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Taking the Temperature of Top Media/Tech Companies, July 21-27

Taking the Temperature of Top Media/Tech
Cheyne Gateley/VIP

The VIP Heat Index evaluates the latest moves made by the companies dominating the previous week’s biggest tech and media headlines. Here’s how the temperature checks stack up for the week of July 20…

Twitter Rebounds From Infamous Hack With Q2 User Surge and Subscription Push

Twitter shares jumped over 4% following its Q2 earnings, which missed on revenue ($683 million vs. $707 million expected) but smashed daily user expectations (186 million vs. 173 million). The social company’s ad revenue was 23% down year-over-year in Q2, but Dorsey’s announcement that Twitter would likely start testing a subscription offering later in 2020 made the ad rev drop less worrisome. The user jump is particularly positive for Twitter, as it needs to project that it still has its act together after its embarrassing hack on July 15.  

The New York Times Gets Serious About Podcast Operation with Serial Acquisition

The Times is positioning itself more and more to be the HBO of audio. In addition to its signature “The Daily” podcast, which is virtually always chart-topping, the Times disclosed it acquired Serial Productions for $25 million last Wednesday. Serial’s “Serial” is credited with helping break podcasts into the mainstream. There’s an interesting possibility we could see a new subscription offering from the Times that includes “The Daily” and forthcoming Serial productions (an idea floated by NYT’s Ben Smith in March). We’ve written about the difficulties of paid podcast offerings before… but it’s different when it’s coming from heavyweights of “The Daily” and “Serial”-caliber fame. The publication is perfectly poised to translate its high-quality brand to a new medium.

AT&T Still Waiting for HBO Max’s Breakout Moment

AT&T’s just-launched HBO Max didn’t help its case with investors during its Q2 earnings last Thursday, when it beat on earnings ($0.83 vs. $0.79 expected) but reported 1 million Q2 pay-TV losses and pandemic-injured WarnerMedia revenue (down 23% year-over-year). Only 5% of HBO TV subscribers who are eligible for Max have activated so far; HBO Max has attracted 3 million brand new customers. Count HBO TV subs that could’ve converted to Max for free, and that figure turns into 4.1 million. But AT&T’s talk of “retail,” “wholesale” and 36.3 million total HBO and HBO Max subs confused things when the market was looking for clarification. Read our full write-up that demystifies AT&T’s SVOD jargon here.

Snap Gets Burned for Just-Almost Hitting Wall Street Growth Expectations 

Snap shares dropped by over 8% after its Q2 earnings last Tuesday, as investors punished the company for its user growth (up 17% year-over-year), which was just shy of the 18% it had guided for. Still, last week may end up as more of a blip on Snap’s overall 2020, where Snap shares have gained more than 50% year-to-date. Snap’s Q2 beat on revenue ($454 million vs. 442 million expected), which is almost entirely advertising-driven, signals it wasn’t initially battered by the outbreak as much as some might have feared. And given Q2 is anticipated to be the weakest ad spend quarter for 2020, Snap shares seem well positioned to finish 2020 at a higher price than where they started.

AMC Theaters Delays Reopenings as “Tenet” and “Mulan” Enter Limbo

Summer 2020 has become even more painful for U.S. movie theater chains like AMC, as last week saw a wave of movies led by “Tenet” and “Mulan” were further delayed. Following the “Tenet” news, AMC announced it was delaying reopening theaters by at least two weeks, which we deemed as inevitable before the announcement. Cineworld (Regal owner) and Cinemark, the other U.S. exhibition giants, have joined AMC in delaying reopenings, highlighting how theaters stand no chance at luring COVID-19-fearing consumers without a marquee product like “Tenet” or “Mulan.” The delays aren’t as big a hit for Warner Bros. or Disney, which aren’’t solely revenue-dependent on the theatrical business and could opt for overseas theatrical releases first. 

AMC Networks Dodges Legal Bullet From “Walking Dead” Producers

AMC Networksnot the company having nightmares about “Tenet”scored a huge legal win last Wednesday with a ruling determining the company had compensated “Walking Dead” producers what they were owed. That’s a sigh of relief for AMC, which avoids paying through the nose for the highest-rated cable TV series ever. But AMC’s attention must now be turned to a separate trial, which alleges that AMC has cheated Frank Darabont (an early “TWD” showrunner) out of millions by licensing “TWD” to itself (AMC produced and distributes the show). The decision from that trial, taking place April 2021, will be critical to watch for companies like AT&T, which also have the opportunity to “self-deal” shows.

Fox News Anchors Face Sexual Misconduct Claims

Jennifer Eckhart, a former female Fox News producer, and Cathy Areu, a frequent Fox News guest, sued the network and accused former longtime Fox anchor Ed Henry, as well as Sean Hannity, Tucker Carlson and Howard Kurtz, of sexual misconduct last Tuesday. Eckhart’s allegations against Henry were denied by his lawyer, though they were not challenged by Fox (Henry was fired earlier in July). Fox denied claims against Hannity, Carlson and Kurtz.  The network’s loyal viewers may not be troubled, but the grisly allegations leveled are reminiscent of the conservative network’s past scandals, one of which led to an advertiser boycott. Fox News, which has been the most watched network on cable for 28 straight weeks, similarly may be placing ad spend at risk if it botches the investigation and handling of allegations against its anchors.

Amazon Finalizing Deal for Michael B. Jordan Starrer “Remorse” From Paramount

Amazon is near securing a deal for the global rights to a thriller adaption of Tom Clancy’s “Without Remorse,” Variety reported last Thursday. What makes “Remorse” potentially significant is its franchise potential: Michael B. Jordan was initially pitched by Paramount to star in more than one Tom Clancy adaptation, according to Deadline’s Justin Kroll. A star-driven action franchise would be huge to help diversify the film strategy of Amazon, which has previously found more success in catering to the awards crowd. It would also help Prime Video stack up to Netflix, which recently successfully kicked off its own star-driven action originals, “Extraction” and “The Old Guard,” with franchise potential.