Thursday, May 7, 2020
Tuesday, May 5, 2020
Part Twelve: Trafficking or, Vice Amply Rewarded
Note:
This post, this website in general, does not represent the views of
anyone but myself. Although this warning is moreso for the website in general. I can't imagine anyone taking offense with this post. But hey, it takes all kinds!
While I know the juicy LOOKAT DEM DERE COMPANIES makest thy silliest of comedies of erratae are the more entertaining posts, this website does at least attempt to try and be educational. So today we're going to delve into the dry world of ad sales, scheduling, and trafficking. I'll twist some controversy at the end from which you folks can draw your own conclusions for funsies though. AMPLY REWARDED indeed!
So in 2020 when you flip on a linear service be it cable, satellite, fiber optic, or live streaming, you are essentially watching a very complicatedWinAmp iTunes Spotify style playlist. How complicated? Well this would be an overly simplified master control setup for a truly live broadcast:
But for today we'll stick to prerecorded television because not only is it (marginally) simpler but it also makes up a majority of linear television. Everything you see on television can be broken down into four main arenas, which can range from using one to five pieces of software:
But like everything else in life, all television really begins in the sales department. Account Executives meet, call, and form relationships with individual companies and advertising agencies who purchase spots that go into timeframes (usually Dayparts but not always) that are filled with slots called avails (usually during commercial breaks but not always). The Account Executives will use a piece of software that records the details of these deals, including the what time of day these spots will go into. The airtime windows and any additional placement information (e.g. must appear first in the break!) of the purchased spots then gets passed onto Trafficking.
The Trafficking software / department is (one of two places) where everything comes together. Scheduled content (Films and Series) are given formats that contain that aforementioned content, commercial breaks, and secondary events (mostly graphics). Commercial breaks are filled with the sold advertising spots, which only then have their specific content aka 'copy' applied. A few important network promotions (essentially advertising for the network itself) are placed. Whatever slots remain unfilled get 'filler': bonus spots to loyal advertisers, more promotions, and PSAs. Lastly, anything that is not audio or video is dealt with. Information regarding the broadcast such as V-Chip ratings or Closed Captioning is confirmed to exist and function in the format. Whatever advertisers that bought graphics have those graphics placed to air over the scheduled content and have their own copy applied. Promotional graphics are placed and, if necessary, have their copy applied. Lastly, with every 1/30th of second - a frame - of the 24 hour day filled in, theWinAmp iTunes Spotify style playlist is run through an automation script within the Trafficking software. The end result is a text file (often an XML but sometimes a TXT or PHP) that get uploaded to the Master Control department a few hours before broadcast.
The Master Control department imports the text file into its playout software. That software consults its database then searches its content server, its graphics server, and its metadata server to make sure all the assets are there and ready for broadcast. (The chart above is an example of a Live linear broadcast from Master Control.) In some advanced cases, the trafficking or production departments can access the content or graphics in a "live log" environment to make changes to prerecorded content on the fly. This is done if changes need to be made anywhere up to a few minutes before broadcast. As the playlist, well, plays it goes through the content media, graphics, and metadata servers, pulling the files from their hard drives to memory. These three (or more) servers play simultaneously and have their content multiplexed aka muxilated aka muxed aka a fancy phrase meaning "mixed and rendered" on the fly to a transport stream aka a .TS file BEHOLD MY MSPAINT:
The footnote to the whole process is the As-Run. A log of what actually got broadcast (including weather, mechanical, or human-error disruption) gets sent back to the Trafficking or Sales department. They in turn reconcile the broadcast playlist with the as-run and see if any commercials didn't get aired. If a disruption did occur, the account executive can negotiate an appropriate discount on the next order or provide extra spots free of charge aka a 'makegood'.
Remember above where I said these four processes could range anywhere between one to five distinct pieces of software? There are two major schools of thought / lines of business in executing the operational side of linear networks.
One of these two options is a legacy system: disparate pieces of database software whose central programming code was written in the 1980s and whose UI / UX feels in line with that. Networks who choose this option will try and select the best sales, scheduling, trafficking, graphic, and playout applications and then attempt to reconcile each unique application's unique file formats using translator software (like traffic's automation script). Even if the same company produces or distributes multiple applications, often translation and reconciliation is required because quite often these 5 in 1 software packages are assembled from acquired or merged companies. While sometimes cumbersome, these legacy systems have decades of input from television networks about their individual needs and therefore come equipped with a magnanimous bounty of features and a deep range of manual flexibility (especially if a user is familiar with computer programming).
But in the mid to late 2010s, with the explosion of cloud computing, a new type of mindset concerning television's operational software evolved. Why not have a single piece of software store the content contracts, ad sales information, the content itself, the metadata, while also playing out the content simultaneously? The cloud aspect with redundant backups removes the fear of putting all the eggs in one basket while spread out the processing load across an entire virtual network. Pare down "unnecessary" features, add in a slick UI, get some VC cash, and DISRUPT THE SYSTEM, BAY-BEE. While these systems certainly feel like the future of network operations, they still are in their nascent forms. In a massive oversimplification, their UX feels and operates more like a Silicon Valley mobile app than a Hollywood master control, lacking some of the difficult but useful manipulation offered by the more experienced legacy systems.
One of the biggest favors the newer, cloud-based systems have to offer is their ability to integrate more departments into their all-in-one system. For example, most of these systems are include Nielsen or comScore ratings, tied directly into your As-Runs. This allows the General Manager and the Programming team to make more informed content decisions immediately.
Why... it may be that long until a single piece of machine learning software scans for available major, minor, and independent studios' content and using previous ratings data it selects, purchases, acquires, schedules the content all on its own, while doing the same for advertisers (selects, sells, acquires, schedules - Wide Orbit's software system Programmatic is essentially already this), while also directing production departments exactly which content needs promotions and when.
Not if. When!
Fun times, folks! And now more fun times!
While I know the juicy LOOKAT DEM DERE COMPANIES makest thy silliest of comedies of erratae are the more entertaining posts, this website does at least attempt to try and be educational. So today we're going to delve into the dry world of ad sales, scheduling, and trafficking. I'll twist some controversy at the end from which you folks can draw your own conclusions for funsies though. AMPLY REWARDED indeed!
So in 2020 when you flip on a linear service be it cable, satellite, fiber optic, or live streaming, you are essentially watching a very complicated
 |
| Thanks Grass Valley! |
- Scheduling Contract Software
- Advertising Contract Software
- Trafficking Software
- Automation Scripting
- Playout Software
- Dynamic Graphic Software and Storage
- Metadata Software and Storage
- Content Storage
- Rendering/Transcoding Software
But like everything else in life, all television really begins in the sales department. Account Executives meet, call, and form relationships with individual companies and advertising agencies who purchase spots that go into timeframes (usually Dayparts but not always) that are filled with slots called avails (usually during commercial breaks but not always). The Account Executives will use a piece of software that records the details of these deals, including the what time of day these spots will go into. The airtime windows and any additional placement information (e.g. must appear first in the break!) of the purchased spots then gets passed onto Trafficking.
The Trafficking software / department is (one of two places) where everything comes together. Scheduled content (Films and Series) are given formats that contain that aforementioned content, commercial breaks, and secondary events (mostly graphics). Commercial breaks are filled with the sold advertising spots, which only then have their specific content aka 'copy' applied. A few important network promotions (essentially advertising for the network itself) are placed. Whatever slots remain unfilled get 'filler': bonus spots to loyal advertisers, more promotions, and PSAs. Lastly, anything that is not audio or video is dealt with. Information regarding the broadcast such as V-Chip ratings or Closed Captioning is confirmed to exist and function in the format. Whatever advertisers that bought graphics have those graphics placed to air over the scheduled content and have their own copy applied. Promotional graphics are placed and, if necessary, have their copy applied. Lastly, with every 1/30th of second - a frame - of the 24 hour day filled in, the
The Master Control department imports the text file into its playout software. That software consults its database then searches its content server, its graphics server, and its metadata server to make sure all the assets are there and ready for broadcast. (The chart above is an example of a Live linear broadcast from Master Control.) In some advanced cases, the trafficking or production departments can access the content or graphics in a "live log" environment to make changes to prerecorded content on the fly. This is done if changes need to be made anywhere up to a few minutes before broadcast. As the playlist, well, plays it goes through the content media, graphics, and metadata servers, pulling the files from their hard drives to memory. These three (or more) servers play simultaneously and have their content multiplexed aka muxilated aka muxed aka a fancy phrase meaning "mixed and rendered" on the fly to a transport stream aka a .TS file BEHOLD MY MSPAINT:
 |
| The "Receiving Satellite Dish" in this example would be a cable operator like Comcast, Spectrum, or Cox. |
Remember above where I said these four processes could range anywhere between one to five distinct pieces of software? There are two major schools of thought / lines of business in executing the operational side of linear networks.
