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Edgecast Valued at $120M (0.5x 2021 Revenue) in Closing Transaction with Limelight Networks

In June, Edgio closed on the acquisition of Edgecast from Yahoo (Apollo Global Management) and it was widely reported that the deal for the company valued Edgecast at close to $300 million, which is incorrect. While the initial value for Edgecast was $185 million, Apollo gave Edgio $30 million in cash as part of the deal. They also gave Edgio a second $35 million cash payment for customary working capital adjustments, in exchange for 8 million shares in Edgio, the newly combined entity consisting of Limelight, Layer0 and Edgecast. One could argue that if you subtract the $65 million in cash Apollo gave Edgio, Edgecast was really valued at $120 million, or less than half of Edgecast’s 2021 revenue of $285 million. Here’s a breakdown on the deal terms.

Yahoo received 72 million shares from Edgio for the acquisition based on a locked in 30-day trailing VWAP (Volume-Weighted Average Price) of $4.12 a share. But the effective price of Limelight shares (Limelight has since changed its ticker symbol and now trades under EGIO) at closing was approximately $2.30, so the net price Edgio paid based on shares issued and their market value was approximately $165 million.

As happens in every M&A situation, there are customary working capital adjustments at close, which amounted to approximately $35 million. In essence Edgecast was coming over with about $35 million more of assets. So Apollo, who was bullish on Edgio’s new strategy, decided to take 8 million shares in exchange for the assets. Apollo only got 8 million shares for that investment because it was based on the deal locked in VWAP price of $4.12. So in effect, Edgio issued another 8 million shares to Apollo in return for $35 million more of cash at closing indexed to Edgio’s locked-in VWAP price of $4.12. A 68% premium to the current price.

Yahoo (Apollo) can also receive up to an additional 12.7 million shares of Edgio, representing up to $100 million of additional deal consideration, over the period ending on the third anniversary of the closing of the transaction, subject to the achievement of share-price targets. Edgio stockholders now own approximately 65% of the combined company, while Yahoo will own approximately 35% respectively.

The final outcome of the deal is that Limelight more than doubled their revenue for $185 million and also got an additional $65 million of cash to go with it. So arguably Limelight’s final net price for Edgecast was approximately $120 million for the transaction. This is by far the best deal we have ever seen negotiated by a CDN vendor in acquiring a rival CDN, where the company wasn’t going under.

Note: I have never bought, sold or traded stock in any company that offers content delivery services – ever. Even in my managed accounts, no CDN vendor is included. I do not make money in any way, based on the share price of any CDN vendor.

Episode 27: Netflix Q2 Earnings Recap: Sub Counts; Balance Sheet; Ad-Supported Tier Opportunity

Podcast Episode 27 is live! This week we discuss the key takeaways from Netflix’s Q2 earnings report including subscriber losses for two-quarters in a row, what Netflix expects for growth going forward and the current state of Netflix’s balance sheet. We also detail what we’ve learned about their plans to offer an ad-supported tier and why we believe this is a real opportunity for Netflix, rather than a challenge as some are suggesting. Thanks to this week’s podcast sponsor, Agora.

Netflix Isn’t “Desperate For Cash”, These Are Their Financial Numbers You Need To Know

Some are saying that when it comes to Netflix’s finances they are “bleeding cash”, “desperate for cash”, or their finances are in trouble. This is not true. Numbers don’t lie. Here’s a breakdown of Netflix’s finances.

At the end of March, Netflix had $6 billion in cash. Their total debt stood at $14.6 billion and they paid $188 million in interest during the first quarter, which annualizes to $752 million. They have plenty of cash to pay their interest. Netflix expects to remain free cash flow (FCF) positive and has guided to 19-20% operating margins for the year. In Q1, net income was $1.6 billion, down 6.4% from the year-ago quarter. Revenue for the quarter grew 9.8% year over year to $7.9 billion. Netflix’s ARPU in Q4 2021 in the US/Canada was $14.78 and grew $0.13 to $14.92 at the end of Q2.

