Warner Bros. Discovery’s “No Mas” as Cash Outweighs Streaming

The more things change in legacy media, the more they stay the same. After HBO Now launched under Jeff Bewkes’ reign atop Time Warner, he was forced to make strategic trade-offs to bolster EBITDA in hopes of selling the company before the core cable network business entered secular decline (it worked). HBO Now transformed into HBO Max under AT&T’s John Stankey and WarnerMedia’s Jason Kilar. While Stankey and Kilar’s “north star” was a DTC HBO Max, even they were forced … Continue reading Warner Bros. Discovery’s “No Mas” as Cash Outweighs Streaming

Are Zaslav, Chapek, Roberts, Redstone and Murdoch Prepared to Take Evasive Action?

“Houston we have a problem” from the Apollo 13 successful failed mission in 1970 (and the 1995 movie) reminds us that NASA astronauts are trained and prepare extensively for worst case scenarios, whereas legacy media executives have not even acknowledged the dangerous situation they are entering, let alone operationally prepared to take evasive action as cable network revenues appear set to turn negative. Legacy media is facing a crisis they have never faced before: Cord-Cutting accelerating rapidly as consumers abandon … Continue reading Are Zaslav, Chapek, Roberts, Redstone and Murdoch Prepared to Take Evasive Action?

AT&T’s Q2 Was Actually Good. Here’s Why

I know the LightShed mantra is to not publish Earnings previews or reviews, but the move in AT&T’s stock today compelled us to provide our views on the free cash flow debate.  We believe AT&T’s stock was down today primarily on bad forecasting of its working capital. Yes, we needed to cut our estimates on government and business wireline, but the increases to our wireless and fiber estimates largely offset that. It’s startling that the stock would sell off this … Continue reading AT&T’s Q2 Was Actually Good. Here’s Why

12 Questions for Netflix’s Q2 2022 Earnings Interview Tonight

Here are our 12 key questions for Netflix management on tonight’s Q2 2022 earnings interview (our Q1 2022 questions can be found here). 1) Does Netflix have a content quality control issue? Kim Masters recently wrote an article (link) that shed light on the internal tension between content quality control and driving content scale. Do you believe that you have properly balanced these two competing forces? Co-CEO Ted Sarandos often talked about the significant number of people with greenlight authority at … Continue reading 12 Questions for Netflix’s Q2 2022 Earnings Interview Tonight

LightShed’s Rich Greenfield Interviewed by Puck News’ Matthew Belloni on The Town Podcast July 2022

Last week, Puck News’ Matt Belloni interviewed us on The Town podcast to discuss the state of the streaming wars as investors appear to have given up on the entire sector, the importance of time spent vs. subs as advertising grows in importance (see today’s time spent blog post, link), why Microsoft makes sense as an ad partner for Netflix, whether legacy media will slow streaming investment in a recession, why Disney should sell Hulu to Comcast, the SkyDance threat to Disney’s animation prowess and what happens if Apple TV+ wins Sunday Ticket. Continue reading

Advertising: Streamers, If You Do Not Optimize for Time Spent, You Will Fail

In the linear TV world, consumers were essentially stuck in a walled-garden of broadcast and cable networks. Channel surfing led to consumers stumbling on programming and getting lost in the world of linear TV. At its peak, over 100 million households were subscribing to a multichannel bundle of TV channels and watching 5+ hours/day/person, generating over $70 billion of national and local TV advertising. While virtually every legacy media company has embraced direct-to-consumer streaming, they remain financially tethered to the … Continue reading Advertising: Streamers, If You Do Not Optimize for Time Spent, You Will Fail

HBO’s Latest Drama (Or Comedy): The Return to Amazon Channels

For most of its life, HBO was a wholesaler, offering its content to MVPDs, who then sold it in packages or a la carte to consumers as a premium add-on to their multichannel bundle. HBO also monetized its library by selling/renting its original content directly to consumers via DVDs. In late 2014, HBO struck a landmark deal with Amazon Prime Video, enabling consumers to stream HBO catalog content for the first time as part of a subscription service not branded … Continue reading HBO’s Latest Drama (Or Comedy): The Return to Amazon Channels

The Cost and Benefit Of Verizon’s Price Cut

We took a quick look at this morning’s headline about Verizon’s price cut to $30 from $35 for entry level unlimited lines. Promotion cost Verizon announced a new entry-level unlimited plan. We estimate that less than 1 million existing subscribers will re-rate to this lower priced plan. That translates to a $60 million impact to annual service revenue, ~$0.20 to our post-paid phone ARPU and < 5 basis points of headwind to our forward revenue growth estimate. In other words, … Continue reading The Cost and Benefit Of Verizon’s Price Cut

The LightShed Earnings Scorecard. Edition 4

Welcome to the Fourth Edition of the LightShed Earnings Scorecard. We’re happy to report that the length of prepared remarks declined in Q1. Meanwhile, the discussion about inflation picked up dramatically and we added “recession” to the list of terms we track. Please enjoy our ongoing and hopefully entertaining mission to hold companies and analysts accountable for the quality of earnings calls. 67 companies. 61 listening hours We now track the quarterly earnings calls of 67 companies. This quarter we added … Continue reading The LightShed Earnings Scorecard. Edition 4

Here’s Why Wireless Operators Should Be Raising Price And Cutting Costs

Wireless operators in the United States are getting increasingly comfortable with implementing price increases. Over the past two months they added over $3 billion of recurring service revenue through increases to administrative fees and outright rate plan changes to existing subscribers. But is this enough to hit revenue and cash flow targets? We discuss what might come next as the US economy enters a more challenging period. We also adjust estimates and target valuations. Price increases not yet spiking churn … Continue reading Here’s Why Wireless Operators Should Be Raising Price And Cutting Costs