One of these two options is a legacy system: disparate pieces of database software whose central programming code was written in the 1980s and whose UI / UX feels in line with that. Networks who choose this option will try and select the best sales, scheduling, trafficking, graphic, and playout applications and then attempt to reconcile each unique application's unique file formats using translator software (like traffic's automation script). Even if the same company produces or distributes multiple applications, often translation and reconciliation is required because quite often these 5 in 1 software packages are assembled from acquired or merged companies. While sometimes cumbersome, these legacy systems have decades of input from television networks about their individual needs and therefore come equipped with a magnanimous bounty of features and a deep range of manual flexibility (especially if a user is familiar with computer programming).
But in the mid to late 2010s, with the explosion of cloud computing, a new type of mindset concerning television's operational software evolved. Why not have a single piece of software store the content contracts, ad sales information, the content itself, the metadata, while also playing out the content simultaneously? The cloud aspect with redundant backups removes the fear of putting all the eggs in one basket while spread out the processing load across an entire virtual network. Pare down "unnecessary" features, add in a slick UI, get some VC cash, and DISRUPT THE SYSTEM, BAY-BEE. While these systems certainly feel like the future of network operations, they still are in their nascent forms. In a massive oversimplification, their UX feels and operates more like a Silicon Valley mobile app than a Hollywood master control, lacking some of the difficult but useful manipulation offered by the more experienced legacy systems.
One of the biggest favors the newer, cloud-based systems have to offer is their ability to integrate more departments into their all-in-one system. For example, most of these systems are include Nielsen or comScore ratings, tied directly into your As-Runs. This allows the General Manager and the Programming team to make more informed content decisions immediately.
Why... it may be that long until a single piece of machine learning software scans for available major, minor, and independent studios' content and using previous ratings data it selects, purchases, acquires, schedules the content all on its own, while doing the same for advertisers (selects, sells, acquires, schedules - Wide Orbit's software system Programmatic is essentially already this), while also directing production departments exactly which content needs promotions and when.
Not if. When!
Fun times, folks! And now more fun times!
- Where did all the flowers go aka the Vikings go legit!
- Proms!
- Anime and eSports! (Two different posts!)
- And more... selected by a computer! (j/k for NOW)
Thursday, April 30, 2020
Part Eleven: Fox and The Limits of Consolidation or, Never Give a Saga an Even Break
Note:
This post, this website in general, does not represent the views of
anyone. Including myself. Especially this post! This is a naughty post
and should be disregarded at all costs. I LOVE YOU NEWS CORP. You are Tubi! GET IT
So where I left off on my previous post, Australian Newspaper magnate Rupert Murdoch had just reorganized his newspaper empire to more easily begin making American investments, Metromedia's CEO was looking for someone to buy his collection of non-network affiliated television stations, and 20th Century-Fox Studios was just purchased by two investors.
The first of these investors, one Marvin Davis, was a Jersey-born Midwestern-residing businessman who made his millions through his father's Davis Oil Company. Davis Oil operated unlike the larger oil companies, relying on smaller wells in less oil-rich areas, backed up by spreading the risk through group investments. (WELCOME TO HOLLYWOOD OIL TALK WITH JOMO!) After several decades of unyielding success in the family business, he sold all $600 million of his oil shares and spent more than half of that on his 20th Century-Fox purchase.
The second of these investors was a Wall Street trader named Marc Rich. His specialty was commodities trading and his SPECIFIC specialty was crude oil commodities trading. His philosophy was that large financial institutions could band together and back up small oil producers to make them just as, if not more, competitive than large oil producers. Importantly this is how he met Marvin Davis. And even MORE IMPORTANTLY... well we'll get to that in just one more paragraph.
Davis and Rich oversaw the continued success that Star Wars had put the studio on. Martin Scorsese's King of Comedy and Sidney Lumet's The Verdict gained the studio both critical (the former) and commercial (the latter) success. With Return of the Jedi hitting theaters the peak of their combined success was realized to great financial boon in May of 1983. It seemed 20th Century-Fox had finally achieved the smooth sailing they'd missed for the past two decades.
Then in September of 1983 Marc Rich was indicted on 64 criminal counts for tax evasion and trading with Iran during the oil embargo, while American citizens were being held prisoners during the Hostage Crisis. Guess there are some small oil producers with which one does not do business! Right before his home and office were raided by the FBI, Rich fled to Switzerland and his assets - including 50% of 20th Century-Fox - were seized by the United States Federal Government.
After five months of negotiations, Davis was allowed to purchase Rich's 50% ownership of 20th Century-Fox, which he immediately turned around and sold to our hungry-for-the-American-media-market Australian businessman Rupert Murdoch.
Rupert had three decades of international media acquisition, consolidation, and expansion under his belt. He saw the ownership of a Major Film Studio as a beginning, not an end, to his American media incursion. He immediately hired Barry Diller, the head of (at the time) Minor Film Studio Paramount Pictures to run 20th Century-Fox. Previously, Diller had become head of Paramount at the age of 32 and the studio had grown in leaps and bounds in the decade under his youthful direction. One of his young, hotshot ideas that he never got off the ground at Paramount was the brass ring in the media world: the launch of a fourth broadcast television network. Now at Murdoch's ear, Diller convinced Murdoch to greenlight the idea. Murdoch began acquisition talks for Metromedia's stations.
But Marvin Davis with his 50% of studio ownership shot down the process. He had seen the failures and halted concepts of "forth networks" like DuMont, MetroNet, NTA Film Network, Hughes Television Network, The Paramount Network, and Operation Prime Time. Davis considered the investment to be too risky. Undeterred, Murdoch - leveraging a different wing of his reorganized News Corp. holding company - bought Metromedia all on his own. Realizing that trying to control Rupert was more trouble than it was worth, Marvin Davis sold his stake in 20th Century-Fox to Rupert Murdoch in March 1985. Two months later, the Metromedia deal closed. In October, Rupert had assembled his team to launch the mythical Forth Network within a year.
And on Thursday October 9, 1986 FOX went live.
Its first three years had slow growth. Hits like The Tracy Ullman Show and Married with Children buoyed the nascent network while the rest of its programming struggled. But unlike previous "fourth network" attempts, any losses from FOX Broadcasting could be absorbed by the successes of 20th Century Fox Studios and News Corp.'s other holdings, as well as reduced production costs as Fox could make a majority of its programming in house for no licensing fees.
Two heavy risks finally catapulted Fox from a ragtag collection of stations to competing with the Big Three networks. First in 1989, Fox took a gamble on the first Animated Primetime series since Wait Till Your Father Gets Home in 1974 and the first single-network Animated Primetime series since The Flintstones in 1966. That show was, of course, The Simpsons which was a lightening-in-a-bottle megahit. The second big risk was a wholly financial one. Since 1956 CBS had broadcast almost all the NFC football games. With 1994 season coming up, CBS had offered the NFL $1 billion for four years' worth of NFC games. Fox blew the bidding process to pieces by offering a whopping $1.58 billion for the same package. The gamble paid off and Fox's ratings soared.
With more ratings came more advertisers and with more advertisers came more purchasing power. 20th Century Fox bought New World Pictures not only for more Film and Television Studio Production assets but also because of New World Pictures' television stations. Suddenly Fox Broadcasting was no longer legally considered "a collection of stations" and were now - at long last - legally defined as a Broadcast Network. The FCC stepped in and after SEVENTY STATIONS in THIRTY MEDIA MARKETS switched call letters & affiliations, the dust settled and The Big Three were now The Big Four.
