With news from the media/tech landscape flooding your inboxes daily, the VIP+ team stands ready to sift through the biggest stories of each week and share their insights in a rousing discussion every Friday on LinkedIn Live at 11:30 a.m. PT / 2:30 p.m. ET.
If you missed this week’s action, you can replay the entire session (just be sure to hit the play button). And do get caught up on our picks for the stories that heated up the week that was.
Kaare Eriksen, Information Editor
After multiple rounds of extensive layoffs and the infamous decision to make the 2021 Warner Bros. film slate available to stream on 2020 SVOD entrant HBO Max alongside the company’s theatrical releases, WarnerMedia CEO Jason Kilar’s hectic pandemic tenure is on track to end as Discovery’s David Zaslav is set to fill his role and steer the merging companies.
Ultimately, Kilar’s call on Warner Bros. is turning out to be a wildly reckless move. It may have helped drive up HBO Max subscriptions, but it has left a costly mess that could amount to over $1 billion from lost box office revenues, profit participation payouts to talent and licensing fees paid by the streaming unit.
Film exhibition is in recovery mode but should continue improving over the coming months. Currently leading in domestic gross is none other than Warner Bros., which has earned more than $220 million after the successful turnout for “Godzilla vs. Kong” brought in nearly $100 million stateside and more than $400 million globally alongside a steady stream of wide releases like “Tom & Jerry” and “Mortal Kombat” (all per Box Office Mojo).
One can only wonder how much Warner Bros. would be making if there wasn’t a streaming option at home. Given how summer sequels to “Space Jam” and “Suicide Squad” and a new “Matrix” film in December are still tied to HBO Max, Kilar’s move may have simply aided COVID-19 in hurting WarnerMedia’s film business that much further.
Gavin Bridge, Senior Media Analyst
Details were finally confirmed for HBO Max’s ad-supported tier this week, and they hardly set the pulse racing. Current WarnerMedia CEO Jason Kilar may have sorted out the tech mess in which HBO Max found itself under the prior regime, but his vision of an ad-supported tier suggests he may be a one-trick streaming pony.
Ignoring the rise of linear streaming services since 2013 when he left Hulu, Kilar blew the dust off his old blueprints and slapped “HBO Max” on top. Unlike NBCU’s Peacock and Discovery’s Discovery+ service, there are no linear streaming channels included in the new HBO Max tier, ignoring how these channels increase platform engagement.
The pricing, too, is a little baffling: $9.99 for an ad-supported tier makes HBO Max’s ad-supported SVOD (ASVOD) the most expensive on the market — $5 more than Peacock, Paramount+ and Discovery+ and $4 more than Hulu. Had there really been hordes of consumers sitting there for years saying, “If only HBO was $5 cheaper, I would surely subscribe.”
As it stands, HBO content won’t have ads, but other content on the ASVOD tier will. The ad-supported version also won’t have movies from Warner Bros., but certainly a better, more marketable solution that would preserve the current market valuation of HBO programming would have been to release a $4.99 tier just with Turner, Warner Bros. and licensed content.
The only reason to assume this didn’t happen is a fear that it wouldn’t stand up in the market, but the combined Turner and WB libraries are deep and would be worth a competitive market price.
Heidi Chung, Media Analyst/Correspondent
Remember Redbox, the DVD kiosk company that fell out of favor because of the media industry’s rapid shift toward streaming? Well, this week the company announced it would go public by merging with a SPAC called Seaport Global Acquisition Corp. This announcement comes after it was reported last week that Buzzfeed was in talks to acquire Complex Networks as part of its bigger plan to eventually merge with a SPAC and go public later this year.
Special Purpose Acquisition Companies were one of the hottest trends in the market last year, as investors wanted throw money at them and private companies wanted to merge with them in order to hit the public market. Popularity rose through 2020 and climbed further in the beginning of 2021. According to financial analytics platform Dealogic, SPACs broke last year’s record by raising a whopping $90 billion in just the first three months of this year.
Then in early April, VIP+ noticed the once red-hot SPAC mania was cooling off, and things have only gotten worse. To be fair, the broader market has been volatile over recent weeks as well and investors have been rotating out of riskier trades into safety. Since VIP+’s piece of last month, the SPAC ETF, SPAK, fell another 10%.
As the investor appetite for SPACs continues its precipitous decline, one can’t help but wonder if Redbox and some others in the media space might be jumping on the bandwagon a little too late.
Kevin Tran, Media Analyst
The push to create alternatives to Big Tech-controlled digital platforms is still alive and well in the post-Trump era. Rumble, an online video platform that’s gained much traction among conservatives since the election, received an investment that could value it at around $500 million, the WSJ reported on Wednesday. The influx came from prominent conservative venture capitalists including Peter Thiel and “Hillbilly Elegy” author J.D. Vance.
The funding of Rumble may catch the eye of companies particularly invested in advertising on YouTube, given the former positions itself as a “real YouTube competitor.” After all, Rumble has managed to attract high-profile Republicans including Donald Trump Jr. and Florida Gov. Ron DeSantis amid refreshed conservative concerns that Big Tech favors liberal voices.
But Rumble has a long way to go before it starts seriously eating into YouTube’s viewing time. Rumble attracted on average nearly 32 million users per month during Q1 2021, while nearly 2 billion logged-in users visit YouTube every month. Not exactly the same metrics, but the gap would be wider if it included those who use YouTube monthly without an account.
It’s also unlikely high-profile conservatives will flee YouTube en masse for Rumble given prominent right-wing voices like Ben Shapiro still put up big numbers on the platform. For now, just keep an eye out for which social platform former President Trump picks as his online home next, as he can act as a magnet for alternative tech platforms seeking to poach big-name conservative users.
Andrew Wallenstein, Chief Media Analyst
The new fourth edition of Snap’s kooky Spectacles device might not seem worth much attention. It’s not even going to be put on sale publicly, just distributed to those active in creative augmented reality content.
Snap is one of the early movers into a category that barely exists today yet could be the biggest one of them all years from now: so-called “smartglasses.” Lenses that can be used as screens and cameras with AR graphic overlays could very well follow in mobile’s footsteps as consumers’ primary device.
And while what Snap is doing in the space isn’t revelatory enough to take smartglasses to critical mass one day, it’s a category you can’t afford not to keep an eye on when you consider the other larger players plotting their own product entries in the coming years: Apple, Amazon and Facebook, to name a few.
While the legacy of Google Glass left a bitter taste in the marketplace, some tech company will eventually crack the code on the kind of product that will usher in a whole new tier of the hardware business. Spectacles may not look like much now, but what might seem like tinkering today could lead to the breakthroughs of tomorrow.