Why IGTV should go premium – TechCrunch
It’s been four months since Facebook launched IGTV, with the goal of creating a destination for longer-form Instagram videos. Is it shaping up to be a high-profile flop, or could this be the company’s next multi-billion-dollar business?
IGTV, which features videos up to 60 minutes versus Instagram’s normal 60-second limit, hasn’t made much of a splash yet. Since there are no ads yet, it hasn’t made a dollar, either. But, it offers Facebook the opportunity to dominate a new category of premium video, and to develop a subscription business that better aligns with high-quality content.
Facebook worked with numerous media brands and celebrities to shoot high-quality, vertical videos for IGTV’s launch on June 20, as both a dedicated app and a section within the main Instagram app. But IGTV has been quiet since. I’ve heard repeatedly in conversations with media executives that almost no one is creating content specifically for IGTV and that the audience on IGTV remains small relative to the distribution of videos on Snapchat or Facebook. Most videos on it are repurposed from a brand’s or influencer’s Snapchat account (at best) or YouTube channel (more common). Digiday heard the same feedback.
Facebook’s goal should be to make IGTV a major property in its own right, distinct from the Instagram feed. To do that, the company should follow the concept embodied in the “IGTV” name and re-envision what television shows native to the format of an Instagram user would look like.
Its team should leverage the playbook of top TV streaming services like Netflix and Hulu in developing original series with top talent in Hollywood to anchor their own subscription service, but in it a new format of shows produced specifically for the vertically oriented, distraction-filled screen of a smartphone.
Mobile video is going premium
Of the 6+ hours per day that Americans spend on digital media, the majority on that is now on their phone (most of it on social and entertainment activities) and video viewing has grown with it. In addition to the decline in linear television viewing and rise of “over-the-top” streaming services like Netflix and Hulu, we’ve seen the creation of a whole new category of video: mobile native video.
Starting at its most basic iteration with everyday users’ recordings for Snapchat Stories, Instagram Stories and YouTube vlogs, mobile video is a very different viewing environment with a lot more competition for attention. Mobile video is watched as people are going about their day. They might commit a few minutes at a time, but not hour-long blocks, and there are distracting text messages and push notifications overlaid on the screen as they watch.
When I spoke recently with Jesús Chavez, CEO of the mobile-focused production company Vertical Networks in Los Angeles, he emphasized that successful episodic videos on mobile aren’t just normal TV clips with changes to the “packaging” (cropped for vertical, thumbnails selected to get clicks, etc.). The way episodes are written and shot has to be completely different to succeed. Chavez put it in terms of the higher “density” of mobile-native videos: packing more activity into a short time window, with faster dialogue, fewer setup shots, split screens and other tactics.
With the growing amount of time people spend watching videos on their social apps each day — and the flood of subpar videos chasing view counts — it makes sense that they would desire a premium content option. We have seen this scenario before as ad-dependent radio gave rise to subscription satellite radio like Sirius XM and ad-dependent network TV gave rise to pay-TV channels like HBO. What that looks like in this context is a trusted service with the same high bar for riveting storytelling of popular films and TV series — and often featuring famous talent from those — but native to the vertical, smartphone environment.
If IGTV pursues this path, it would compete most directly with Quibi, the new venture that Jeffrey Katzenberg and Meg Whitman are raising $2 billion to launch (and was temporarily called NewTV until their announcement at Vanity Fair’s New Establishment Summit last Wednesday). They are developing a big library of exclusive shows by iconic directors like Guillermo del Toro and Jason Blum crafted specifically for smartphones through their upcoming subscription-based app.
Quibi’s funding is coming from the world’s largest studios (Disney, Fox, Sony, Lionsgate, MGM, NBCU, Viacom, Alibaba, etc.) whose executives see substantial enough opportunity in such a platform — which they could then produce content for — to write nine-figure checks.
TechCrunch’s Josh Constine argued last year Snapchat should go in a similar “HBO of mobile” direction as well, albeit ad-supported rather than a subscription model. The company indeed seems to be stepping further in this direction with last week’s announcement of Snapchat Originals, although it has announced and then canceled original content plans before.
Facebook is the best positioned to win
Facebook is the best positioned to seize this opportunity, and IGTV is the vehicle for doing so. Without even considering integrations with the Facebook, Messenger or WhatsApp apps, Facebook is starting with a base of more than 1 billion monthly active users on Instagram alone. That’s an enormous audience to expose these original shows to, and an audience who don’t need to create or sign into a separate account to explore what’s playing on IGTV. Broader distribution is also a selling point for creative talent: They want their shows to be seen by large audiences.