Net cash generated by operating activities in Q1 was $923 million vs. $777 million in the prior year period. Free cash flow amounted to $802 million vs. $692 million. Revenue from the United States and Canada grew 5.6%. Revenue from Netflix’s Europe, Middle East, and Africa region grew 9.3%. Latin America revenue rose 19.4%. Revenue from the Asia-Pacific region increased 20.3%. (all year-over-year)

Starting in 2025, Netflix will have nearly $7 billion in debt mature within a three-year span and one could argue that as Netflix replaces its bonds with new debt as they mature, the company “might” pay higher rates. But that’s not a problem today.

These are the numbers. They are definitive. There should be no debate or argument over what Netflix’s current financial resources are.

Episode 26: Previewing Netflix’s Earnings; Why Disney Passed on IPL Cricket Rights

Podcast Episode 26 is live! This week we breakdown a preview of what to look for in Netflix’s Q2 2021 earnings including subscriber losses/gains, ARPU and an expected update on their advertising strategy. We also discuss what the impact of Stranger Things Season 4 might be on churn and retention being Netflix split the release of the series across two financial quarters. We also detail the IPL Media streaming rights (2023-2027) auction won by Viacom18 and why Disney said they didn’t compete on the rights, at the priced needed to win the auction, based on the content not offering enough long-term value to their Disney+ Hotstar service. Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Netflix, Disney, Viacom18, Disney+ Hotstar, Amazon Fire TV.

The Seriousness of Device Fragmentation and How It Impacts Streaming Services

Device fragmentation has become an escalating challenge for streaming services, as launching, managing, and ensuring QoE for viewers across growing devices eventually becomes overwhelming. From multiple operating systems and platforms to the constant software updates, offering a consistent experience on all devices places a heavy burden on development teams, requiring a broad, yet specialized skill set.

It also affects every company’s bottom line as supporting more devices will ultimately expand their addressable viewer base, especially for FAST services where it will increase the number of possible ad views. Generally, audience reach is the first piece analyzed when evaluating devices but technical challenges also need to be considered, particularly the challenge of testing playback on each and every device viewers use.

With more video options than ever, viewers are demanding the highest QoE, particularly one that will give them continuity in playback when transitioning from device to device. Streaming services tell me that putting the systems in place to test and provide and maintain that level of service can become a very costly, time-consuming, and formidable challenge.

The number of devices in the market that streaming services have to support is pretty deep, especially when you account for both new models and older hardware still in use. The competitiveness between device manufacturers is fueling this increase as they need to consistently upgrade or introduce new products for users to adopt, which can result in a new or updated OS, wifi technology, and even codebases that need to be supported. With many streaming services now being offered globally, and no industry standardization across them like we see with STBs, the difficult decisions and work to support and/or add new devices into existing offerings falls on the streaming services themselves.

A great example of the difficulties streaming services face when wanting to add new devices is how each manufacturer is pushing out a different operating system which can be seen in smart TVs, such as Samsung Tizen OS, LG webOS and Vizio SmartCast. This is good for device manufactures when it comes to how they position themselves with consumers, but for streaming services, it means they need to consider the differences when trying to offer a consistent video experience across platforms. Having their own OS has become a source of revenue (See Vizio’s Q2 Earnings), meaning this trend will continue, and new and existing vendors will look to develop their own. From browsers, phones, and TV suppliers to USB devices and gaming consoles, it seems like there is no end to the ever-expanding device growth, which has become the norm.

A great example of streaming device fragmentation can be seen in Bitmovin’s video developer report from 2021, which surveys developers across the industry. It shows how leading streaming services are now supporting at least 24 devices across 12 different platforms and will be looking to support additional ones with their offerings.

When streaming services and their development teams decide which devices they want to support playback on, player testing processes will need to be defined via either manual testing or automated testing. Just like everything, there are pros and cons to both approaches. There is a high cost in terms of having to find and maintain the supported devices, especially with manual testing as it requires the in-house or external dev team to build out a testing regimen that they must physically do and observe with every release. Automated testing comes at a high expense as well, as it’s built either from scratch in-house or is a SaaS barebones solution that dev teams will have to implement use cases into. In the long term, this option tends to become more cost-effective and stable as video services don’t constantly have to have their teams dedicated to doing manual work.