Meanwhile, the Major Film Studio continued (relatively - for Hollywood) smooth sailing. It remained profitable and in 1994 launched an animation department whose 1998 hit Anastasia put them permanently on the map as a competitor to Disney Animation. They supplemented Fox Animation studios in 1997 with the purchase of computer animation specialists Blue Sky Studios as a way to compete with Disney's business partner Pixar.
Fox had finally found its groove and in the process changed Film and Television models forever.
Until 2013.
In June of 2013 Rupert Murdoch got vote approval from his board to split News Corp. into two companies: News Corp. (which would retain all of his newspaper business) and 21st Century Fox (GET IT - which would retain all of his media business). Something big was afoot.
You see, the purchase of NBCUniversal by Comcast - a four year ordeal that wrapped up in 2013 - sent shockwaves throughout Hollywood. A new round of consolidation was coming. Cable and Telecommunication companies, companies that had been distributing Film Studios' content for decades, had grown well beyond the size of the content producers. And like every business before them, they looked towards vertical growth to reduce costs.
The word was out: Major Film Studios must either grow so large that they would be too expensive to buy, or submit to Distribution ownership.
So in 2014, 21st Century Fox offered 80 billion dollars to buy Time Warner. Not only would it double their content, but it would make 21st Century Fox too large to be affordable for the DishTVs, Verizons, at&ts, Spectra, and Coxes of the world.
Time Warner fought back at the offer and within months the deal fell through. 21st Century Fox executives were frustrated. Time Warner was their best shot. NBCUniversal was already purchased. DisneyABC was too big to purchase. And purchasing National Amusements (Viacom/CBS/Paramount) or Sony Pictures would not give Fox the financial stability to remain independent. The heads of 21st Century Fox realized that reality and began negotiating with possible buyers.
In December of 2017, Disney won the bid for 21st Century Fox at cost of 71 billion. The sale did not include the Fox Broadcasting Company with their O&O television stations nor did it include the Fox Sports, Fox News, and Fox Business cable channels, as Disney executives found these assets more of a brand liability than profit generators. Disney did acquire the 20th Century Film Studio and its associated film & television production studios, its rights to intellectual properties & franchises, and - most importantly - its content library. Disney had insulated itself from Distributor takeover. For now.
So here we are. 113 years after William Fox bought his first movie theater, his namesake company Fox found itself wholly outside the theatrical film world. It exists today only as a Major Broadcast Television Network (nothing to sneeze at!) with limited production capabilities, facing high content licensing fees. So don't be surprised if the Major Film Studio that doesn't wholly control a Broadcast Network - at&t's WarnerMedia - starts kicking Fox Broadcasting's tires. Or if another telecommunications distribution or tech company has an itch to grow and begins eyeing a Major Television network channel (after scooping up an unpurchased Major Film Studio content library first, of course).
And while horizontal growth (such as buying fellow content libraries) can offer short term stability, it is this author's opinion that Disney needs to think vertically (beyond ABC) sooner rather than later.
Folks! The future is happening now!
More... the future! Here! Next week!
So where I left off on my previous post, Australian Newspaper magnate Rupert Murdoch had just reorganized his newspaper empire to more easily begin making American investments, Metromedia's CEO was looking for someone to buy his collection of non-network affiliated television stations, and 20th Century-Fox Studios was just purchased by two investors.
The first of these investors, one Marvin Davis, was a Jersey-born Midwestern-residing businessman who made his millions through his father's Davis Oil Company. Davis Oil operated unlike the larger oil companies, relying on smaller wells in less oil-rich areas, backed up by spreading the risk through group investments. (WELCOME TO HOLLYWOOD OIL TALK WITH JOMO!) After several decades of unyielding success in the family business, he sold all $600 million of his oil shares and spent more than half of that on his 20th Century-Fox purchase.
The second of these investors was a Wall Street trader named Marc Rich. His specialty was commodities trading and his SPECIFIC specialty was crude oil commodities trading. His philosophy was that large financial institutions could band together and back up small oil producers to make them just as, if not more, competitive than large oil producers. Importantly this is how he met Marvin Davis. And even MORE IMPORTANTLY... well we'll get to that in just one more paragraph.
Davis and Rich oversaw the continued success that Star Wars had put the studio on. Martin Scorsese's King of Comedy and Sidney Lumet's The Verdict gained the studio both critical (the former) and commercial (the latter) success. With Return of the Jedi hitting theaters the peak of their combined success was realized to great financial boon in May of 1983. It seemed 20th Century-Fox had finally achieved the smooth sailing they'd missed for the past two decades.
Then in September of 1983 Marc Rich was indicted on 64 criminal counts for tax evasion and trading with Iran during the oil embargo, while American citizens were being held prisoners during the Hostage Crisis. Guess there are some small oil producers with which one does not do business! Right before his home and office were raided by the FBI, Rich fled to Switzerland and his assets - including 50% of 20th Century-Fox - were seized by the United States Federal Government.
Rupert had three decades of international media acquisition, consolidation, and expansion under his belt. He saw the ownership of a Major Film Studio as a beginning, not an end, to his American media incursion. He immediately hired Barry Diller, the head of (at the time) Minor Film Studio Paramount Pictures to run 20th Century-Fox. Previously, Diller had become head of Paramount at the age of 32 and the studio had grown in leaps and bounds in the decade under his youthful direction. One of his young, hotshot ideas that he never got off the ground at Paramount was the brass ring in the media world: the launch of a fourth broadcast television network. Now at Murdoch's ear, Diller convinced Murdoch to greenlight the idea. Murdoch began acquisition talks for Metromedia's stations.
But Marvin Davis with his 50% of studio ownership shot down the process. He had seen the failures and halted concepts of "forth networks" like DuMont, MetroNet, NTA Film Network, Hughes Television Network, The Paramount Network, and Operation Prime Time. Davis considered the investment to be too risky. Undeterred, Murdoch - leveraging a different wing of his reorganized News Corp. holding company - bought Metromedia all on his own. Realizing that trying to control Rupert was more trouble than it was worth, Marvin Davis sold his stake in 20th Century-Fox to Rupert Murdoch in March 1985. Two months later, the Metromedia deal closed. In October, Rupert had assembled his team to launch the mythical Forth Network within a year.
And on Thursday October 9, 1986 FOX went live.
Its first three years had slow growth. Hits like The Tracy Ullman Show and Married with Children buoyed the nascent network while the rest of its programming struggled. But unlike previous "fourth network" attempts, any losses from FOX Broadcasting could be absorbed by the successes of 20th Century Fox Studios and News Corp.'s other holdings, as well as reduced production costs as Fox could make a majority of its programming in house for no licensing fees.
Two heavy risks finally catapulted Fox from a ragtag collection of stations to competing with the Big Three networks. First in 1989, Fox took a gamble on the first Animated Primetime series since Wait Till Your Father Gets Home in 1974 and the first single-network Animated Primetime series since The Flintstones in 1966. That show was, of course, The Simpsons which was a lightening-in-a-bottle megahit. The second big risk was a wholly financial one. Since 1956 CBS had broadcast almost all the NFC football games. With 1994 season coming up, CBS had offered the NFL $1 billion for four years' worth of NFC games. Fox blew the bidding process to pieces by offering a whopping $1.58 billion for the same package. The gamble paid off and Fox's ratings soared.
With more ratings came more advertisers and with more advertisers came more purchasing power. 20th Century Fox bought New World Pictures not only for more Film and Television Studio Production assets but also because of New World Pictures' television stations. Suddenly Fox Broadcasting was no longer legally considered "a collection of stations" and were now - at long last - legally defined as a Broadcast Network. The FCC stepped in and after SEVENTY STATIONS in THIRTY MEDIA MARKETS switched call letters & affiliations, the dust settled and The Big Three were now The Big Four.
Meanwhile, the Major Film Studio continued (relatively - for Hollywood) smooth sailing. It remained profitable and in 1994 launched an animation department whose 1998 hit Anastasia put them permanently on the map as a competitor to Disney Animation. They supplemented Fox Animation studios in 1997 with the purchase of computer animation specialists Blue Sky Studios as a way to compete with Disney's business partner Pixar.
