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USA’s Sunisa Lee (gold) celebrate son the podium during the medal ceremony of the artistic gymnastics women’s all-around final during the Tokyo 2020 Olympic Games at the Ariake Gymnastics Centre in Tokyo on July 29, 2021.
Lionel Bionaventure | AFP | Getty Images

If last year’s biggest corporate media challenge was launching subscription streaming services, this year’s unifying dilemma is figuring out what to put on them.

The tension between how to balance streaming video, theatrical release and linear TV is leading to some peculiar choices bound to confuse consumers in what’s becoming an increasingly jumbled landscape.

“The challenge all of these companies are battling — the central question — is what content goes where, who decides, and why?” said Rich Greenfield, a media analyst at LightShed Partners.

The programming decisions may alter how the public views streaming video. So far, most media companies have marketed streaming video as a complement to traditional pay television. This is why so many of the products are named with the suffix “plus” — Disney+, ViacomCBS‘s Paramount+, Discovery+, etc.

In the long run, it’s possible each streaming platform will become the home for all of a media company’s programming. The “plusses” will essentially be lopped off. ESPN+ may just be ESPN, with everything ESPN has to offer.

But the world isn’t there yet. And the results are increasingly confusing for consumers as new programming is made specifically for streaming services, and the best of linear TV still doesn’t show up on streaming.

The streaming labyrinth

For scripted television series, media executives have largely made the decision that streaming services will be the home for the highest quality original programming. Disney, AT&T‘s WarnerMedia, Comcast‘s NBCUniversal and ViacomCBS are all attempting to convince Wall Street they can grow beyond traditional cable television. They’re using new hit shows, including “The Mandalorian,” “Mare of Easttown,” and “Yellowstone,” as bait to entice subscribers. The results have varied from service to service, but all of the major new streaming services are growing by millions of customers each quarter.

For movies, there’s disagreement at a film-by-film level across the different services. Disney put Pixar movies “Soul” and “Luca” directly on its Disney+ service for no additional charge upon release. For “Jungle Cruise,” “Black Widow” and “Raya and the Last Dragon,” the company decided to make users spend an additional $30 to stream the movies before eventually making them free with a subscription. NBCUniversal placed “The Boss Baby: Family Business” on its paid tier of “Peacock” but only released “F9” in theaters. WarnerMedia decided to place its entire slate of 2021 films directly on HBO Max but won’t do that for blockbuster movies in 2022.

For news and sports, most media companies have kept their most valuable programming exclusively on traditional cable TV. The most-watched primetime programming on CNN, MSNBC and ESPN is still locked inside the cable bundle. This has allowed executives to push against the steady but not yet overwhelming surge of pay-TV cancellations, keeping alive a highly profitable business that brings in billions of dollars each year.

Choice overload

NBCUniversal is navigating the challenge of distributing valuable programming as it broadcasts the Olympic Games. Executives can choose to air live and pre-recorded events on NBC’s broadcast channel, NBC’s cable networks, NBC’s authenticated apps for cable subscribers, NBC’s free apps, Peacock’s free tier and Peacock’s paid tier.

The variety of choices has led to a complicated ecosystem because NBCUniversal is attempting to achieve several goals at once. The company wants to push Peacock subscriptions, appease pay-TV distributors who have agreed to many years of fee increases because they were receiving unique content, and maintain expensive TV advertising rates by attaching commercials to exclusive live programming.

“It’s the innovator’s dilemma in action,” said one veteran broadcast television executive. “You know the linear TV world is collapsing, but you’re trying to stay on the Titanic for as long as possible. At the same time, you’re setting up the lifeboats, which are digital and streaming.”

Making the numbers work

Disney is staring down a major streaming dilemma as soon as next year with “Monday Night Football.” The company secured rights to stream the perennially most-watched cable series on ESPN+ in its new TV rights deal with the National Football League in March. But Disney and ESPN haven’t said anything about when it will actually include “Monday Night Football” on ESPN+.

ESPN is by far the most expensive network on cable TV. It gained that distinction by being the only way Americans can watch “Monday Night Football” and other popular sporting events. If Disney starts moving previously exclusive programming from ESPN to ESPN+, pay-TV distributors will push back on future rate increases and millions of consumers will be given another reason to cancel cable TV.