The timeline to implement testing structures is extremely relevant as different factors go into it such as procurement and maintenance of devices and the development of player use cases that could differ depending on the model of the device supported. For example, LG TVs from 2016 aren’t able to be tested with all of the same use cases as later models such as period switches during playback, where the encrypted video is changed to an unencrypted client-side ad and then back to the encrypted stream. Use cases are also not one and the same as they depend on the experience streaming services are trying to provide, whether it be testing for video qualities or ad transitions. Going back to device procurement, as viewers don’t change devices often and for smart TVs that could be over 5 years, obtaining older models is another process that can limit your team’s ability to guarantee consistent quality playback from device to device.

Choices are already being made as to which platforms and versions of devices to officially support by every streaming service. Unless someone discovers an endless supply of video-centric developers (wishful thinking of many out there), it could become too costly and unmanageable for some streaming services to maintain their same QoE on every platform and they’ll need to seek other solutions that offer effective ways to combat this issue. This is the very reason why Bitmovin recently released Stream Lab, a cloud based platform that enables development teams to easily test their streams in real environments on physical devices and receive transparent reporting with clear performance feedback. With the complexity of testing across so many devices and platforms, I suspect we will continue to see more third-party solutions streaming services can rely on.

Episode 25: Deltatre To Get Acquired; Pixelot Raises $161M; Free Peacock for Comcast Subs Will Expire; Latest Sports Viewership Numbers

Podcast Episode 25 is live! This week we breakdown some financial news including the proposed sale of Deltatre, which is expected to generate $180 million of revenue in 2022 and Pixelot’s raise of $161 million in funding. We also discuss Limelight’s final sale price for Edgecast, which ended up valuing the company at $135 million. Mark and I also breakdown Netflix’s confirmation that it is not buying Roku, details on how the Apple and MLS deal will work for viewers, and we highlight what NBCUniversal’s CEO said about Peacock no longer being free for Comcast customers in the future. Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Netflix, Roku, Peacock, Deltatre, Endeavor Streaming, Firstlight Media, Edgio, Pixelot, Apple, MLS, Bally Sports Plus, NBC Sports, ESPN+, Amazon Fire TV, YouTube TV, Sling TV, Adobe.

Episode 24: Cable TV Seeing Record Sports Viewership; VC Investors Pulling Back on Funding

Podcast Episode 24 is live! On this episode, we discuss how sports events (NBA, NHL, Indy 500, PGA, Premiere League) are seeing record viewership on cable TV, with sports leagues and broadcasters making no mention of streaming viewership. We also discuss the new NESN 360 sports streaming service and the impact of Disney potentially losing the IPL (Indian Premiere League), which would impact Disney+ Hotstar’s growth. We also talk about funding problems some streaming vendors are having, with the larger impact in the financial markets making it difficult to secure capital. Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Disney+, Netflix, NESN 360, Netflix, Roku, NBA, NHL, Indy 500, PGA, Premiere League, Apple TV+,  Melvin Capital, Tiger Global Management.

Episode 23: The Latest ARPU Numbers From Streaming Services; Setting Proper Growth Expectations in the Market

Podcast Episode 23 is live! With more streaming services adding AVOD plans, this week we breakdown ARPU amongst streaming services, which now have to be properly compared between SVOD, AVOD and a combo of the two. We also highlight new information given out by Disney and Netflix around their ad-supported plans, Telestream’s acquisition of Encoding.com, the new NFL+ service and Paramount’s thoughts on the windowing of movies. We also detail some of the problems companies are facing, across all sectors, when it comes to setting proper growth expectations on Wall Street and why some companies are being forced to cut costs and lay people off, or slow hiring. Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Disney+, ESPN+, Hulu, NFL+, Netflix, Roku, HBO Max, Vizio, Paramount, Peacock TV, fuboTV, Spotify, Pluto TV, Telestream, Akamai, Encoding.com, FIFA, Snap, Edgecast, Limelight Networks, Melvin Capital.

