Hulu is introducing an ad unit that will show up when you pause a video. But no, it won’t be a video ad.

Hulu says it has 25 million subscribers, the majority of them on an ad-supported plan — so they’re used to seeing TV-style commercial breaks before and during their viewing experience. However, Vice President and Head of Advertising Platforms Jeremy Helfand said the company realizes that having a video ad pop up as soon as you hit pause could be bad for both viewers and advertisers.

For the viewer, “It can be jarring — you think you’ve paused the content, but you’re still seeing sight, sound and motion.” As for the advertiser, they don’t want to create a 30-second ad that the viewer doesn’t see because they left for the kitchen or the bathroom, or because the viewer unpauses the show 10 seconds later.

Conversely, Helfand said that in during user testing, Hulu found that viewers accepted the format “if the ad is subtle and relevant.” So the Hulu Pause Ad is more like a translucent banner ad that appears on the right side of the screen. (“It’s like a car billboard on the side of the road.”) This makes for a better viewing experience, since it’s less distracting than video and you can still see your TV show underneath. And Helfand argued that it’s also better for the brand, because it allows them to get their message across in a quick and simple way.

Also, Pause Ads won’t appear until several seconds after you pause. That’s in case you’ve paused to rewind or otherwise adjust the video (which isn’t really an ideal time to show an ad). So if you start fiddling with the controls, the Pause Ad either won’t appear at all, or it will immediately disappear if it’s already on-screen. Similarly, it should disappear as soon as you hit play again.

When asked if this might give advertisers who are sensitive to where their ads appear something else to worry about — say if their banner shows up next to a risqué sex scene or a gory death scene — Helfand noted that Pause Ads won’t be appearing on episodes that have been rated TV-MA, and that Hulu allows advertisers to target or “anti-target” (explicitly avoid) based on genre, and it sounds like these capabilities will be further refined.

Hulu plans to launch the first Pause Ads in the second quarter of this year, and it’s already announcing two advertisers — Coca-Cola and Charmin. Helfand will appear in select on-demand content in the Hulu library.

The unit will probably continue evolving over time — the exact size and placement could change. Also, Hulu is still figuring out the exact pricing model, but Helfand said it’s envisioned as part of a larger package for advertisers.

And while it’s understandable for viewers to be annoyed when they see ads in new palces, Helfand suggested this is part of a broader push towards “non-disruptive formats,” where ads don’t interrupt your viewing experience. In fact, the goal is to make these new formats account for 50 percent of Hulu’s advertising within the next three years.

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