The math makes this calculus tricky. Beginning Aug. 13, Disney will charge $6.99 per month for ESPN+ after a recent price increase. But Disney makes more than $9 per month per cable subscriber for ESPN, according to Kagan, the media research division at S&P Global, in pay-TV distribution fees. When bundled with the other ESPN networks, Disney Channel and ABC, Disney makes more than $16 per month.

In other words, for every customer canceling cable, Disney loses more than $16 per month. It will need to start charging more for its streaming products to break even  and that’s not even counting the loss in advertising associated with its linear programming, which dwarfs streaming video advertising revenue.

“Nobody is ready to unplug the linear ecosystem, because it brings in so much cash,” Greenfield said. “So they’re all balancing how to manage legacy assets with future investments that are free cash flow negative to show Wall Street that they’re trying. They’re all walking the tight rope.”

News programming decisions

NBCUniversal and WarnerMedia announced this month they’ll hire hundreds of new employees to beef up their streaming news services.

Instead of simply duplicating MSNBC, CNBC and CNN programming on “Peacock” and “HBO Max,” the media companies are taking a different strategy. CNN is building a subscription news service, CNN+. CNN chief digital officer Andrew Morse said he plans to hire 450 people to develop and market new series and newscasts. NBCUniversal News Group Chairman Cesar Conde announced plans to hire nearly 200 new employees across its news brands, the majority of which will support NBC News Now, the company’s flagship streaming network.

The decision to create separate programming for streaming — some of which may duplicate the content of what’s already being broadcast on linear TV — can be viewed in several different ways.

Skeptically, it could be seen as a waste of resources, filled with redundancies, as a “moment in time” decision to keep exclusivity in the cable bundle that may no longer exist in two or three years.

But NBC News executives say the investment acknowledges streaming audiences aren’t the same as linear viewers. That should lead to programming decisions that acknowledge digital viewers tend to be younger and more diverse.

“We’re always thinking about ways to optimize our journalism for each distribution platform,” said Noah Oppenheim, president of NBC News. ”How do we engage these new audiences? Sometimes the answers lead to different faces on screen, different approaches to storytelling, a different lens on the world.”

It’s unclear if there’s actually an audience for an all-streaming news network — especially one that demands consumers pay a monthly subscription fee, such as CNN+, which debuts in 2022. The notion of programming to a younger audience is suspect, as a video news broadcast, whether streaming or on traditional TV, may simply not appeal to those under 25. The decision to invest more in streaming news could lead to a gradual decline in investing in broadcast or cable productions if total revenue is shrinking.

NBC News Chief Digital Officer Chris Berend said he’s confident further investment in NBC News Now will pay off because he can already see the growth in time spent on the existing product, which launched in 2019. NBC News Now is free for consumers, backed by advertising.

“We are incredibly excited about the millions of hours audiences spend with NBC News NOW and how that continues to grow as we continue to invest,” said Berend. “That time spent, which includes more than an hour per visit on some platforms [like YouTube], is a clear indicator we are satisfying our audience across many platforms, each with their own demographic nuances.”

Disclosure: NBCUniversal is the parent company of CNBC.

WATCH: Comcast CEO Brian Roberts on earnings and streaming business

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Reddit shares plunge almost 25% in two days, finish the week below first day close

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Reddit shares plunge almost 25% in two days, finish the week below first day close

The trading floor of the New York Stock Exchange prepares for the social media platform Reddit’s initial public offering in New York City on March 21, 2024.

Spencer Platt | Getty Images

Reddit shares are plummeting after experiencing a rally stemming from the social media company’s IPO last week.

Shares closed at $49.32, ending the week below their closing price on Reddit’s first day of trading on the New York Stock Exchange. They closed at $50.44 last Thursday. Stock markets are closed on Good Friday.

Reddit shares began their downward spiral on Wednesday, when they sank about 11% to $57.75 at market close. That day, Hedgeye Risk Management described Reddit’s stock as “grossly overvalued” in a report cited by Bloomberg News, adding the company was on the firm’s “short bench.”

Earlier this week, Reddit disclosed in a corporate filing that CEO Steve Huffman sold 500,000 shares. Ben Silverman, vice president of research at Verity, told CNBC the move was expected and represents just “a portion of his holdings.”

Meanwhile, Reddit Chief Operating Officer Jennifer Wong disclosed that she sold 514,000 shares and now holds 1.4 million of the company’s shares.

“There’s always a bit of a disconnect, because the purpose of bringing the company public is twofold,” Silverman said. “It’s not just to generate liquidity for the company itself so that it can expand and grow. In these situations, it often allows insiders to cash out to generate liquidity, and that’s something executives have to consider here.”