A List of The Latest ARPU (Average Revenue Per User) Numbers from Streaming Services

With more streaming services adding AVOD plans, here’s a comparison of ARPU amongst streaming services, which now have to be properly compared between SVOD, AVOD and a combo of the two.

  • Disney+ global ARPU was $4.30 in Q1, Domestic was $6.32 (subscription)
  • ESPN+ ARPU was $4.73 in Q1 (subscription and advertising)
  • Hulu SVOD ARPU was $12.77 in Q1 (subscription and advertising)
  • Netflix global ARPU was $14.91 in Q1 (subscription)
  • HBO Max domestic ARPU was $11.24 in A1 (subscription and advertising)
  • Paramount domestic ARPU of “around $9” in Q1 (subscription and advertising)
  • Peacock TV ARPU was “around $10”, in Q4 2021, no Q1 2022 number given (subscription and advertising)
  • Roku ARPU was $42.91 in Q1 (trailing 12 months), which is $3.57 a month (advertising)
  • fuboTV “Advertising ARPU” was $7.11 in Q1 (their long-term target for Ad ARPU is $15-$20)
  • Vizio ARPU was $23.68 in Q1 (trailing 12-months), which is $1.97 a month (advertising)
  • Starz domestic ARPU was “around $5.70 to $6”, in May 2021 and Lions Gate hasn’t updated it since then (subscription)
  • Discovery’s overall D2C ARPU was “around $7”, with Discovery+ ARPU of “more than $10”. These numbers are from July 2021 and Discovery hasn’t broken out ARPU since them. (subscription and advertising)
  • Pluto TV global ARPU was $1.64, Domestic ARPU was $2.54, at the end of 2021 (advertising)

Many streaming services like AMC+, CuriosityStream, Amazon Prime Video, Apple TV+, DAZN, YouTube TV and many others have provided no details on ARPU to date, or in the past few years.

Episode 22: The Latest Engagement Data and Earnings Recap from Disney, Fubo and DISH

Podcast Episode 22 is live! This week we breakdown Q1 2022 calendar earnings from Disney, fuboTV and DISH including subscriber gains/losses, ARPU and revenue growth rate. We also detail some engagement numbers highlighting what engagement looks like across gaming (Roblox, Activision Blizzard), trading (Robinhood, Coinbase), social (Facebook) and other platforms showing how consumer’s behaviors have changed since the pandemic. Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Netflix, Disney, fuboTV, DISH, Sling TV, AMC, Hulu, EPSN+, Hotstar, YouTube TV, Vizio, Facebook, Roblox, Peloton, Carvana, Coinbase, Activision Blizzard, Robinhood, Charter, Call Of Duty.

NAB Show Streaming Summit Videos Now Available for Viewing

All of the conferences sessions and presentations from the NAB Show Streaming Summit are now online for viewing at: https://nabstreamingsummit.com/videos/2022vegas/

Thanks to Mobeon Media for doing all the AV capture at the event and to Kaltura for hosting all the videos. #nabshow #streamingmedia #streamingsummit

The next NAB Show Streaming Summit will take place in NYC, October 19-20 at the Javits Convention Center. Full details and the call for speakers will be announced at the end of May.

Episode 21: Earnings Recap; Paramount, Roku, Comcast, Akamai, Limelight, Google, Amazon, Brightcove, Fastly, Vimeo, Charter, Verizon

Podcast Episode 21 is live! This week we breakdown the key numbers you need to know from Q1 earnings reports including updated subscriber and ARPU numbers from Paramount+, Roku, Peacock TV and cord cutting numbers from Charter, Comcast and Verizon. We also detail the revenue growth rate, GAAP net loss/gain from cloud vendors and streaming vendors including Akamai, Alphabet, Brightcove, Fastly, Limelight, Microsoft, Vimeo. Come up to speed on important Q1 earnings you should know about, all in 30-minutes.Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Comcast, Peacock TV, Paramount+, Roku, Amazon, Fastly, Limelight, Akamai, Brightcove, WicketLabs, Microsoft, Amazon Prime Video, NFL, Alphabet, YouTube TV, Vimeo, Charter, Verizon.