Fox had finally found its groove and in the process changed Film and Television models forever.
Until 2013.
In June of 2013 Rupert Murdoch got vote approval from his board to split News Corp. into two companies: News Corp. (which would retain all of his newspaper business) and 21st Century Fox (GET IT - which would retain all of his media business). Something big was afoot.
The word was out: Major Film Studios must either grow so large that they would be too expensive to buy, or submit to Distribution ownership.
So in 2014, 21st Century Fox offered 80 billion dollars to buy Time Warner. Not only would it double their content, but it would make 21st Century Fox too large to be affordable for the DishTVs, Verizons, at&ts, Spectra, and Coxes of the world.
Time Warner fought back at the offer and within months the deal fell through. 21st Century Fox executives were frustrated. Time Warner was their best shot. NBCUniversal was already purchased. DisneyABC was too big to purchase. And purchasing National Amusements (Viacom/CBS/Paramount) or Sony Pictures would not give Fox the financial stability to remain independent. The heads of 21st Century Fox realized that reality and began negotiating with possible buyers.
In December of 2017, Disney won the bid for 21st Century Fox at cost of 71 billion. The sale did not include the Fox Broadcasting Company with their O&O television stations nor did it include the Fox Sports, Fox News, and Fox Business cable channels, as Disney executives found these assets more of a brand liability than profit generators. Disney did acquire the 20th Century Film Studio and its associated film & television production studios, its rights to intellectual properties & franchises, and - most importantly - its content library. Disney had insulated itself from Distributor takeover. For now.
So here we are. 113 years after William Fox bought his first movie theater, his namesake company Fox found itself wholly outside the theatrical film world. It exists today only as a Major Broadcast Television Network (nothing to sneeze at!) with limited production capabilities, facing high content licensing fees. So don't be surprised if the Major Film Studio that doesn't wholly control a Broadcast Network - at&t's WarnerMedia - starts kicking Fox Broadcasting's tires. Or if another telecommunications distribution or tech company has an itch to grow and begins eyeing a Major Television network channel (after scooping up an unpurchased Major Film Studio content library first, of course).
And while horizontal growth (such as buying fellow content libraries) can offer short term stability, it is this author's opinion that Disney needs to think vertically (beyond ABC) sooner rather than later.
Folks! The future is happening now!
More... the future! Here! Next week!
- Startups yesterday and today aka aye, matey!
- Promotions!
- Trafficking!
- CUTTING EDGE FOR THE ZOOMERS aka Anime and eSports!
- And ssssssssssssssssso much more!
Tuesday, April 28, 2020
Part Ten: Fox's Race for Growth or, The Modern Prometheus
Note:
This post, this website in general, does not represent the views of
anyone. Including myself. Especially this post! This is a naughty post
and should be disregarded at all costs. I LOVE YOU NEWS CORP. You are Tubi! GET IT
This post will detail how four companies became stitched together under one banner over the course of seven decades. And beyond even that I will try and shed a light on why horizontal expansion has its limits and that only through vertical expansion can a corporate media compete and thrive in the 21st century. Today's Lesson: Fox! Or more accurately...
Two film studios, a television network, and a newspaper publishing company became the Voltron of a Major Film Studio / Major Broadcast Network Channel (and other assets) until 2019. Against the same odds faced by other small studios, other newspaper/television groups... how did such a powerhouse come to be? How could such a dominant corporation simply be bought out? What was its fatal flaw? Are other media business in the a similiar peril?
let's start back in 1904 when Hungarian-American William Fox bought a significant minority share in a Brooklyn movie theater. As early investments in booming industries are wont to do, his investment paid back handsomely and within four years he had singular ownership across more than a dozen movie theaters in New York City. Realizing that while attempting to own ALL THEATERS EVERYWHERE (in New York) as a horizontal integration plan was a profitable goal, it was a goal with a low ceiling and no long term stability. He needed to expand in a way that cut costs.
As the industry stood at the time, a myriad of wealthy studios who could afford Thomas Edison's patents had a de facto monopoly on film creation and distribution. But Fox figured if he could round up a few small studios who may have or may not have been entirely above-the-board, he could distribute their films to his theaters. For Fox and the indies, it was a win-win: the indies found a distributor willing to take their gray-market films and since no one paid Edison's patents, with the ticket prices the same, Fox got the films for cheap and saved a chunk.
As a side note, Edison and his fellow studio heads tried to seize Fox's indie studio friends' equipment only to have Fox retaliate and sue Edison et al. under antitrust laws and win.
But theatrical ownership and film distribution still was not enough vertical integration in Fox's mind. He could save even more money owning and operating his own film studio and skip licensing films in the first place. Free is better than cheap! Fox bought an indie studio from his network of distributors, French-owned Éclair Studios operating out of New Jersey. Even then he knew that New Jersey wasn't the best locale for either shooting film or making studio business deals. So in 1915 Fox moved the company out to Los Angeles and renamed it drumroll Fox Films.
The next 14 years had more astounding success for Fox. His company grew in wealth and stature that in 1927 he made an attempt to buy the corporate parent of Loew's Theaters and Major Film Studio MGM. MGM executives fought it in court until 1929 when the stock market crash left Fox penniless. He was forced to give up the acquisition of MGM, turn over Fox Films to a new president, and after lingering on with nothing but good credit for another five years, his studio old studio was sold to...
20th Century Films!
20th Century Films had only existed two years prior to their purchase of Fox Films. They were a collection of other Major Studios' outcasts, entrepreneurs, and Bank of America investors. They had strong financial backing combined with financial and critical acclaim; all they lacked was name-brand legitimacy. After a failed attempt to acquire United Artists, they instead went in on Fox Films to create...
20th Century-Fox!
Things were smooth sailing for 20th Century-Fox for the next 20 years until they faced two major challenges: a court ordered separation of their Studio and Theater businesses but more urgently: the rise of Television.
All the Major Film Studio were stuck competing with Television, a once-fad now seemingly here forever. 20th Century-Fox fought back by evaluating what Television could not provide to the consumer and wholly investing in those novel, unproven, and risky tactics. They wanted to be more provocative than television, they wanted to be more epic then television, and they wanted to be more cutting edge than television. Some of these tactics worked, for example, their CinemaScope technique won the Widescreen format battle and was rapidly adopted by all Major Film Studios. Some of these tactics, infamously the film Cleopatra's epic production costs, almost drove the studio to bankruptcy. That set off a chain of panicked, reactionary management that kneecapped the studio's ability to profit and grow for the next 15 years.
A series of high profile successes (The Sound of Music, Fantastic Voyage, Planet of the Apes, and The Towering Inferno) was essentially the only thing holding Fox together. But the success of a little film called Star Wars, a film that single handly changed an entire genre of filmmaking and GOSH YOU'RE READING THIS BLOG I THINK Y'ALL KNOW WHAT STAR WARS did for Hollywood... anyways, Star Wars brought attention in the sense of HERE IS A FINANCIALLY STRUGGLING STUDIO who happens to own the Intellectual Property Rights to the MOST SUCCESSFUL FRANCHISE in the history of franchises. In 1981, two investors bought the studio outright for $700 million.
Buy Low Amirite?
The next five years were absolutely insane.
But let's put a pin in that for today and very briefly talk about a Television manufacturing company and an Australian Newspaper.
In 1931 a New Jersey company named DuMont Labs began manufacturing televisions replacement parts. Again, like any erupting industry, early investments paid off well. Only a decade later, a humble Television repair company founded its first Owned & Operated television network. Along with rivals NBC, CBS, and ABC, the DuMont Television Network rode the early wave of television growth and acceptance.
But unlike NBC, CBS, and ABC, the DuMont network did not have a robust Radio Industry company arm to back it up. Without that corporate and financial leverage, DuMont and their O&O stations often found themselves at odds with the telephone-line-owning signal bandwidth company (AT&T) or their Studio Investors (Paramount Pictures) and their lack of name-brand recognition was unable to draw A level Hollywood talent. Their biggest and final blow came in 1948 when the FCC froze new television station applications. When the dust settled in 1952 and the FCC expanded the channel range (from the original 2 to 13) all the way up to channel 83, DuMont found their stations relegated to the higher numbers, which at the time required specialty TVs.