“If the prospects are so bright, why are insiders selling?” Silverman added.

Reddit shares started off the week on a high note and soared 30% on Monday. The company’s shares then rose 8.8% on Tuesday to close at $65.11, even after New Street Research issued a neutral rating on the company.

The New Street Research analysts wrote in a note that they wouldn’t alter their $54 price target and that they expect “volatility into the first earnings report.”

Don’t miss these stories from CNBC PRO:

Reddit shares slump after CEO Steve Huffman sells 500,000 shares

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Xiaomi releases electric car $4K cheaper than Tesla’s Model 3 as price wars heat up

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Xiaomi releases electric car K cheaper than Tesla's Model 3 as price wars heat up

Chinese consumer electronics company Xiaomi revealed Thurs., Dec. 28, 2023, its long-awaited electric car, but declined to share its price or specific release date.

CNBC | Evelyn Cheng

BEIJING — Chinese smartphone company Xiaomi said Thursday it will sell its first car for far less than Tesla’s Model 3, as price wars heat up in China’s fiercely competitive electric car market.

Xiaomi CEO Lei Jun said the standard version of the SU7 will sell for 215,900 yuan ($30,408) in the country — a price he acknowledged would mean the company was selling each car at a loss.

Tesla’s Model 3 starts at 245,900 yuan in China.

Lei claimed the standard version of the SU7 beat the Model 3 on more than 90% of its specifications, except on two aspects that he said it might take Xiaomi at least three to five years to catch up with Tesla on. He also said the SU7 had a minimum driving range of 700 kilometers (nearly 435 miles) versus the Model 3’s 606 kilometers. The company said orders had exceeded 50,000 cars in the 27 minutes since sales started at 10 p.m. Beijing time Thursday.

Deliveries are set to start by the end of April, Lei said. Lei also claimed that Xiaomi’s car factory, for which all “key” steps are fully automated, can produce an SU7 every 76 seconds. It was not immediately clear whether the factory was fully operational.

Earlier this week, the Xiaomi CEO said on social media the SU7 would be the best sedan “under 500,000 yuan” ($69,328).

The car is entering a fiercely competitive market in China, where companies are launching a slew of new models and cutting prices in order to survive. Chinese telecommunications giant Huawei has partnered with traditional automakers, most notably launching the Aito brand whose vehicles are often on display in Huawei smartphone showrooms.

Tesla‘s Model 3 is the best-selling new energy sedan in China that has a driving range of at least 600 kilometers (372 miles) and costs less than 500,000 yuan, according to data from industry website Autohome.

Xiaomi targets 20 million premium users for its new electric vehicle, says president

BYD‘s Han sedan starts at 169,800 yuan, according to Autohome.

Nio‘s ET5 starts at 298,000 yuan, while Xpeng‘s P7 starts at 209,900 yuan, the data showed. Geely-owned Zeekr’s 007 sedan starts at 209,900 yuan, according to Autohome.

Sales of new energy vehicles, which include battery-only powered cars, have surged in China to account for about one-third of new passenger cars sold, according to the China Passenger Car Association.

Accessories

The heads of competing electric car startups Nio, Xpeng and Li Auto were among the featured guests at the Xiaomi SU7 launch event.

Lei on Thursday showed off a range of accessories such as an in-car refrigerator, a custom front-window shade, and a smartphone holder, some available for free with a car purchase before the end of April, and others for a separate price.

The SU7 supports Apple’s Car Play and can integrate with the iPad, Lei said. He also revealed driver-assist tech for highways and cities, set to be fully available in China in August.

Tesla’s Autopilot for driver assist on highways is available in China, but the company’s “Full Self Driving” for city streets has yet to be released in the country.

Despite saying Xiaomi wanted to compete with Porsche at a car tech event in December, Lei acknowledged that the SU7 had longer to go before it might be able to compete at this more premium level. He announced that the “Max” version of the SU7, aimed as a competitor with Porsche’s Taycan, would sell for 299,900 yuan.

Ecosystem of devices

The rapid rise of Chinese electric vehicle maker BYD

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FTX founder Sam Bankman-Fried sentenced to 25 years for crypto fraud, pay $11 billion in forfeiture

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FTX founder Sam Bankman-Fried sentenced to 25 years for crypto fraud, pay  billion in forfeiture

FTX founder Sam Bankman-Fried sentenced to 25 years in prison for massive crypto fraud

FTX founder Sam Bankman-Fried was sentenced to 25 years in prison on Thursday for the massive fraud and conspiracy that doomed his cryptocurrency exchange and a related hedge fund, Alameda Research.

