Big news from Diamond Sports Group. The company has entered into a Restructuring Support Agreement (RSA) with its largest creditor groups, enabling Diamond to emerge from bankruptcy. As part of the terms, Amazon has also committed to making a minority investment (no details were given, and the media is reporting different numbers ranging from $100M to $125M) in Diamond and entering into a commercial arrangement to provide access to Diamond’s services via Prime Video. Under this arrangement, Prime Video will become Diamond’s primary partner through which customers can purchase DTC access to stream local Diamond channels.

Diamond owns the streaming rights to 5 of the 9 MLB teams it is still broadcasting, including the Detroit Tigers, the Kansas City Royals, the Miami Marlins, the Milwaukee Brewers, and the Tampa Bay Rays. It is unclear if viewers in those markets would need to pay more than the Prime membership to access those games. Diamond said additional details regarding pricing and availability will be announced later.

Customers will be able to access all local DTC content, including live MLB, NBA, and NHL games, and pre-and post-game programming for the teams for which Diamond retains DTC rights through Prime Video Channels. However, there is no guarantee that MLB, NBA and the NHL will continue to work with Bally Sports past this year.

Diamond also announced that it has an agreement in principle with its parent, Sinclair, to settle the pending lawsuit between the companies and the other named defendants. Under the settlement, among other things, Sinclair will pay Diamond $495 million in cash and provide ongoing management and transition services to support Diamond’s reorganization and separation from Sinclair’s operations.

The court must approve any proposed deal since Diamond is in Chapter 11 bankruptcy.

I am live blogging Peacock’s exclusive NFL Wild Card game between the Chiefs and Dolphins, kicking off at 8 pm ET and monitoring the stream across a dozen devices 20+ devices, including multiple models of Apple TV, Fire TV, Roku, Samsung, and LG TVs. Also, various iPads, iPhones, and MacBooks. All devices are connected via ethernet except for iPads and iPhones. I’m never running more than 3 streams at a time and have two internet connections, Verizon and Optimum, at 300 Mbps or greater.

Local NBC stations in Kansas City and Miami will air the game; otherwise, you need a subscription to Peacock or, for viewing on mobile devices, NFL+. Peacock offers a special price of $29.99 for 12 months and a 50% discount for new subscribers using the code PEACOCK2024.

Peacock’s exclusive regular season NFL game last month on December 13 averaged 7.2 million viewers across Peacock, NFL+ and local NBC TV stations in Los Angeles and Buffalo. Adding out-of-home viewership, the game peaked at 8.3 million viewers. The game peaked with 5.7 million concurrent devices using Peacock, and Peacock’s President said they are preparing to handle 5-6 times that number for the playoff game. I do not expect NBC Sports to break out Peacock-only viewers, but I will guess that the average viewership across local TV and digital platforms combined (Peacock and NFL+) is 15-20 million viewers. Peacock had some technical issues during their December game, mostly with what looked like HDR support, so I am hoping they have that all resolved now for the Wild Card game.

Sunday, Jan 14, 10:33 PM ET: Viewership numbers are out. Nielsen says the NFL Wild Card game of the Chiefs and Dolphins had an AMA of approximately 23 million viewers across Peacock, NBC stations in Miami and Kansas City, and on mobile with NFL+. Across all platforms combined, the game peaked at 24.6 million viewers and reached 27.6 million viewers. NBC Sports says Peacock delivered its largest single-day ever in audience usage, engagement, and time spent, with a record 16.3 million concurrent devices. (No details were given on engagement or time spent)

NBC Sports says Peacock “set the record for the most-streamed live event in U.S. history” and “drove the Internet to its largest U.S. usage ever on a single day and the largest Internet event ever, consuming 30% of Internet traffic during the game.” But NBC Sports doesn’t say the source for this statement or the data they are referencing.

As expected, the NBC Sports press release said Comcast “executed flawlessly” with their “streaming experience,” ignoring every user who experienced technical issues. No doubt the game was big, but ignoring all the technical problems encountered by viewers is disappointing.