By 1956 the company had folded, creating the first and only failed Broadcast Network company in the United States. With a failed sale to ABC, many of their O&O stations divested and became independent. Two re-conglomerated as Metropolitan Broadcasting Company in 1958 and were later rebranded as Metromedia in 1961.
Metromedia spent the next 15 years acquiring as many independent stations as possible with the hopes of returning as a Major Television Broadcast Network, even purchasing a production studio in 1968. In 1976 Metromedia's board felt that everything had come together enough to move forward with their plan. They proposed that their myriad of independent networks begin producing and simulcasting as a single network: MetroNet. Advertisers balked at their rates, though, and MetroNet never got the financial backing they needed to launch. The board scuttled the "forth network" idea and briefly pivoted a business plan to acquire the country's most powerful independent Television Stations. Frustrated with the lack of growth, Metromedia CEO John Kluge bought a controlling stock interest in his company in 1984. A year later he turned around and sold it to an Australian Newspaperman.
Back in 1923 (FINAL TIME I'M DOING THIS I SWEARS) a fellow named James Edward Davidson bought two rural newspapers in southern Australia. He incorporated them under the name News Limited. In 1949 newspaper investor / owner Keith Murdoch purchased a minority stake and by his death in 1952 he owned News Limited outright. His son, Rupert, took control of News Limited and conglomerated the rest of his father Keith's newspaper ownership under the News Limited Brand.
Rupert spent the next 30 years buying up Australian newspapers, as well as newspapers across Asia & Europe, as well as a handful in the United States. In the very late 1970s, he formed News Corp. as a holding company to better organize his assets in preparation to expand greatly into the United States. Rupert Murdoch had billions of dollars, control of a great deal of print media, and - by extension of those two facts - friendly associates in the private and public sectors.
And here was a Major Film Studio, 20th Century-Fox, and an aspirational
Major Television Broadcast Network, Metromedia, both looking for a buyer. If a single company controlled both, why, it would be the first Film Studio-Broadcast Network merger! Think of the money to be made...
Stay tuned for
This post will detail how four companies became stitched together under one banner over the course of seven decades. And beyond even that I will try and shed a light on why horizontal expansion has its limits and that only through vertical expansion can a corporate media compete and thrive in the 21st century. Today's Lesson: Fox! Or more accurately...
let's start back in 1904 when Hungarian-American William Fox bought a significant minority share in a Brooklyn movie theater. As early investments in booming industries are wont to do, his investment paid back handsomely and within four years he had singular ownership across more than a dozen movie theaters in New York City. Realizing that while attempting to own ALL THEATERS EVERYWHERE (in New York) as a horizontal integration plan was a profitable goal, it was a goal with a low ceiling and no long term stability. He needed to expand in a way that cut costs.
As the industry stood at the time, a myriad of wealthy studios who could afford Thomas Edison's patents had a de facto monopoly on film creation and distribution. But Fox figured if he could round up a few small studios who may have or may not have been entirely above-the-board, he could distribute their films to his theaters. For Fox and the indies, it was a win-win: the indies found a distributor willing to take their gray-market films and since no one paid Edison's patents, with the ticket prices the same, Fox got the films for cheap and saved a chunk.
As a side note, Edison and his fellow studio heads tried to seize Fox's indie studio friends' equipment only to have Fox retaliate and sue Edison et al. under antitrust laws and win.
But theatrical ownership and film distribution still was not enough vertical integration in Fox's mind. He could save even more money owning and operating his own film studio and skip licensing films in the first place. Free is better than cheap! Fox bought an indie studio from his network of distributors, French-owned Éclair Studios operating out of New Jersey. Even then he knew that New Jersey wasn't the best locale for either shooting film or making studio business deals. So in 1915 Fox moved the company out to Los Angeles and renamed it drumroll Fox Films.
The next 14 years had more astounding success for Fox. His company grew in wealth and stature that in 1927 he made an attempt to buy the corporate parent of Loew's Theaters and Major Film Studio MGM. MGM executives fought it in court until 1929 when the stock market crash left Fox penniless. He was forced to give up the acquisition of MGM, turn over Fox Films to a new president, and after lingering on with nothing but good credit for another five years, his studio old studio was sold to...
20th Century Films!
20th Century Films had only existed two years prior to their purchase of Fox Films. They were a collection of other Major Studios' outcasts, entrepreneurs, and Bank of America investors. They had strong financial backing combined with financial and critical acclaim; all they lacked was name-brand legitimacy. After a failed attempt to acquire United Artists, they instead went in on Fox Films to create...
20th Century-Fox!
Things were smooth sailing for 20th Century-Fox for the next 20 years until they faced two major challenges: a court ordered separation of their Studio and Theater businesses but more urgently: the rise of Television.
All the Major Film Studio were stuck competing with Television, a once-fad now seemingly here forever. 20th Century-Fox fought back by evaluating what Television could not provide to the consumer and wholly investing in those novel, unproven, and risky tactics. They wanted to be more provocative than television, they wanted to be more epic then television, and they wanted to be more cutting edge than television. Some of these tactics worked, for example, their CinemaScope technique won the Widescreen format battle and was rapidly adopted by all Major Film Studios. Some of these tactics, infamously the film Cleopatra's epic production costs, almost drove the studio to bankruptcy. That set off a chain of panicked, reactionary management that kneecapped the studio's ability to profit and grow for the next 15 years.
A series of high profile successes (The Sound of Music, Fantastic Voyage, Planet of the Apes, and The Towering Inferno) was essentially the only thing holding Fox together. But the success of a little film called Star Wars, a film that single handly changed an entire genre of filmmaking and GOSH YOU'RE READING THIS BLOG I THINK Y'ALL KNOW WHAT STAR WARS did for Hollywood... anyways, Star Wars brought attention in the sense of HERE IS A FINANCIALLY STRUGGLING STUDIO who happens to own the Intellectual Property Rights to the MOST SUCCESSFUL FRANCHISE in the history of franchises. In 1981, two investors bought the studio outright for $700 million.
Buy Low Amirite?
The next five years were absolutely insane.
But let's put a pin in that for today and very briefly talk about a Television manufacturing company and an Australian Newspaper.
In 1931 a New Jersey company named DuMont Labs began manufacturing televisions replacement parts. Again, like any erupting industry, early investments paid off well. Only a decade later, a humble Television repair company founded its first Owned & Operated television network. Along with rivals NBC, CBS, and ABC, the DuMont Television Network rode the early wave of television growth and acceptance.
But unlike NBC, CBS, and ABC, the DuMont network did not have a robust Radio Industry company arm to back it up. Without that corporate and financial leverage, DuMont and their O&O stations often found themselves at odds with the telephone-line-owning signal bandwidth company (AT&T) or their Studio Investors (Paramount Pictures) and their lack of name-brand recognition was unable to draw A level Hollywood talent. Their biggest and final blow came in 1948 when the FCC froze new television station applications. When the dust settled in 1952 and the FCC expanded the channel range (from the original 2 to 13) all the way up to channel 83, DuMont found their stations relegated to the higher numbers, which at the time required specialty TVs.
By 1956 the company had folded, creating the first and only failed Broadcast Network company in the United States. With a failed sale to ABC, many of their O&O stations divested and became independent. Two re-conglomerated as Metropolitan Broadcasting Company in 1958 and were later rebranded as Metromedia in 1961.
Back in 1923 (FINAL TIME I'M DOING THIS I SWEARS) a fellow named James Edward Davidson bought two rural newspapers in southern Australia. He incorporated them under the name News Limited. In 1949 newspaper investor / owner Keith Murdoch purchased a minority stake and by his death in 1952 he owned News Limited outright. His son, Rupert, took control of News Limited and conglomerated the rest of his father Keith's newspaper ownership under the News Limited Brand.
Rupert spent the next 30 years buying up Australian newspapers, as well as newspapers across Asia & Europe, as well as a handful in the United States. In the very late 1970s, he formed News Corp. as a holding company to better organize his assets in preparation to expand greatly into the United States. Rupert Murdoch had billions of dollars, control of a great deal of print media, and - by extension of those two facts - friendly associates in the private and public sectors.