Podcast Episode 20: NAB Show Special, Thoughts and News From The Event

Podcast Episode 20 is live! This week we discuss some of the news from the NAB Show, detail some of the products and services we saw on the exhibit floor and talk about the hottest topics discussed at the Streaming Summit. We also detail attendee numbers, some of the NAB’s plans for the new show in NYC in October, how engineering teams are building out video applications and what the future of the media business looks like. Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Meta, Agora, FOX Sports, LaLiga, Hulu, Sling TV, Netflix, HBO Max, Eluvio, Livepeer, Brightcove, Mux.

Google Launches Media CDN Offering for VOD and Downloads

Google has announced a new commercial CDN offering called “Media CDN”, as part of their Google Cloud platform. You can listen to this special podcast I did with David Reisfeld from Google for more details on the service. At launch, the new CDN offering will support on-demand video and large object downloads with Google planning to add support for live streaming later in the year. Google is targeting customers with at least 10PB a month of delivery or multiple Tbps of delivery. Google tells me they plan to be aggressive on price, but isn’t trying to be a low-cost leader in the market. Google’s goal with their CDN offering isn’t to compete on commodity CDN business but rather sell Media CDN as part of a much larger contract that includes many cloud-based services.

Google’s Media CDN platform will leverage some components of the YouTube CDN platform and Google built out a new control and data plane to let customers have control of the Media CDN platform, since YouTube has always been a private platform just for YouTube content. The new service is all API driven and you can listen to the podcast to learn more about Google’s product road map, what media services they plan to add through a partner ecosystem, how Media CDN ties into their compute platform and how Google plans to measure QoE of their new Media CDN offering.

Podcast Episode 18: Detailing The Challenges and Opportunities in Roku’s Business

Podcast Episode 18 is live! This week we breakdown Roku’s business model discussing their challenges but also the large opportunity they have in the market when it comes to the strength of their advertising platform. We also discuss Roku’s ARPU, international growth and the success they have seen in their OS platform for TV manufacturers. We also highlight some AVOD news in the market and discuss Netflix adding an ad supported tier (before Netflix earnings came out). Thanks to this week’s podcast sponsor, Agora. 

Companies, and services mentioned: Roku, HBO Max, Hulu, Netflix, Apple, Facebook.

Detailing Salesforce’s Churn, Retention and Engagement Platform for Video

In a recent survey by Salesforce, 66% of customers expect brands to understand their unique needs and expectations, yet in reality, they found that only 34% of companies generally treat their customers as unique individuals. To close this gap, media companies are racing to create personalized experiences for their customers, especially when it comes to streaming video services. Personalization has become so ubiquitous that most customers now expect nothing less from all of their interactions.

Given the breadth of video choices and the competition for attention in today’s market, when customers don’t feel their expectations are being met it’s easier than ever to switch. On average, 80% of customers say the experience a company provides is as important as its products and services. The “Amazon effect” of simple, fast and predictive has set a high bar for all industries.

For many media companies, customer expectations are a moving target and it can be difficult for them to figure out the right combination of content, bundling, pricing and what a good user experience looks like. Even more difficult is how companies are collecting and measuring user engagement, churn and retention to grow their service. A topic I have covered in detail on one of my recent podcasts.

Delivering personalized subscriber experiences across every stage of the journey is not easy, and streaming services require a comprehensive platform to manage the complexities. Media companies face daunting challenges across the entire subscriber lifecycle — leading to decrease in revenues and operational efficiencies, and higher costs if not addressed. Here are some of those business challenges across the attract, acquire, service, engage and retention phases:

  • In the attract stage, companies struggle with launching new products, promotions, bundles and add ons and making changes to their pricing. For some companies, it takes months to create and launch a new package, and requires their developers to touch code every time they want to make a price change.
  • In the acquire stage, there are complex onboarding journeys, often saddled with too many steps to sign up as well as inconsistent experiences across devices.
  • In the service phase, with data spread across the organization, agents are toggling through multiple systems, leading to no 360 view of the subscriber, longer call times and sub-standard customer care.
  • In the engage phase, companies find difficulty in personalizing offers and recommendations. How many times do we all spend browsing through content, not knowing what we want to watch? Or seen an ad on social media that has zero relevance to us?
  • In retention, with no visibility into real-time customer data and behavior, companies are unable to create any lasting and relevant loyalty programs for their customers.