11:20 PM ET: Game over. NBC Sports will put out viewership numbers in a few days, but that one metric alone doesn’t allow us to judge the success or failure of Peacock’s streaming experience for their exclusive NFL Wild Card game. We don’t know and will never be told what percentage of total viewers had a poor viewing experience versus users who saw no buffering, audio sync issues, application problems, login and billing issues, or other reported problems. The larger the audience, the more technical issues we would expect to see. Like all of these streaming events, we won’t get details on the average bitrate, average viewing time, profit and loss, or other methodology we need to judge the actual success or failure of the event, short or long-term.

I saw far too many problems reported online of varying kinds across all quarters of the game, more than I would have liked to see. It is also important to remember that some viewers signed up for Peacock for this one game, making it feel like a PPV event to them. Some will cancel their Peacock subscription now that the game is over and churn off immediately. So, it will be interesting to see Peacock’s subscription number for Q1 when Comcast reports earnings in April.

I expect the NFL and NBC Sports to call the game a huge success and use lots of grand marketing terms to say how great it was for the league and the future of the NFL and probably even call out that they reached a younger audience. In reality, younger fans are not hanging out on a Saturday night on Peacock or Friday nights on Apple TV+ for Friday Night Baseball. Peacock, Apple TV, and Amazon Prime Video are services, not platforms, and younger sports fans spend their time on platforms like Twitch, TikTok, Discord, and YouTube.

All that aside, we must be honest with ourselves in the industry. Streaming media is not a replacement for broadcast TV regarding reliability, ease of use and quality of the video experience delivered. That’s not a knock on the technology or use case, just reality.

11:011 PM ET: It’s not surprising, but there are many reports of bars nationwide not having the game available for viewing. For a commercial establishment to carry the game, they must get the Peacock Sports Pass from EverPass for $206.99 for the year if paid monthly or $176.99 annually.

10:58 PM ET: From Q3 kickoff to the start of Q4, Peacock ran 11 ad slots, totaling 4 minutes, based on what I recorded using a timer. From Q1 to Q3, I’ve counted more than 35 different brands running ads.

10:15 PM ET: I’ve been busy looking at comments being sent to me along with screenshots, so I haven’t had a chance yet to check the Peacock app on Samsung or LG TVs. I’m also getting a lot of messages on LinkedIn that I am trying to follow up on. There is a lot more I wanted to look at and test across all these devices, but I just never had the time to get to it.

9:53 PM ET: From the start of Q2 to the halftime show, Peacock ran 15 ad slots, totaling 4 minutes and 30 seconds, based on what I recorded using a timer. From kickoff until the halftime show, they ran 38 ad slots, totaling 12 minutes and 15 seconds. All ads looked burned in, and I did not see DAI being used.

9:43 PM ET: With regards to latency, when compared to live radio and users in Kansas City giving me reports from their local TV feed, the streaming latency is as low as 10 seconds and as high as 25 seconds, depending on the device. I saw the highest latency on Roku, which is normal. Fire TV was a little faster for me than Apple TV.

9:20 PM ET: On the video delivery side, Akamai, Amazon, Edgio, Fastly, Lumen and Qwilt are in the mix for delivery, as reported by what I am seeing and what ISPs and others have told me. Two ISPs told me the game has now hit the highest recorded amount of traffic on their network. Comcast recently said that Amazon’s TNF game “comprises roughly 25 percent of all internet traffic on Thursday nights” and that it single-handedly “moved peak data usage on our broadband network from Sunday night to Thursday night.” It will be interesting to see the numbers from ISPs when the game is over.

9:08 PM ET: Regarding problems some viewers see, anything tied to the Peacock app, audio and color issues are on Peacock’s end. But buffering and choppy video could be last-mile issues with ISPs. It’s always hard to know for sure. I don’t know what percentage of users are having problems, so I have not used the words “widespread” or the like since I don’t know how many users are having problems and how many are not.

8:58 PM ET: From kickoff to the end of Q1, Peacock ran 23 ad slots, totaling 7 minutes and 45 seconds, based on what I recorded using a timer.