And here was a Major Film Studio, 20th Century-Fox, and an aspirational
Major Television Broadcast Network, Metromedia, both looking for a buyer. If a single company controlled both, why, it would be the first Film Studio-Broadcast Network merger! Think of the money to be made...
Stay tuned for
- OK we know what's coming next. FOX, FOX, MOUSE!
Thursday, April 23, 2020
Part Nine: Streaming Leaving Los Angeles or, Life in the Woods
Note:
This post, this website in general, does not represent the views of
anyone. Including myself. Especially this post! This is a naughty post
and should be disregarded at all costs. I LOVE YOU CHICKEN SOUP. YOU GOT THE POWA! Of Soup!
Remember back to my earlier post about the early days of streaming? How early streaming adopters like YouTube and Grouper grew into the millions of subscribers range before being bought out by Google and Sony respectively? If not go have a peeksie! I'll wait! Sports Jeopardy theme plays
So let's dive back into those early days of Grouper. Back in 2004 Grouper was launched as a Napster or Limewire or KaZaA style Peer to Peer (p2p) file sharing application. And it was good at what it did. It even won a PC Magazine Award for its p2p prowess less than a year after launch. But what got the attention specifically of Hollywood was how that p2p software was planning on being implemented. Its core programming was to set up small Groups (GET IT) of no more than 30 or so people who would use the p2p software to legally share legally owned copyrighted audio visual material, a virtual "home" media server if you will. But as copyright owners in 2005 were less-than-enthusiastic about releasing onto the web official digital, shareable versions of their content, Grouper implemented two key features that would veer it off its p2p route and cement it into the history of the early days of streaming.
The Grouper development team, in an anti-piracy measure, integrated a streaming audio feature. If you had access to the app and a group, you could access any user's audio files but only (easily) as streaming media. This pushed users towards immediate use and discarding of content. The developers also created a very rudimentary video editor subapplication called Groovie. This heavily encouraged user-created content, instead of relying on copyright holders to agree to (what they believed to be) loosely regulated online distribution, and brought with it the rapid user-base expansion that comes along with amateur-created content. As these two features rocketed in popularity, by the middle of 2005 the future path became clear: drop out of the decentralized p2p sharing game and create a centralized server-based, user-content hosting platform of video files. They integrated a series of new features that rapidly became streaming industry standards like thumbnail preview walls, content filtering, and most importantly they published viewership data to RSS feeds and their API (HEY NERDS). By doing the latter, search engines began redirecting users in droves to Grouper. When Yahoo! launched their video search, half of the results were links to Grouper videos.
2005 was a great year for Grouper. And Hollywood took notice.
In August of 2006, Sony Pictures bought Grouper whole for 65 million dollars. Less than a year later Grouper was re-branded Crackle, pivoted away from user-created content (while hoping the user-base would remain faithful), and became the first Major Film studio Direct-to-Consumer Video on Demand service.
At the time of Crackle's rebranding, Sony Pictures was experimenting around with ways to distribute streaming video online. Again remember in the mid 2000s, feature length films and television series were deemed too large for much consumer bandwidth speeds and the fear of piracy kept studios hesitant from releasing that content online. Inspired by a Seven Minute cut down of the entire Sopranos series, Sony executives announced a new "network". Well a MySpace page sponsored by Honda...
The Minisode Network! Sony Pictures would make officially licensed five minute cut downs of dozens of Sony Pictures and Columbia Television content and release them onto MySpace. This solved both the bandwidth and piracy problem, as these shorts essentially acted as promotional material for the full-length original content. (And brought in some advertising dollars to boot!)
With the rebranding of Crackle to a studio-content service, The Minisode Network was pushed over onto Crackle not-long-after as a channel / category. A few original shorts were produced (Rescue Me and Breaking Bad) to fill in space between seasons. (Tracking them down as DVD bonus features are a must for completionists.) But with wired and wireless internet speeds increasing and Netflix demonstrating the viability of legal streaming content, by 2009 The Minisode Network had completely folded into Crackle, being replaced by full length Sony Pictures Films and Television Shows. But it did bring with it one very important thing to the Crackle team: its close ties to the Film and Television Production wings of Sony Pictures.
So in 2009 Sony Pictures began producing its first bits of original content for Crackle. Shows like Trenches, Angel of Death, and Star-ving began rolling over during the first half of the year. Over the course of the next decade, Sony Pictures allowed Hollywood Stars to produce their passion projects on Crackle. The core idea here was to let the Original Programming do the majority of the Marketing, Advertising, and Sales work for them. Why spend money on a temporary cross-channel television marketing campaign or internet banner ads or the like when you could hope that one of your original programs became a massive hit and flocked users to your service? That way, your investment will live forever as permanent content instead of temporary advertising.
Such examples would be:
By 2019, Sony Pictures began looking for investors and / or buyers and struck a deal with
Chicken Soup for the Soul, LLC from Cos Cob, Connecticut.
Realizing that books had more in common with films and television series than broth (they do sell officially licensed Chicken Soup for the Soul chicken soup), beginning in 2017 print publishing company CSS LLC began buying up media content creators and distributors. Their first notable purchase was Screen Media Ventures, a small production studio and (more importantly) a rights aggregator of other independent films. While Screen Media Ventures had its own streaming service built in, Popcornflix, CSS knew they had to grow the brand to stand out in a quickly crowding space. They followed that purchase up with Truli Media (another content aggregator) and Pivotshare (a content distributor). Their March 2019 purchase of the controlling shares of Crackle was their crown jewel. Sony in turn received about 32 million dollars of Chicken Soup stock (ba-dum-tish!) and Crackle was no longer a Hollywood-owned business.
As it stands today, Sony Pictures is the only Major Film Studio without a Direct-to-Consumer streaming service, despite launching the first one way back in 2006. But Sony Pictures still has a distribution deal with CSS, so you will still find much of Crackle's content remains Sony Pictures'. Though as these deals expire and Crackle loses its connection to one of the five deep studio content archives, expect even more of Popcornflix, Truli, and Pivotshare's content to migrate onto Crackle's front pages.
As for all that Sony Pictures content that's leaving Crackle...
Well...
What can I say?
...Stay Tuned for What I got to Say!
Remember back to my earlier post about the early days of streaming? How early streaming adopters like YouTube and Grouper grew into the millions of subscribers range before being bought out by Google and Sony respectively? If not go have a peeksie! I'll wait! Sports Jeopardy theme plays
So let's dive back into those early days of Grouper. Back in 2004 Grouper was launched as a Napster or Limewire or KaZaA style Peer to Peer (p2p) file sharing application. And it was good at what it did. It even won a PC Magazine Award for its p2p prowess less than a year after launch. But what got the attention specifically of Hollywood was how that p2p software was planning on being implemented. Its core programming was to set up small Groups (GET IT) of no more than 30 or so people who would use the p2p software to legally share legally owned copyrighted audio visual material, a virtual "home" media server if you will. But as copyright owners in 2005 were less-than-enthusiastic about releasing onto the web official digital, shareable versions of their content, Grouper implemented two key features that would veer it off its p2p route and cement it into the history of the early days of streaming.
The Grouper development team, in an anti-piracy measure, integrated a streaming audio feature. If you had access to the app and a group, you could access any user's audio files but only (easily) as streaming media. This pushed users towards immediate use and discarding of content. The developers also created a very rudimentary video editor subapplication called Groovie. This heavily encouraged user-created content, instead of relying on copyright holders to agree to (what they believed to be) loosely regulated online distribution, and brought with it the rapid user-base expansion that comes along with amateur-created content. As these two features rocketed in popularity, by the middle of 2005 the future path became clear: drop out of the decentralized p2p sharing game and create a centralized server-based, user-content hosting platform of video files. They integrated a series of new features that rapidly became streaming industry standards like thumbnail preview walls, content filtering, and most importantly they published viewership data to RSS feeds and their API (HEY NERDS). By doing the latter, search engines began redirecting users in droves to Grouper. When Yahoo! launched their video search, half of the results were links to Grouper videos.