To aggravate the already challenging tasks, the foundational challenges are imminent. Most companies are saddled with a complex software infrastructure which means data is likely siloed all over the organization. This makes it nearly impossible to create a single view of the subscriber, which makes servicing them an even more difficult task. All these challenges lead to significant revenue leakage and margin erosion, which is why none of the OTT services will disclose their churn numbers. Companies are leaving money on the table and are not operating as efficiently as they should.

I’ve spent the last few months looking at Salesforce’s solution to manage the subscriber lifecycle which includes attraction, onboarding, service, engagement and retention. Their goal is to help publishers drive the growth of subscriber revenues, deliver personalized and omni-channel subscriber care, and maximize retention, as defined by the service. At the heart of this solution is Salesforce Media Cloud’s Grow Subscriber Relationships application, complemented by Marketing Cloud, Einstein, Tableau Analytics, and Sales Cloud and Service Cloud.

Many of the OTT services I regularly speak with struggle with the ability to quickly launch new promotions, bundles, add ons, and making pricing changes. Some of them have told me it can take months just to roll out a pricing change. Streaming services need a centralized and flexible product catalog and media-specific CPQ (configure, price, quote) that supports attribute-based pricing and highly complex business rules. This allows them to display the most relevant subscription packages, products, bundles and promotions and rapidly launch new packages, and make pricing changes, all with clicks not code. Setup properly, companies can accelerate their time to market and streamline the complex and cumbersome process of product launches and pricing changes. This is one of the areas where I see Salesforce winning deals in the market, signing up OTT services to use their platform for their retention, churn and engagement needs.

With subscriber data spread and siloed across the organization, support personnel at OTT services find themselves toggling through multiple systems, leading to longer call times and sub-standard customer care. I’ve witnessed this first hand, like many others have, when calling into support and being asked for information they should already know about how you use the platform. OTT services need to have a single source of subscriber truth by integrating disparate data, allowing for streamlined, personalized proactive subscriber care and case management. They also need to support guided flows for both full and self-service channels, leveraging these tools to deflect calls and allow subscribers to rapidly make account changes on their own. This is something many OTT services don’t allow outside of cancelling their service or changing billing information.

Salesforce also takes an interesting approach by integrating with Slack so they can further elevate and streamline the care experiences by quickly resolving and troubleshooting with case swarming. Case swarming is a collaborative approach to customer service where support agents for an OTT service can bring in a team of skilled experts from across the organization, sales, support, billing etc. to solve complex service cases. During the case-swarming process, support experts share background knowledge and resources with agents so that once a resolution is reached, the team documents the steps in a knowledge article to help other agents with similar issues in the future. I’ve personally found this doesn’t currently happening within a lot of customer service departments.

When it comes to engagement, OTT services must have a platform that surfaces upsell and cross-sell opportunities that leverage customer insight profiles, current services and purchases, and consumption engagement to suggest the next best action across sales and service interactions. Salesforce uses an integrated set of AI technologies called Einstein, that helps companies boost productivity and discover relevant patterns in the data, whether that data resides in the Salesforce platform or outside. This insight can then be leveraged by sales to anticipate new opportunities and by marketing to create predictive journeys and personalize experiences. It can also be utilized by service and support to proactively resolve issues before they happen and by technical dev teams to create better apps.