8:46 PM ET: Across six Twitter hashtags and Peacock accounts, I can’t keep up with all the negative comments, with many posting images or videos (2) (3) of the problems they are seeing. My stream has been good on Fire TV and Apple TV, but I am seeing some audio sync issues on Fire TV.

8:24 PM ET: I’m seeing complaints from users experiencing audio syncing issues, error messages, problems with colors, choppy video, and lots of audio complaints. Some users report payment errors as well.

8:00 PM ET: The stream is live and looks good for me on a few of the devices I have tested it on. Across iPads, the stream is six seconds behind the stream on Apple TV and Fire TV. For the Peacock stream of the Cleveland and Houston game, the stream averaged 15 seconds behind the pay TV feed.

7:17 PM ET: I am monitoring 12 accounts, hashtags, and discussion threads related to the NFL, NBC Sports, and Peacock across Twitter and reddit, in real-time across three iPads, seeing as many comments as possible.

5:52 PM ET: Scammers are hard at work today, knowing many consumers are seeking details about Peacock’s exclusive NFL Wild Card game. Consumers who don’t know any better are coming across multiple fake Peacock websites and getting emails that offer a 7-day free trial to Peacock, except all the offers are fake, and Peacock offers no free trial. I see many comments across the web with people complaining to Peacock, who has to explain that it’s not a legitimate offer. One of the websites is peacockfreetrial, whose name server is in Kenya.

10:37 AM ET: Peacock is already trending on Twitter with many angry comments about consumers having to pay for the game. I know Peacock doesn’t think of this as a PPV event, but for many football fans who only want to see the game and not add another OTT subscription to their household, that’s what it is: a PPV fee to see an NFL Wild Card game. Fans shouldn’t blame Peacock; the NFL sold the game off to them.

NBC Sports executives are reinforcing that this is not a PPV event since a Peacock subscription gives you access to other live sports content, like NCAA Women’s Basketball and WWE, but many football fans see no value in that. There is a difference between an NFL fan and a general sports fan. I watch some NFL games but would never be interested in basketball or WWE content, while other consumers would. But the point isn’t how NBC Sports thinks of their Peacock service; all that matters is how consumers view it. And many consumers are referencing this NFL Wild Card game as a PPV event, whether NBC Sports agrees with that or not.

If you call yourself “highly motivated and results-driven” on LinkedIn, you’re making a mistake. So, for those looking for help getting a job or moving up in the streaming media industry, on Thursday, January 18, at 7 pm ET, I’m hosting a live Zoom  (password is my last name), taking questions and giving out some best practices on job search and placement, LinkedIn profiles and resumes.

I see many resumes, and I help companies (for free) find great potential employees. Over the years, I’ve helped Disney, NBC Sports, Akamai, Comcast, Amazon, Oracle, Edgio, AWS, Microsoft, and dozens of others connect with the right individuals. Those in the industry who can speak intelligently and intelligibly on the value they bring to a company, day one.

With all the layoffs in the streaming industry, plus those looking for new jobs, you have to be able to show your value to a potential employer, and it starts with your LinkedIn profile. Many could be better. I can complain about them or do something to help others, which is the point of live Zoom. I did one of these a few years back with over 100 attendees.

I’ll explain why you must stand out and how to do it. People say they are “detail-oriented,” yet they took no time to remove the default grey background image from LinkedIn. I’ve offered free advice to anyone in the streaming industry on advancing their careers – at no charge – and will continue to do so. But before you talk to anyone, you must set yourself up for success.

Phrases like “top-performing” mean nothing. Top compared to whom? Many people call themselves “coach and mentor” without defining their meaning. What are you coaching others on? If you are looking for an account management job, coaching others in the sales organization is not part of that job unless you are at a specific level. Saying you have “Products and Services Expertise” but not defining what products or services you work with in the streaming video stack isn’t helpful.

The bottom line is that far too many LinkedIn profiles are generic in wording, have broken links and text that is improperly formatted, and many have never commented on or reposted a single article from their industry. You have to show you know market drivers and restraints and are what I call “a player in the game.”