2005 was a great year for Grouper. And Hollywood took notice.
In August of 2006, Sony Pictures bought Grouper whole for 65 million dollars. Less than a year later Grouper was re-branded Crackle, pivoted away from user-created content (while hoping the user-base would remain faithful), and became the first Major Film studio Direct-to-Consumer Video on Demand service.
At the time of Crackle's rebranding, Sony Pictures was experimenting around with ways to distribute streaming video online. Again remember in the mid 2000s, feature length films and television series were deemed too large for much consumer bandwidth speeds and the fear of piracy kept studios hesitant from releasing that content online. Inspired by a Seven Minute cut down of the entire Sopranos series, Sony executives announced a new "network". Well a MySpace page sponsored by Honda...
With the rebranding of Crackle to a studio-content service, The Minisode Network was pushed over onto Crackle not-long-after as a channel / category. A few original shorts were produced (Rescue Me and Breaking Bad) to fill in space between seasons. (Tracking them down as DVD bonus features are a must for completionists.) But with wired and wireless internet speeds increasing and Netflix demonstrating the viability of legal streaming content, by 2009 The Minisode Network had completely folded into Crackle, being replaced by full length Sony Pictures Films and Television Shows. But it did bring with it one very important thing to the Crackle team: its close ties to the Film and Television Production wings of Sony Pictures.
So in 2009 Sony Pictures began producing its first bits of original content for Crackle. Shows like Trenches, Angel of Death, and Star-ving began rolling over during the first half of the year. Over the course of the next decade, Sony Pictures allowed Hollywood Stars to produce their passion projects on Crackle. The core idea here was to let the Original Programming do the majority of the Marketing, Advertising, and Sales work for them. Why spend money on a temporary cross-channel television marketing campaign or internet banner ads or the like when you could hope that one of your original programs became a massive hit and flocked users to your service? That way, your investment will live forever as permanent content instead of temporary advertising.
Such examples would be:
- Dennis Quaid in The Art of More
- Adam Brody, Martin Freeman, and Ron Perlman in StartUp
- Sean Bean in The Oath
- Rupert Grint in Snatch
- Rob Riggle in Rob Riggle's Ski Master Academy
By 2019, Sony Pictures began looking for investors and / or buyers and struck a deal with
Realizing that books had more in common with films and television series than broth (they do sell officially licensed Chicken Soup for the Soul chicken soup), beginning in 2017 print publishing company CSS LLC began buying up media content creators and distributors. Their first notable purchase was Screen Media Ventures, a small production studio and (more importantly) a rights aggregator of other independent films. While Screen Media Ventures had its own streaming service built in, Popcornflix, CSS knew they had to grow the brand to stand out in a quickly crowding space. They followed that purchase up with Truli Media (another content aggregator) and Pivotshare (a content distributor). Their March 2019 purchase of the controlling shares of Crackle was their crown jewel. Sony in turn received about 32 million dollars of Chicken Soup stock (ba-dum-tish!) and Crackle was no longer a Hollywood-owned business.
As it stands today, Sony Pictures is the only Major Film Studio without a Direct-to-Consumer streaming service, despite launching the first one way back in 2006. But Sony Pictures still has a distribution deal with CSS, so you will still find much of Crackle's content remains Sony Pictures'. Though as these deals expire and Crackle loses its connection to one of the five deep studio content archives, expect even more of Popcornflix, Truli, and Pivotshare's content to migrate onto Crackle's front pages.
As for all that Sony Pictures content that's leaving Crackle...
Well...
What can I say?
...Stay Tuned for What I got to Say!
- OK Yes! I'll do my third and fffffffffffinal "Where Are They Now?" post about Fox.
- Why did Netflix succeed a decade ago but would struggle launching now: a POST
- Still trafficking! (Still not that kind!)
- Anime!
- And as always... more!
Tuesday, April 21, 2020
Part Eight: Launching without a Library or, Decanting the Insalubrious
Note:
This post, this website in general, does not represent the views of
anyone. Including myself. Especially this post! This is a naughty post and should be disregarded at all costs. I LOVE YOU VERIZON. I dunk on you because I CARE.
So far I've focused on media consolidation. Film and Television studios coming together and merging their content libraries. Content Producers purchasing Television Networks to offer their content more cheaply to Distributors. Distribution companies buying those libraries to distribute them "in house" but still using their own companies as a distribution service. Followed by non-studio companies realizing that streaming was a legitimate option and studios pivoting to Direct to Consumer opportunities in response.
Whew.
So let's sink into that era from 2007 (the launch of Netflix streaming) to 2017 (when CBS All Access released its first DtC original programming), when the Big Three streaming services ruled online content distribution. Netflix, Amazon Video, and Hulu had their low-volume but high-quality original programming, which was bolstered by high-volume licensed premium content (Netflix & Amazon) and "direct" distributed high-volume library content (Hulu). In this era, there was a brief race to become the next Netflix, Amazon Video, or Hulu... to make the Big Three a Big Four.
One of the industries that was very familiar with the streaming software services was the tech industry, the people and organizations who were writing the backend code that allowed the Big Three streaming services to store, encrypt, and play their media from cloud storage across thousands of individual end users. For example, companies like plex (founded 2009) provided streaming software to many streaming services and launched their own Freemium SVOD service, licensing content from other companies. But the example we're going to talk about today is...
In 2014 semiconductor company Intel Corporation sold the development plans of its upcoming streaming service OnCue to mobile telephone company Verizon. Verizon had a consumer base of millions of American subscribers already paying for a monthly data plan. They had the infrastructure to distribute content wirelessly. Why not use that data plan and wireless infrastructure to stream low-volume but high-quality premium original content? This gives your service a premium feel, (once startup costs are gone) free advertising, and (down the line) some extra to charge for later. It would be like Netflix, Amazon Video, and Hulu... except mobile and without all the "dead weight" as it were. The rest of the library could be licensed "non exclusively" meaning that other streaming services could host it as well. They re-branded OnCue as go90 (a somewhat oblique reference to turning your phone sideways 90 degrees to get a widescreen image instead of vertical video).
The service needed some content and whatever meager media contracts that Verizon inherited from their earlier purchase of AOL was not enough for even an initial launch offering. Verizon grabbed business and production talent from NBCUniversal and YouTube and began producing a few dozen original, serialized shorts. On one hand, Shorts (anything less than 20 minutes) are great because they are cheap, easy to distribute on a 4G signal, and appeal to a younger audience whose advertising tastes are still fluid.
But the downsides were startling and began piling up. Short form content no matter how slickly produced always has that feel of art house or academic, always a turn off for American audiences. Additionally, short form content inherently is difficult to categorize, hampering metadata usage. This lead to poor "what to watch next" suggestions as well as reporting back valuable viewership information to producer and advertisers. Additionally American audiences still tend to consume most of their media at home. Without a major shift in American mobile media consumption habits and without Verizon quickly releasing a verified go90 app onto Roku-like devices and smart televisions, they ham-stringed their abilities to reach a wider audience.
One of their key shortcoming harkens back to an example from earlier on this website. When Warner Bros purchased Six Flags outright, they had no previous experience running a collection of theme parks and did not properly set up a an internal system for doing so. Sure, Verizon had hired outside talent to manage go90, but they never really set up a proper semi-autonomous division with independent workflows for those individuals, who were reporting to the Verizon's Consumer Products division. They needed a fix and fast.
In late 2016, Verizon attempted to rectify this problem by purchasing another up-and-coming streaming service, Vessel. Vessel was the brainchild of Jason Kilar and Richard Tom, both former Hulu executives. Verizon was not so interested in Vessel's unique streaming gimmick "subscriptions were used to receive priority access to its channels' newest content" (which first honestly just sounds like you're begging for piracy and second you don't want to unnecessarily paywall and reduce your largest possible audience when your service is niche / just starting up) and immediately trashed that "feature" by shutting down the entire service five days after purchase. Verizon was instead focusing on acquiring Vessel's employees and proprietary corporate lines of business to serve as go90's new and badly needed semi-autonomous division. The original go90 staff was laid off and the keys to the go90 kingdom were passed onto the former-Vessel employees.
