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Think Outside The Box
Streaming services are leaning heavily on advertising.
But the ad market remains soft, so media companies are diversifying revenue by increasing their prices and varying how they offer content, including with FAST channels, CNBC reports.
Disney, Netflix, Paramount and HBO Max all raised prices within the last year, and they’re not slowing down.
Content bundling can back up price increases while minimizing churn.
Disney will combine Disney+ and Hulu content later this year, for example, and increase prices for ad-free subscribers. Paramount is also adding Showtime to ad-free Paramount+, which helps justify a $2 per month increase.
In terms of the best chance for profitability, “I think we’ll learn that a [subscription, ad-free] customer that doesn’t churn will be the most valuable,” says former Hulu board member Jonathan Miller.
Meanwhile, free ad-supported TV (FAST) channels can reach nonpaying viewers through means like syndication. Warner Bros. Discovery licenses content to Tubi and Roku so it can continue monetizing canceled HBO Max titles, for example. FAST also helps media companies reach those pesky churners, which is why FAST is making headlines.
Ads, Ads And More Ads
By no means does diversification of streaming revenue mean that advertising is any less important.
Most of the biggest services are actually increasing their ad loads, Insider reports, while simultaneously raising ad-free subscription prices to push viewers into the ad-heavy alternatives.
According to MediaRadar, Hulu and Discovery+ increased their ad volume the most. Hulu now has roughly 7.3 minutes of ads per hour of content (up 38% since last year) and Discovery+ has 5 minutes per hour (a 69% increase). Netflix and Disney have also been adding more ads since first launching them only a few months ago.
The exception is HBO Max, which lowered its ad load to 1.6 minutes per hour in hopes of attracting subscribers to Max, Warner Bros. Discovery’s rebrand of HBO Max that includes Discovery+ content. It’s being pitched as carrying the lightest ad load, a title that apparently no longer interests other streaming services.
Feelin’ Fine
Meta just broke the record for the biggest GDPR fine ever. The Irish Data Protection Commission (DPC) slapped Meta with a $1.3 billion fine on Monday, Politico reports.
The DPC says Meta transferred the personal data of European Facebook users to US-based servers without sufficiently protecting it from government surveillance.
The fine comes 10 years after privacy activist Max Schrems initially flagged Meta’s data-handling practices. The judgment is related to a 2020 decision (known as “Schrems II”) by the EU’s Court of Justice that struck down an existing EU-to-US data flow agreement called the Privacy Shield. As part of that decision, the Court of Justice tightened the requirements for standard contractual clauses (SCCs) that govern the flow of data from Europe to America. Meta’s use of older SCCs from before the 2020 decision did not satisfy the new requirements.
Meta has until Oct. 12 to stop using these SCCs. It also must delete any data on European Facebook users transferred to the US since 2020 or transfer that data back to EU-based servers by Nov. 12.
However, the EU and US are expected to finalize a new data flow arrangement by November, so it’s unlikely Meta will actually have to move or delete any data.
But Wait, There’s More!
Search engine startup Neeva is shuttering its consumer search engine to focus on AI instead. [CNBC]
Meanwhile, Big Tech warns about AI’s potential privacy problems. [The Verge]
Disney is removing over 50 titles from Disney+ and Hulu this month as it gets ready to launch a “one-app experience” later this year. [Variety]
TikTok creators are suing Montana for banning the platform. [Mashable]
How some of the biggest national brands are spending on Black-owned media. [Ad Age]
You’re Hired!
Inuvo appoints Barry Lowenthal as president. [Release]
