The Hollywood Reporter - 06.11.2019

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THE HOLLYWOOD REPORTER 19 NOVEMBER 6, 2019

MURDOCH: DANIELE VENTURELLI/WIREIMAGE. IGER: MICHAEL KOVAC/GETTY IMAGES FOR LACMA. BERLANTI: ANGELA WEISS/AFP VIA GETTY IMAGES.

BELL: HEIDI GUTMAN/NBCUNIVERSAL. HERRIDGE: COURTESY OF CBS. ELLISON: TIM MOSENFELDER/GETTY IMAGES. MAYER: ABC/BOB D’AMICO.

Illustration by Læmeur

Digital

Password Problems

Piracy may be next

front in streaming war p. 22

↑ Labor

M&A Fallout

Job losses widen in

entertainment sector p. 24

$194.72 (+3%)

FACEBOOK (FB)

The social media giant posts

quarterly sales and profit that

exceed expectations; daily

active users jump 9 percent.

$41.40 (-12%)

AMC NETS (AMCX)

Bernstein analyst Todd

Juenger reiterates his “under-

perform” rating after the

operator of cable channels

reports a quarterly loss

in sub fees and ad revenue.

streaming services.” Still, the

number of adults ages 30 to 44

paying for more than five stream-

ing services currently sits at a low

4 percent, per a THR/Morning

Consult poll conducted Oct. 24

to 28, and a July survey of more

than 2,000 adults found that a $21

bill across three services is the

optimal price point to woo many

subscribers. Given that subscrib-

ing to the four new services plus

Netflix and Hulu will cost upward

of $45 a month (not including

the cost of internet access), every

company will need to get creative

to turn these multibillion-dollar

bets into profitable ventures.

Though Disney is starting

from zero to build up its Disney+

subscriber base, Carmel Group

analyst Jimmy Schaeffler calls it

the “1,000-pound gorilla in every

room” thanks to the strength of

its brand, which will be on display

through its library and program-

ming like Star Wars-adjacent

The Mandalorian. Still, without

the advantage of a preexisting

large-scale direct-to-consumer

relationship with its fans, Disney

also is looking to other subscriber

acquisition tactics as it seeks

to hit between 60 million and

90 million members (and reach

profitability) in the next five years,

offering discounts in exchange for

three-year commitments and put-

ting the pieces in place to bundle

the service with ESPN+ and Hulu,

which already have 2 million and

28 million subscribers, respec-

tively. It also has struck a deal

with Verizon to offer Disney+ free

for a year to unlimited wireless

customers, expos-

ing it to as many as

18 million potential

new members.

Where Disney+

could struggle would

be in enticing adults without

children who aren’t swayed by a

lineup heavy with genre fare from

Marvel and Lucasfilm. But direct-

to-consumer and international

chairman Kevin Mayer shrugged

W

hen Disney+ launches

Nov. 12, the new

streaming service will

begin what Disney CEO Bob Iger

hopes is a quick journey to at least

60 million subscribers by the

end of 2024. Six months later, on

a still-to-be-announced date in

May, HBO Max will take off on its

own sprint to hit at least 75 mil-

lion subscribers in 2025.

Instead of the “streaming

wars,” it’s more like a streaming

race as each new entrant that

launches strives to reach ambi-

tious subscriber goals and carve

out a piece of the overall direct-

to-consumer video market. With

U.S. pay TV subscribers expected

As Disney, Apple, AT&T and Comcast bet big on

D-to-C services, lofty membership goals (as many as 90 million)

clash with analyst concerns over marketplace crowding

BY NATALIE JARVEY AND PAUL BOND

to drop from north of 100 mil-

lion in 2014 to 78 million by 2022,

per research from Sanford C.

Bernstein, every company has

recognized an opportunity to

lure those cable defectors (and

recruit digital natives) to their

services. But with four new offer-

ings — Apple TV+, Disney+, HBO

Max and Peacock — flooding the

market over the next year, it’s

anyone’s guess how customers

will respond to the glut of choices,

especially as the cost of several

subscriptions mounts.

“It is not a zero-sum game,”

contends Wedbush Securities

analyst Michael Pachter. “People

can subscribe to multiple

Greg Berlanti

The mega-producer’s record

scripted TV haul grows to

21 with series orders at HBO

Max for DC-inspired dramas

Green Lantern and anthology

Strange Adventures.

Jim Bell

The Tonight Show

showrunner, who had been

with NBC for nearly three

decades, abruptly exits amid

preparations for the network’s

2020 Olympics coverage.

David Ellison

The Skydance Media chief’s

pricey reboot of Te r m i n a to r

crashes at the global box office

with a $123.6 million debut,

likely ending hopes for sequels.

Digital TV’s Great

Subscriber Race Begins

Oct. 28-Nov. 4

Catherine Herridge

CBS News hires the veteran

Fox News reporter, the latest

high-profile journalist to

exit the conservative-leaning

network after anchor

Shepard Smith’s departure.

Mayer