On The Rock
Happy Sunday!
In this issue, we'll focus on media and sports, where the balance between ad-supported and ad-free content is shifting. Streaming prices have surged due to economic challenges, with Netflix set to raise the cost of its ad-free tier in response to the recent Actor's Strike. Meanwhile, social media platforms are exploring ad-free subscription services, such as Meta's plans for Facebook and Instagram in the EU and TikTok's ad-free subscription tier.
Media
Netflix NFLX 0.00%↑ is taking steps to enhance engagement and boost additional revenue. One strategy involves the sale of merchandise. Previously, the company produced merch tied to its shows. However, it now creates merch well in advance of a show's release.
According to a recent report by iSpot.tv, Spanish-language household TV ad impressions surged by more than 27% year-over-year, reaching a total of 181.1 billion in the first half of 2023. As of August 31 in the third quarter, Spanish-language households had accumulated 66.7 billion impressions.
Another study conducted by Vevo and Publicis suggests that streaming TV is becoming similar to traditional TV, with viewers switching between apps instead of channels and watching commercials. The study reveals that over 50% of millennial and Gen X viewers watch FAST (Free Ad-Supported Streaming Television) channels monthly, with 89% of viewers believing FAST channels offer great value. Additionally, 80% of viewers primarily watch TV programming on a television set.
Warner Bros. Discovery's streaming service, Max, maintains the highest customer satisfaction rating, currently at 88%. This places Max one point ahead of Hulu and three points ahead of Disney+.
Lastly, Spotify is reportedly working on AI-powered playlists, allowing users to create personalized playlists through prompts. AI-generated playlists could offer users a more personalized and engaging music experience within the app.
Sports
Major League Baseball's Houston Astros and the NBA's Houston Rockets have acquired AT&T SportsNet Southwest from Warner Bros Discovery. They intend to relaunch the channel as the "Space City Home Network." This marks Warner Bros Discovery's exit from the regional sports network business, a move compelled by their merger of WarnerMedia and Discovery 18 months ago.
Amazon AMZN 0.00%↑ is set to invest nearly $16 million as a co-sponsor for a new professional cycling team formed through the merger of Holland's Jumbo-Visma and Belgium's Soudal-QuickStep World Tour teams during the upcoming off-season.
Tiger Woods and Rory McIlroy's virtual golf league have successfully secured ESPN as their US media rights partner ahead of the January launch. While financial details remain undisclosed, ESPN had the first option for the league's rights, along with fellow PGA Tour broadcast partners CBS Sports and NBC Sports. The PGA Tour maintains a partnership with the league's parent company, TMRW Sports, but the league also held negotiations with other potential broadcast partners.