The sentence in Manhattan federal court was significantly less than the 40 to 50 years in prison that federal prosecutors wanted for Bankman-Fried. But it was much more than the five to six-and-a-half years suggested by his attorneys.

“There is a risk that this man will be in position to do something very bad in the future,” Judge Lewis Kaplan said before sentencing the 32-year-old and ordering him to pay $11 billion in forfeiture to the U.S. government.

“And it’s not a trivial risk at all,” Kaplan added.

The judge said that in 30 years on the federal bench, he had “never seen a performance” like Bankman-Fried’s trial testimony.

If Bankman-Fried was not “outright lying” during cross-examination by prosecutors, he was “evasive,” Kaplan said.

Jurors at trial likewise did not buy Bankman-Fried’s version of events, convicting him in November of seven criminal counts and holding him responsible for losing about $10 billion in customer money due to the securities fraud conspiracy.

Kaplan on Thursday said the quarter-century prison term has “the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”

Before being sentenced, Bankman-Fried spoke contritely even as he suggested that the billions of dollars customers lost was the result of a “liquidity crisis” or “mismanagement,” not fraud.

Indicted FTX founder Sam Bankman-Fried leaves the U.S. Courthouse in New York City, July 26, 2023.

Amr Alfiky | Reuters

“My useful life is probably over,” he said while wearing a beige jailhouse jumpsuit. “It’s been over for a while now since before my arrest.”

“They built something really beautiful and I threw all of that away,” he said of his co-workers at FTX, a company once valued at $32 billion. “It haunts me every day.”

“A lot of people feel really let down. And they were very let down,” he said. “And
I’m sorry about that. I’m sorry about what happened at every stage.”

“It’s been excruciating to watch this all unfold,” he told Kaplan. “Customers don’t deserve this level of pain.”

“I was the CEO of FTX and I was responsible.”

But even as he took some responsibility, Bankman-Fried suggested that customers eventually would get back the money they placed with his exchange, and blamed a federal bankruptcy court for not making those customers whole yet.

Kaplan appeared to stop paying close attention at that point.

In response, Bankman-Fried crossed his arms and began rapidly tapping his right foot as he continued speaking.

Assistant U.S. Attorney Nicholas Roos, arguing for a prison sentence of up to five decades, scoffed at the picture painted by Bankman-Fried and his lawyers.

FTX’s collapse was not due to “a liquidity crisis or act of mismanagement,” Roos said. “It was the theft” of billions of dollars of customer money around the world, the prosecutor said.

“It was a loss that affected people significantly.”

Manhattan U.S. Attorney Damian Williams, in a statement after the sentencing, said, “Samuel Bankman-Fried orchestrated one of the largest financial frauds in history.”

“His deliberate and ongoing lies demonstrated a brazen disregard for his customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence,” Williams said.

Attorney General Merrick Garland said, “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice. I

Bankman-Fried’s family, in a statement, said, “We are heartbroken and will continue to fight for our son.” Both Joseph Bankman and Barbara Fried, who are Stanford Law professors, were in court for the sentencing.

Barbara Fried and Allan Joseph Bankman, parents of FTX Co-Founder Sam Bankman-Fried, arrive at court in New York, US, on Thursday, March 28, 2024. Sam Bankman-Fried returns to court for sentencing after being convicted of a massive fraud that led to the collapse of his FTX exchange. 

Yuki Iwamura | Bloomberg | Getty Images

Before he sentenced SBF, Kaplan said he rejected “the entirety of defendant’s argument there was no loss” at FTX, calling that claim “misleading, logically flawed and speculative.”

Several victims of Bankman-Fried then talked about the damage to their lives from his crimes.

Bankman-Fried looked at the victims as they talked to the judge.

Bankman-Fried plans to appeal his conviction and sentence.

Three other people, who all testified against Bankman-Fried at trial, are awaiting their own sentencings after pleading guilty to criminal charges related to FTX and Alameda Research.

They are Caroline Ellison, the Alameda CEO who at one time dated Bankman-Fried, FTX engineering chief Nishad Singh and Gary Wang, the co-founder and chief technology officer of FTX.

WATCH: The collapse of FTX: Insiders Tell All

This is developing news. Check back for updates.

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