Media Movers: An Opinionated Look at the Week That Was

Media Movers: Opinionated Look the Week That Was
Cheyne Gateley/VIP

If you were only slightly paying attention to the news last week, you would have seen that Twitter suffered its worst security breach ever. But that might have taken your attention away from other important news like Google’s billion dollar push (via investment) into India. Below is a roundup of the most important things that happened in the media and tech biz last week:

1.) Disney dinged by Hong Kong park closure — foreshadowing for U.S. parks?

Disney shut down its Hong Kong Disneyland last Wednesday, less than a month after reopening. HKDL is one of Disney’s smaller parks (seeing just over 25% the visitors Disney World’s Magic Kingdom saw in 2018), but with its closure we must ask: will Florida, home to Disney’s most lucrative park that just started reopening, follow suit? Pressure is mounting from local officials who want to impose another statewide stay-at-home order amid Florida’s record-breaking COVID deaths. But Disney at this point seems to have no other choice but to take on the big risk of trying to keep its parks open as long as possible due to the financial havoc COVID-19 has wreaked on its broader business.  

2.) Gavin Newsom dashes AMC Theatres, Warner Bros.’ hopes with theater shutdowns

California Governor Gavin Newsom late last Monday mandated the immediate statewide shutdown of indoor businesses, like movie theaters, essentially crushing what little hope exhibitors had left for the 2020 summer season. For now, “Tenet” is still set for August 12th. But with California (largest U.S. film market by theaters) now out of commission, New York (3rd largest U.S. film market) still not permitting theaters to open, you have to assume another “Tenet” delay is all but guaranteed. And without this big blockbuster, other dominoes (“Mulan”) are likely to fall, which would make it so there’s no sense for AMC & Co. to reopen. It’s no wonder why some analysts don’t expect domestic theaters to reopen until 2021.

3.) Netflix Q2 earnings results don’t go over well with investors

Netflix shares dipped as much as 15% on the streamers’ lower-than-anticipated Q3 subscriber guidance (read our full Netflix Q2 review here). Never mind that Netflix months ago warned growth would slow later in 2020; investors’ unrealistic growth expectations were betrayed with that stock slide. However, some investors likely also factored in the news that longtime chief content officer Ted Sarandos was being named co-CEO with Reed Hastings to their reactions. It’s an unusual move that probably didn’t inspire much confidence; note that of the biggest (by revenue) U.S. public companies, only two now have co-CEOs, per Equilar. Additionally, Salesforce, SAP, and Oracle abandoned their co-CEO structure over the last year, as pointed out by the WSJ. 

4.) Google breaks further into India with $4 billion Jio investment

American tech giants and venture capitalists can’t resist betting on Jio Platforms, and Google was the latest to do so with its $4 billion Jio investment last Wednesday. Google’s $4B investment (7.7% stake) makes it the second biggest confirmed Jio investor behind Facebook, which in April committed $5.7B for 10% of Jio. Google will be able to break further into the irresistibly large India market  via the Android OS-running entry level smartphones that Jio will help develop. As a potential added bonus, cozying up to Jio may also ultimately help lower the regulatory burden Googles face in India, because of how tight Mukesh Ambani (Reliance Jio’s owner) is with the ruling party of India.

5.) SiriusXM to boost its podcast chops with Stitcher Acquisition 

Stitcher last Monday announced it was acquiring podcast business Stitcher, which confirmed swirling reports that the latter company was being shopped around. In short, the acquisition makes Sirius a bigger threat in digital audio, and more specifically in the podcast space, given Stitcher’s Midroll ad network and existing original show footprint (read our full write-up on the tie-up here). It’s true that the IAB/PwC’s latest annual podcast ad spend forecast, released last Monday, suggests Stitcher’s podcast biz experienced some cancelled ad campaigns in Q1/Q2 due to the pandemic. But the fact that Stitcher will be part of a broader digital audio portfolio that reaches 150 million listeners means it, and by extension Sirius, are well positioned to attract advertisers when the deal closes.

6.) Peacock launches without major distribution partners and content offering

NBCU’s Peacock streaming service finally became available last week to consumers nationwide after a three-month test run. Too many things were glaringly absent from its launch, mainly: a) Roku/Amazon streaming hardware compatibility, b) Olympics content, per the 2021 Tokyo deferral, and c) the absence of “Friends.” Still, even without these major boxes ticked, Peacock still did seem to get off the ground respectably enough: the back library of other NBCU classics seemed to satisfy many out the gate, for example. Fortunately for Peacock, the weak performance of Quibi (which still can’t escape the daily pile-on) to-date has probably set expectations for a new streamer a little lower.

7.) Twitter faces its worst security breach in its company’s short history 

Where were you when 130 Twitter accounts, including Joe Biden and Jeff Bezos, were hacked to carry out a Bitcoin scam? Cybersecurity firms might be asking candidates that as a wild-card interview question some years from now. But for Jack Dorsey, it’s much less a fun thought experiment, and more a serious embarrassment. Twitter has long combatted notions that Russian trolls used it to influence the 2016 election, and this latest breach couldn’t come at a worse time as election day is approaching. Now, the FBI is digging into the Twitter’s hack, which frighteningly could be much worse than it seems. For now, we should just be thankful the hackers settled on Bitcoin, rather than accomplishing something much more nefarious. 

8.) Vox lays off 6% of staffers in latest sign COVID-19-induced digital media woes 

Vox last Thursday announced it was laying off 6% of its staff, confirming reports earlier that week that cuts would be made. The cuts signal Vox wasn’t able to recover as quickly as it had initially hoped it would from the initial shock of the pandemic in April, when it first furloughed 9% of staff. The collapse of sports-related advertising was cited as a reason for the April furloughs, though, so the absence of major sporting events over the past few months should have provided us with some clue that the road to recovery was still challenging for Vox. With new virus cases on a fresh uptick in July after a steady decline from April to June, Vox’s layoffs aren’t likely to be the last digital media cuts we see in 2020.