Salesforce says their Einstein AI technology is already being used by content owners to uncover timely and actionable insights, such as subscribers with a high propensity to churn or upgrade, giving OTT teams the opportunity to drive retention and growth with personalized journeys and subscriber care experiences. It is also being leveraged to predict business outcomes, such as churn or lifetime value and delivers relevant recommendations to viewers. Salesforce says one of the keys to their platform is their approach to open API support that allows them to tie into partners like Amazon Web Services for content-driven commerce experiences and targeted ad placements. They also have platform partners with Deloitte’s customer lifetime value accelerator offering and with Conviva for their continuous measurement platform.

With so many streaming services in the market, consumers are and will continue to be overwhelmed with choice. As a result, video services are going to have to do a better job of making churn, retention and engagement a key part of their strategy going forward and look for solutions and strategies that actually address the problem.

HBO Max: New Apps Coming for Apple TV, Eliminates All Mid-Roll Ads on Select Movies, New Roku App Reduced Crash Rate by 90%

HBO Max says they are in progress on the migration of tvOS to a new platform and the final phase of replacing their connected TV apps will include updates to Amazon Fire TV and Xbox devices and is expected to roll out soon. Updates were also made to the partners who have already migrated to the re-built app including Roku, PlayStation4/5, Android TV + Set Top Boxes (STBs), Samsung Tizen, Xfinity X1, Cox, LG, Vizio and Vodafone/Sagemcom.

The connected TV platforms that have switched over thus far have shown significant performance improvements with a nearly 90% crash rate reduction on Roku (based on 6 months of performance). Android app launch time decreased by nearly 50% and they have seen a 40% average decrease in homepage load time on PlayStation and Roku. The HBO Max app on Apple TV is currently in the process of being replatformed to provide better functionality and an improved tvOS user experience.

HBO Max has also introduced a “Brand Block InFront Ads” experience on HBO Max with Ads, which enables brands to sponsor an up-front ad experience for viewers by eliminating all mid-roll ads on select movies. Consumers can now watch up to 90 seconds of video ads before a movie begins so that it runs in its entirety ad-free, with no interruptions. (I personally like this user-experience a lot)

HBO Max says more than 91 in-market bugs have been resolved in the areas of accessibility, content discovery, clients and platforms, purchase and identity, and the video player experience since the start of the year. Here’s a list of some of those updates:

  • Tizen: Fixed a critical issue with some Tizen models where playback would fail on the first attempt but succeed on the second. Reduced playback failures to nearly 0%.
  • Safari: Added a fallback to a different video encode when the first fails. Reduced playback failures by over 60% and customer service contacts by over 80%.
  • Cursor on Desktop: The cursor is now hidden for users on desktop devices.
  • Chromecast: Extended the “Skip Intro” feature to Chromecast. Users now have the ability to see and act on the skip option from the app while in an active Chromecast viewing session.
  • Android & iOS: Users will now be able to “pinch” to zoom in/out in the player, allowing them to toggle between widescreen/fullscreen views. This will allow users to take advantage of the screen real estate.
  • Roku: Users now have full multi-language playback capabilities and updated player designs.
  • Autoplay Setting: Users can now manage their Autoplay settings under the “Experience” tab in settings, addressing trending customer feedback. (Android TV, Samsung Tizen, Xfinity X1, Cox, LG, Vizio & Vodafone/Sagemcom)
  • The Scrollable Immersive Hero: Banner videos are now scrollable, allowing users to choose between multiple assets, providing them with more control over their browsing experience. (Apple TV, Android TV, PlayStation 4/5, Roku, Samsung Tizen, Xfinity X1, Cox, LG, Vizio and Vodafone/Sagemcom)

Kudos to HBO Max for always being willing to discuss what they are working on to make their user-experience better. Other OTT services should take note and follow their example.

Leaving Frost & Sullivan As Analyst, Open To New Opportunities Around Data and Research

After 15 years as a Principal Analyst at Frost & Sullivan, I will be leaving the company as an employee. Frost has changed coverage areas and will no longer focus on Digital Media. I am still interested in a lot of aspects around market sizing, methodology, data collection etc. and am open to new opportunities. Please contact me if you’d like to discuss ideas.