With Vessel's structure came a renewed attitude as well as more inside-the-entertainment-industry deals. Where cost was no object before the Vessel acquisition to mitigate the startup timeline, cost became no object again in order to expedite a whole slew of new, premium, A level talent content. Ben Affleck and Matt Damon's show The Runner, Rob Gronkowski's MVP, Hasbro's Transformers: Prime Wars Trilogy, and Capcom / Machinima's Street Fighter: Resurrection were just a few of the series-length shows to appear on go90.
And yet while the acquisition of Vessel ruthlessly solved a handful of the issues, two glaring issues remained. First off the limited distribution avenues by making the service only available to Verizon customers (non-Verizon customers could not buy a streaming plan) who only could view it off their mobile phone (no Roku-type app existed). And secondly, content. Americans love to binge, either by turning on a TV and just letting it play in the background or by firing up 180 episodes of Seinfeld (or any deep-library TV series) on an SVOD service and letting it go, baby. Having only a handful of series, padded with nonexclusive content that could be found anywhere else, does not lend your streaming service towards binging. Costs were up and subscriptions were not growing.
A few hail-mary passes were made: Verizon-owned tumblr and Yahoo! began distributing go90 content internationally, as an attempt to get extra viewership without breaking any domestic distribution agreements. But it was too little, way too late. They would not budge on non-Verizon avenues of distribution and there were no serious attempts to exclusively license deep library content.
$1.2 billion in the hole from the purchase of OnCue, Vessel, and making the expedited Hollywood deals, one year and five months after the Vessel purchase Verizon shut down go90 and sold off its production studio to Viacom.
So now in 2020 with Direct to Consumer streaming distribution drying up the nonexclusive and exclusive content licensing contracts, non-studio players who have relied on licensing contracts like (Netflix and Amazon) and non-studio players who have relied on high-quality, low-volume content (like Apple) should take heed on Verizon's go90 mistakes. One of the major concerns, avenues of distribution, has been surely settled. All these services have apps for almost every device. But two of go90's problems still haunt these non-DtC services: Amazon and Apple, the two tech companies, have an imperative to further solidify their streaming service's independence and divisionification within their parents' corporate structures. And secondly, all three of them to ensure their permanent survival need to acquire deep libraries. And only a handful remain...
As a final note, a POSTSCRIPT if you will, remember Hulu and Vessel executive Jason Kilar? When Verizon bought Vessel and folded it into go90, Jason left Verizon. Where did he go, you may ask? Well, Verizon rival at&t announced earlier this month that Jason would be placed in charge of at&t asset and one of the five content libraries: WarnerMedia.
It's all about those content libraries. That's the open secret, Cap.
Coming up next!
So far I've focused on media consolidation. Film and Television studios coming together and merging their content libraries. Content Producers purchasing Television Networks to offer their content more cheaply to Distributors. Distribution companies buying those libraries to distribute them "in house" but still using their own companies as a distribution service. Followed by non-studio companies realizing that streaming was a legitimate option and studios pivoting to Direct to Consumer opportunities in response.
Whew.
So let's sink into that era from 2007 (the launch of Netflix streaming) to 2017 (when CBS All Access released its first DtC original programming), when the Big Three streaming services ruled online content distribution. Netflix, Amazon Video, and Hulu had their low-volume but high-quality original programming, which was bolstered by high-volume licensed premium content (Netflix & Amazon) and "direct" distributed high-volume library content (Hulu). In this era, there was a brief race to become the next Netflix, Amazon Video, or Hulu... to make the Big Three a Big Four.
One of the industries that was very familiar with the streaming software services was the tech industry, the people and organizations who were writing the backend code that allowed the Big Three streaming services to store, encrypt, and play their media from cloud storage across thousands of individual end users. For example, companies like plex (founded 2009) provided streaming software to many streaming services and launched their own Freemium SVOD service, licensing content from other companies. But the example we're going to talk about today is...
The service needed some content and whatever meager media contracts that Verizon inherited from their earlier purchase of AOL was not enough for even an initial launch offering. Verizon grabbed business and production talent from NBCUniversal and YouTube and began producing a few dozen original, serialized shorts. On one hand, Shorts (anything less than 20 minutes) are great because they are cheap, easy to distribute on a 4G signal, and appeal to a younger audience whose advertising tastes are still fluid.
But the downsides were startling and began piling up. Short form content no matter how slickly produced always has that feel of art house or academic, always a turn off for American audiences. Additionally, short form content inherently is difficult to categorize, hampering metadata usage. This lead to poor "what to watch next" suggestions as well as reporting back valuable viewership information to producer and advertisers. Additionally American audiences still tend to consume most of their media at home. Without a major shift in American mobile media consumption habits and without Verizon quickly releasing a verified go90 app onto Roku-like devices and smart televisions, they ham-stringed their abilities to reach a wider audience.
One of their key shortcoming harkens back to an example from earlier on this website. When Warner Bros purchased Six Flags outright, they had no previous experience running a collection of theme parks and did not properly set up a an internal system for doing so. Sure, Verizon had hired outside talent to manage go90, but they never really set up a proper semi-autonomous division with independent workflows for those individuals, who were reporting to the Verizon's Consumer Products division. They needed a fix and fast.
With Vessel's structure came a renewed attitude as well as more inside-the-entertainment-industry deals. Where cost was no object before the Vessel acquisition to mitigate the startup timeline, cost became no object again in order to expedite a whole slew of new, premium, A level talent content. Ben Affleck and Matt Damon's show The Runner, Rob Gronkowski's MVP, Hasbro's Transformers: Prime Wars Trilogy, and Capcom / Machinima's Street Fighter: Resurrection were just a few of the series-length shows to appear on go90.
And yet while the acquisition of Vessel ruthlessly solved a handful of the issues, two glaring issues remained. First off the limited distribution avenues by making the service only available to Verizon customers (non-Verizon customers could not buy a streaming plan) who only could view it off their mobile phone (no Roku-type app existed). And secondly, content. Americans love to binge, either by turning on a TV and just letting it play in the background or by firing up 180 episodes of Seinfeld (or any deep-library TV series) on an SVOD service and letting it go, baby. Having only a handful of series, padded with nonexclusive content that could be found anywhere else, does not lend your streaming service towards binging. Costs were up and subscriptions were not growing.
A few hail-mary passes were made: Verizon-owned tumblr and Yahoo! began distributing go90 content internationally, as an attempt to get extra viewership without breaking any domestic distribution agreements. But it was too little, way too late. They would not budge on non-Verizon avenues of distribution and there were no serious attempts to exclusively license deep library content.
$1.2 billion in the hole from the purchase of OnCue, Vessel, and making the expedited Hollywood deals, one year and five months after the Vessel purchase Verizon shut down go90 and sold off its production studio to Viacom.
So now in 2020 with Direct to Consumer streaming distribution drying up the nonexclusive and exclusive content licensing contracts, non-studio players who have relied on licensing contracts like (Netflix and Amazon) and non-studio players who have relied on high-quality, low-volume content (like Apple) should take heed on Verizon's go90 mistakes. One of the major concerns, avenues of distribution, has been surely settled. All these services have apps for almost every device. But two of go90's problems still haunt these non-DtC services: Amazon and Apple, the two tech companies, have an imperative to further solidify their streaming service's independence and divisionification within their parents' corporate structures. And secondly, all three of them to ensure their permanent survival need to acquire deep libraries. And only a handful remain...
As a final note, a POSTSCRIPT if you will, remember Hulu and Vessel executive Jason Kilar? When Verizon bought Vessel and folded it into go90, Jason left Verizon. Where did he go, you may ask? Well, Verizon rival at&t announced earlier this month that Jason would be placed in charge of at&t asset and one of the five content libraries: WarnerMedia.
It's all about those content libraries. That's the open secret, Cap.
Coming up next!
- Who else made mistakes? Dare I say? I dunno man I don't wanna be BANHAMMERED 5eva
- You mean like Fox? SHHHHHHHH
- I'll happily give you the BORING inside information!
- Can you talk some more about theme parks and cross-media usage of intellectual properties? You bet your sweet bippity!
- Ultraviolet? Redbox? COLORS!
- And mmmmmmmmmmmmmore!
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