Charter CEO engaged in some irrational exuberance this week. Netflix is shocked, shocked at the success of the download feature. Facebook does an about-face and embraces video pre-roll ads.
Chapter 1: Charter CEO sees TV content fiscal discipline ahead (2:20)
Tom Rutledge, Charter’s CEO, believes we are moving into a period of fiscal discipline for the TV industry. I don’t see it that way at all. I outline four major reasons for my opinion.
- Continued growth in content spending from SVOD
- Continued above-inflation increases in programmer license fees
- Emerging programmer independence from pay TV operators
- Content competition from vMVPDs driving the cost of TV content up.
Chapter 2: Netflix’ Sarandos “shocked” at download’s success (8:40)
Ted Sarandos, Netflix’ Chief Content Officer, was speaking at the UBS conference this week and admitted that the company had completely underestimated how important content downloads would be for customers. Will has been a big proponent of the feature since he started using it with TiVo. He berated Netflix repeatedly for not having the feature.
I was skeptical of the feature too, and personally, I do not use it very much. However, I have noticed how many people I see watching Netflix on planes, trains, and automobiles. Much of this usage is powered by the ability to download shows.
Chapter 3: Facebook reverses itself on pre-roll ads (15:30)
Mark Zuckerberg, Facebook CEO, has stated on numerous occasions that his company would not use pre-roll video ads. However, the company has decided to add them to the Watch product. Previously it has relied exclusively on mid-roll video ads.
Watch is an important product for Facebook. It providers longer form and more premium content. It is targeted at the television, a very important platform for any ad-supported video provider. Engagement times are so much longer on the TV and that means more ad views. I said I would like to see skippable pre-roll ads but Will didn’t think Facebook would provide them. He didn’t think Facebook Watch could deliver enough audience to make skippable ads work.