For vendor briefings, nothing changes. I have always done briefings with vendors at any time, free of charge, and will continue to do so. None of my contact information changes.

I’d like to thank Frost & Sullivan and my boss Mukul Krishna for 15 great years with the company and I wish Frost all the best in their business.

Podcast Episode 17: Debating The Holy Grail Of The Streaming Industry, OTT Service Aggregation

Podcast Episode 17 is live! This week we discuss the holy grail of of the streaming media industry, a single platform to aggregate streaming media services. With new Discover and Universal Watchlist  functionality from Plex and news from Verizon about their +Play platform to centralize subscription services, we debate what might really take place in the market. We also cover some streaming viewership numbers from March Madness, the news of Disney+ getting live content with Dancing With the Stars and breakdown some of the technical limitations of the MLB stream on Apple TV+.

 Thanks to this week’s podcast sponsors, Agora and NPAW.

Correction: The MLB games on Apple TV+ will be free for the “first 12 weeks”, not just the first game like I suggested.

Companies, and services mentioned: Apple TV+, MLB, Disney+, Plex, Verizon, Netflix, Peacock TV, NFL.

PE Firm PSG Acquires Zype, ftrack, iconik, Celtx, Wildmoka, Launches Backlight

Backlight, a new technology company backed by growth equity firm PSG has launched in the market along with the news that it has acquired ftrack, iconik, Celtx, Wildmoka and Zype. PSG led the investment of $200M+ into Backlight for all the acquisitions and future working capital of the companies, but isn’t disclosing how much it paid for any of the vendors. The most well known of the bunch and largest in revenue is Zype, which raised close to $19 million in funding since inception.

Interestingly enough, the team at Backlight isn’t looking at the new company as the next big platform in the market. It’s actually the opposite. The value that they’re bringing to these existing small companies comes from the scale and infrastructure Backlight provides with a holding company strategy. In turn, this creates more opportunity for their new business units to focus on creating the best possible tools and solutions, while removing a lot of the barriers of scale that small companies encounter.

Backlight states that its mission is to serve media, entertainment and video-forward customers with cloud-based solutions that dramatically improve every step of the media content lifecycle. Each of the business units provide customers with different solutions to help them create content experiences.

The Backlight business units are:

  • ftrack is the creator of ftrack Studio, cineSync, and ftrack Review, the Emmy and Academy Award-winning production tracking, interactive media review, and team collaboration platforms for the creative industries. ftrack’s solutions are designed for producers, supervisors, artists, and pipeline developers to collaborate with anyone, anywhere.
  • iconik is a cloud-native, SaaS media management solution that is designed for users to share files from any storage, collaborate on video, and enrich media with AI for high searchability—all with great ease and the ability to scale to serve solo creators or large global teams.
  • Celtx is an all-in-one solution for writing, planning, and managing media production that is used by millions worldwide. Celtx provides pre-production planning software, including scriptwriting, storyboarding, shot-planning and budgeting, to in-house production teams, agencies, film schools and universities, game studios, and media & entertainment companies.
  • Wildmoka is a platform for the creation of live and near-live content in Sports, News and Entertainment. It has won several awards for its AutoReZone technology, which helps broadcasters provide a mobile-first experience. Wildmoka’s cloud-native Digital Media Factory aims to empower broadcasters and rights owners to produce and deliver content from any source, to any destination, in any format, at speed and at scale.
  • Zype provides the infrastructure for digital video with a cloud-based platform to manage and distribute enterprise-grade video across the web, mobile, TV, and social media. Offering both developer-friendly tools such as customizable APIs as well as turnkey solutions for OTT apps and linear/FAST channels, Zype’s SaaS solutions enable video creators or distributors to quickly build, launch and manage superior video products at scale

As we’ve seen, the market rewards growth and scale, and puts a premium on growth at scale. In speaking with Ben Kaplan (LinkedIn), Backlight’s CEO, his goal for these businesses is to put them in the best possible situation where they can focus on products and services and help drive the whole portfolio towards growth at scale. Across all the companies, Backlight has about 300 employees and expects to be 350+ by the end of this year.