You can join the Zoom meeting anonymously if you like, and I’ll be taking questions via chat only and answering them live on video. Below is the Zoom link, and the password is my last name. So grab a drink 🍺 and join others. This is free and open to everyone so that you can invite others. If attendees find it useful, I’ll do the Zoom regularly.

Zoom link: https://bit.ly/47vsffQ – Password: my last name

With all the OTT price increases in 2023 and the recent launch of new AVOD tiers, the ARPU (Average Revenue Per User) metric is becoming one of the most critical data points that OTT services and Wall Street are closely tracking. The number of net new subscribers added each quarter is still an important metric, but OTT services can have fewer subs and more revenue as long as they increase how much money they are getting from subscribers each month. More importantly, with many streaming services projecting to reach profitability this year, a higher ARPU can help them achieve that faster, even with fewer subs.

Comparing ARPU data from previous years to today is difficult since streaming services have raised pricing more frequently than before, and many have also rolled out services internationally with different pricing and, in some cases, bundles that offer promotional pricing. In addition, streaming services make less per wholesale subscriber; for instance, what Verizon pays Netflix per subscriber in the Verizon bundle, and higher or lower advertising revenue can also skew the numbers, either way, each quarter. Services that offer a discount when you pay for a year in advance would also see their ARPU numbers skewed based on how many users sign up for the 12-month plan.

Some are unaware that streaming services get paid less monthly for wholesale subscribers. Still, Disney, for instance, includes this language in their financials, saying, “Wholesale arrangements have a lower average monthly revenue per paid subscriber than subscribers that we acquire directly or through third-party platforms.”

Adding to the complexity are new advertising-supported plans that can initially lower ARPU but have the potential to make up the difference, or even more revenue, over time. Almost no OTT service breaks out their advertising revenue from their overall SVOD ARPU, with Fubo being the lone exception.

The chart includes a breakdown of ARPU for streaming services based on publicly available data from earnings, interviews, and SEC filings. All numbers are from calendar Q3 2023 or the last time ARPU was given out, which is noted. The growth or decline number excludes the year-over-year effect of foreign exchange rate movements. Just as Netflix reports it, the numbers assume foreign exchange rates remained constant with foreign exchange rates from each prior-year period’s corresponding months.

These streaming services were left off the chart due to their previous ARPU data being old:

• iQiyi: China ARPU, $2.17, SVOD and AVOD combined (Up 12%)
• Eros Now: India ARPU, Premium subscriber, SVOD and AVOD combined, “in the range of $1.20 to $1.30”, per regulatory filing (Last reported Q4 2022)
• Lionsgate Play: India ARPU, $0.50, SVOD and AVOD combined (Last reported Dec 2022)
• Starz: Domestic ARPU, “around $6”, SVOD (Last reported Q3 2022)

No ARPU data has been released for services including AMC+, Acorn TV, Amazon Prime Video, Apple TV+, CuriosityStream, DAZN, Epix, Freevee, MotorTrend TV, NFL+, Sling TV, Tubi, YouTube TV, Tubi, Pluto TV, BritBox, and many others.

Podcast episode 79 is live. This week, I reviewed Peacock’s exclusive NFL game stream with some users having a poor quality video experience and detailed why I think Peacock’s strategy failed with their ad-free fourth quarter. I also break down the viewership numbers reported by NBC Sports and highlight how sports is a costly and unproven part of Peacock’s subscriber acquisition strategy, with no ability to scale sports content globally.

I discuss, with numbers, why the rumors of Warner Bros. Discovery buying Paramount would not make sense from a financial standpoint since the deal would likely be a stock-for-stock deal, with the combined companies having about $60 billion in debt. I also detail how, from a regulatory standpoint, it would involve merging two of the five remaining major movie studios and two major television studios, creating a very high concentration of linear network ownership, including a significant consolidation of major sports rights.

Finally, I highlight what changes I would like to see in the streaming media industry in 2024, including better innovation in the pricing and packaging of streaming content and more professionalism from those within the industry.

