Amazon Prime Video to Include Advertising, Apple TV+ and Advertising, Thursday Q&A

Happy Thursday. We will begin in paid streaming land and conclude with the latest installment of Thursday Q&A.

Let's jump right in.

Amazon Prime Video to Include Advertising

Here’s Variety:

“Viewers of landmark series on Amazon Prime Video like ‘The Boys’ or ‘The Marvelous Mrs. Maisel’ will soon be offered something never made available on the service before: TV commercials.

Amazon Prime Video, one of the last mainstream streaming services to eschew the injection of regular commercial breaks into its movies and shows, plans to start letting them run early next year. Amazon follows a host of other streaming hubs — including Disney+, Netflix, and Warner Bros. Discovery’s Max– that also offer ad-supported tiers, a move that suggests the world of streaming may just eventually mirror the world of traditional television in the not-too-distant future

‘The TV industry has really never been able to truly control itself when it comes to aggressive monetization,’ says Tim Hanlon, CEO of Vertere Group, a media-industry consultancy.

The company says it plans to run fewer ads on Amazon Prime Video than traditional broadcasters or broadband rivals. Four minutes per hour seems to be a benchmark for the lowest amount of ad time on a streaming platform. Commercials will first appear the U.S., U.K., Germany, and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year. Those who want to keep Amazon Prime Video ad-free can still do so — for an additional $2.99 per month in the U.S. on top of the annual subscription to Amazon’s overall Prime service.”

There was a feeling in the air that this development was inevitable, especially given Amazon's focus on ramping up paid subscription revenue. According to Amazon, ads are being introduced on Prime Video “[t]o continue investing in compelling content and keep increasing that investment over a long period of time…”

In what has become something of a trademark in paid streaming, the addition of advertising is typically accompanied by a price increase for those who don’t want ads. In Amazon’s case, the $3/month add-on amounts to a 33% price increase to the standalone price for Prime Video.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Branding in Paid Video Streaming, Amazon 4Q22 Earnings (Daily Update)

Hello everyone. We will begin today's update with one topic from yesterday that deserves more attention: branding in video streaming. Branding will gain importance as competition intensifies. The discussion will then turn to Amazon earnings. We go over Neil’s thoughts on the company’s 4Q22 earnings release and conference call.

Let's jump right in.

Branding in Paid Video Streaming

One of the more controversial debates in paid video streaming has been found with branding.

A few years ago, Bob Greenblatt, formerly of WarnerMedia, claimed Netflix lacked a brand:

“It's just a place you go to get anything -- it's like Encyclopedia Britannica. That's a great business model when you're trying to reach as many people on the planet as you can."

At the time, his comments lit a firestorm in various streaming circles. Some people thought he was right while others thought he was clueless. My view was that he was more right than wrong. Greenblatt was referring to Netflix not having any discernible content branding. While Netflix has had hit shows, the service was known more as a destination for consuming general video entertainment. “Watch Netflix” was used by some to simply mean watch TV.

HBO wrapped its brand around marquee shows. Say HBO and “Game of Thrones” or “Succession” probably comes to mind.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Amazon 3Q22 Earnings, The Shift in Selling Amazon Prime, Microsoft 1Q23 Earnings (Daily Update)

In today’s update, we wrap up our earnings reviews for the four tech giants (and Meta) by circling back to cover Amazon’s and Microsoft's CY3Q22 earnings. To recap, these are the dates when we covered earnings from the others:

The five companies represent 21% of the S&P 500 index. The discussion includes Neil’s thoughts on the most interesting takeaways from the reports.

Amazon 3Q22 Earnings

Amazon reported 3Q22 results back on October 27th, one day prior to Apple’s earnings.

Overall, the quarter was more negative than what the company reported three months earlier.

Amazon has stood out among Big Tech for facing the most direct impact from macro issues.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Disney Considering Memberships, Apple One’s Strategic Value, More Details About Netflix’s Upcoming Ad Tier (Daily Update)

Hello everyone. Welcome to September.

As of now, my expectation is that Tuesday’s update will be published late on Monday (ET). It will be dedicated to going over my thoughts and expectations heading into Apple’s “Far out” product event.

Let’s jump into today’s update.

Disney Considering Memberships

Over at the WSJ, here are Jessica Toonkel and Sarah Krouse:

“Walt Disney Co. is exploring a membership program that could offer discounts or special perks to encourage customers to spend more on its streaming services, theme parks, resorts and merchandise, according to people familiar with the discussions.

The program would be somewhat akin to Amazon Prime, which offers advantages such as free shipping, discounts at Whole Foods and a complementary streaming video service for a monthly or annual fee, the people said. Internally, some executives have referred to Disney’s initiative as ‘Disney Prime,’ although that won’t be the name of the program, one of the people said.

Discussions at Disney are in the early stages. It couldn’t be learned how much the company would charge for membership and how long it would take to launch such a program.

By creating a membership program, Disney would be betting it could offer customers more value, prompting them to spend more on the company’s products and services, while providing Disney with a trove of information about their preferences.

The effort is supported by Disney Chief Executive Bob Chapek, who has been vocal both internally and publicly about the opportunity for Disney to do more to cross-sell to customers, the people familiar with the discussions said."

Disney provided a statement to the WSJ confirming that it is indeed exploring a membership program. The WSJ also claims that Disney has “studied” Apple One in terms of coming up with its own membership program.

My first reaction after reading this story this morning was “it’s about time.” My next thought was wondering if they would call it “Disney One” to signify having various Disney experiences available in one place.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.