Disney Earnings, Roku Earnings
Hello everyone. Given Apple’s event on Monday (1 pm ET / 10 am PT), the next update will go out on Tuesday.
As you watch the event, if you have questions or observations that you would like addressed in the daily updates, send them my way. This includes any specific questions regarding the products themselves as there will be some demo time on Monday.
Today’s update will have a video streaming theme as we circle back to cover a few remaining CY2Q24 earnings releases from last month. For both Disney and Roku, the discussion will extend a bit beyond just what was found in their respective earnings.
Let’s jump in.
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Churn vs. Engagement in Paid Video Streaming, Disney Looking to Boost Streaming Engagement, Implications for Apple TV+
We begin with a closer look at some churn vs. engagement data for paid video streaming. The discussion then turns to Disney looking to boost engagement within its streaming properties. We conclude with a look at some implications regarding engagement and Apple TV+.
Hello everyone. Today's update will take us to the paid video streaming industry. Let's jump in.
Churn vs. Engagement in Paid Video Streaming
In his Screentime newsletter, here’s Bloomberg's Lucas Shaw:
“There is a direct link between how much time people spend watching your [paid video streaming] service and how likely they are to keep paying, according to the research firm Owl & Co. (It got some help from our friends at Antenna.)
Those dots on the bottom right of this chart represent Netflix data for different quarters. People spend a lot of time watching every month and don’t cancel.
Every other service is up and to the left, meaning they generate a lot less viewership and have far higher rates of cancellation.
This may seem obvious, but it’s a key point. Many companies in Hollywood are cutting back on spending right now. If you cut spending, that means you offer customers less to watch, which means they will spend less time on your service.
The industry has spent many years criticizing Netflix for making too much. But by offering new series every week, Netflix ensures that customers always feel like there is something to watch.”
The theory that Lucas ends up supporting is that Netflix is winning by focusing on video quantity over quality as there is more content available to watch (which Owl & Co. says results in greater engagement and less churn). Going a bit further, Netflix apparently
An Above Avalon membership is required to continue reading this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)
Choose either a monthly or annual membership. Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time. Contact me with any questions.
Contact me directly if you would like to purchase multiple subscriptions (five or more) for your team or company.
An audio version of the newsletter is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-ons.