Numbers matter, especially financials. Some in the media are reporting that Paramount doesn’t have enough cash and will go bankrupt next year, neglecting to mention the cash Paramount will get from the Simon & Schuster sale and Paramount’s revolving line of credit. Could Paramount’s balance sheet be a lot better? Absolutely. They have a total of $15 billion of net debt. But they are not on the “verge” of going bankrupt. These are the facts:

• Paramount had $1.8 billion of cash as of September 30
• For the period ending Sept. 30, Paramount reported a profit of $295 million, up from $231 million, a year earlier
• Paramount generated $377 million in free cash flow during the third quarter and anticipates strong free cash flow in the fourth quarter as the strike continues to limit the production of content
• In Q4 the company will receive $3 billion (on a pro forma basis) from the sale of Simon & Schuster and expects the transaction to yield approximately $1.3 billion in net proceeds
• Paramount’s CFO said he expects the combination of integrating Showtime into Parammount+ to exceed the previously forecasted $700 million of future expense savings
• The company is expected to see the full ARPU benefit of the recent price increase in the fourth quarter
• During the first quarter of 2023, the company amended and extended its $3.5 billion revolving credit facility, which now matures in January 2027
• In 2024, the company faces a ~$555M debt maturity (total of $15 billion of net debt)

S&P Global analyst Naveen Sarma said Paramount doesn’t have “the cash on the balance sheet to be able to make that payment,” about the $2 billion that Paramount owes the NFL for media rights in 2024. They will have the cash in 2024 when needed and the payment for the NFL is spaced out over multiple payments during the year, it is not one lump sum. There are rumors that the company has discussed laying off more than 1,000 workers early next year, which would also save the company additional money.

It’s safe to say that Paramount will get sold. That’s going to happen at some point. Maybe not all to one buyer and it would make sense for the assets to be broken up. Paramount won’t be a stand-alone company in the next few years. But if you are a buyer there is no reason to buy it now and there is no urgency for the buyer. Any sale would face a long regulatory review unless Paramount’s financials truly get distressed at which point the regulatory rules are relaxed and a deal could go through faster. To suggest the company will go bankrupt next year is to ignore the numbers and facts around their financials.

There are some interesting things taking place with their bonds which have seen higher prices and strong volume in recent weeks, amid reports that Chairwoman Shari Redstone is in talks on selling a controlling stake in the company. Holders of the bonds could make out well if there’s a change of control and the credit is downgraded, thanks to a special provision in their terms.

It’s incredible to think it’s been ten years since Netflix and Comcast signed their interconnect deal, which is due to expire in 2024. This took place at the height of net neutrality and only a year after the deal, the FCC announced the net neutrality order in an effort to prevent the blocking or prioritization of any internet traffic. But just two years later, the FCC voted to do away with the previous order.

Fast forward ten years and the media and telco industries have changed dramatically. Netflix and Comcast’s businesses have both seen seismic changes with Netflix estimating at least $6.5 billion in free cash flow this year, growing to nearly 250 million global subscribers (247.2 million) and having invested over $1 billion in their Open Connect program.

Comcast now owns NBUC (full ownership happened a year before their deal with Netflix), owns and operates Peacock, has sold their 33% stake in Hulu to Disney, and is aggressively building out its 5G network for its Xfinity Mobile service. Their Xfinity X1 platform became a successful aggregation point for a lot of streaming apps even as, like all pay TV providers, Comcast has seen millions of consumers cut the cord.

Since the original deal, the companies expanded their relationship with Netflix launching on Comcast’s X1 platform in 2016, and in 2018, Comcast included a Netflix subscription for new and existing Xfinity packages. Working together, Comcast and Netflix have done a great job of delivering video to consumers and have a great working relationship.

The companies are currently in discussions about a new deal and I expect both sides to be able to come to an agreement without any public spat. The companies work well with one another and they have a very clear understanding of how to deliver a great quality Netflix experience over Comcast’s last mile. I do think some network changes could happen at Comcast internally, especially tied to CTS, but that would simply be about Comcast’s internal network strategy which is always evolving.

I don’t expect any public drama when it comes to a new agreement between the two companies and I would expect a new deal to be done without much fanfare, as it should be.