The user data that makes Facebook rivaled only by Google in targeted advertising would give IGTV’s recommendation algorithms a distinct advantage in pushing users to the IGTV shows most relevant to their interests and most popular among their friends.
The social nature of Instagram is an advantage in driving awareness and engagement around IGTV shows: Instagram users could see when someone they follow watches or “likes” a show (pending their privacy settings). An obvious feature would be to allow users to discuss or review a show by sharing it to their main Instagram feed with a comment; their followers would see a clip or trailer, then be able to click-through to the full show in IGTV with one tap.
Developing and acquiring a library of must-see, high-quality original productions is massively capital-intensive — just ask Netflix about the $13 billion it’s spending this year. Targeting premium-quality mobile video will be no different. That’s why Katzenberg and Whitman are raising a $2 billion war chest for Quibi and budgeting production costs of $100,000-150,000 per minute on par with top TV shows. Facebook has $42 billion in cash and equivalents on its balance sheet. It can easily outspend Quibi and Snap in financing and marketing original shows by a mix of newcomers and Hollywood icons.
Snap can’t afford (financially) to compete head-on and doesn’t have the same scale of distribution. It is at 188 million daily active users and no longer growing rapidly (up 8 percent over the last year, but DAUs actually shrunk by 3 million last quarter). Snapchat is also a much more private interface: it doesn’t enable users to see each others’ activity like Facebook, Instagram, LinkedIn, YouTube, Spotify and others do to encourage content discovery. Snap is more likely to create a hub for ad-supported mobile-first shows for teens and early-twentysomethings rather than rival Quibi or IGTV in creating a more broadly popular Netflix or Hulu of mobile-native shows.
It’s time to go freemium
Investing substantial capital upfront is especially necessary for a company launching a subscription tier: consumers must see enough compelling content behind the paywall from the start, and enough new content regularly added, to find an ongoing subscription worthwhile.
There is currently no monetization of IGTV. It is sitting in experimentation mode as Facebook watches how people use it. If any company can drive enough ad revenue solely from short commercials to still profit on high-cost, high-quality episodic shows on mobile, it’s Facebook. But a freemium subscription model makes more sense for IGTV. From a financial standpoint, building IGTV into its own profitable P&L while making substantial content investments likely demands more revenue than ads alone will generate.
Of equal importance is incentive alignment. Subscriptions are defined by “time well spent” rather time spent and clicks made: quality over quantity. This is the environment in which premium content of other formats has thrived too; Sirius XM as the breakout on radio, HBO on linear TV, Netflix in OTT originals. The type of content IGTV will incentivize, and the creative talent they’ll attract, will be much higher quality when the incentives are to create must-see shows that drive new subscribers than when the incentives are to create videos that optimize for views.
The optimization for views (to drive ad revenue) have been the model that media companies creating content for Facebook have operated on for the last decade. The toxicity of this has been a top news story over the last year with Facebook acknowledging many of the issues with clickbait and sensationalism and vowing changes.
Over the years, Facebook has dragged media companies up and down with changes to its newsfeed algorithm that forced them to make dramatic changes to their content strategies (often with layoffs and restructuring). It has burned bridges with media companies in the process; especially after last January, how to reduce dependence on Facebook platforms has become a common discussion point among digital content executives. If Facebook wants to get top producers, directors and production companies investing their time and resources in developing a new format of high-quality video series for IGTV, it needs an incentives-aligned business model they can trust to stay consistent.
Imagine a free, ad-supported tier for videos by influencers and media partners (plus select “IGTV Originals”) to draw in Instagram users, then a $3-8/month subscription tier for access to all IGTV Originals and an ad-free viewing experience. (By comparison, Quibi plans to charge a $5/month subscription with ads with the option of $8/month for its ad-free tier.)
Looking at the growth of Netflix in traditional TV streaming, a subscription-based business should be a welcome addition to Facebook’s portfolio of leading content-sharing platforms. This wouldn’t be its first expansion beyond ad revenue: the newest major division of Facebook, Oculus, generates revenue from hardware sales and a 30 percent cut of the revenue to VR apps in the Oculus app store (similar to Apple’s cut of iOS app revenue). Facebook is also testing a dating app which — based on the freemium business model Tinder, Bumble, Hinge, and other leading dating apps have proven to work — would be natural to add a subscription tier to.
Facebook is facing more public scrutiny (and government regulation) on data privacy and its ad targeting than ever before. Incorporating subscriptions and transaction fees as revenue streams benefits the company financially, creates a healthier alignment of incentives with users and eases the public criticism of how Facebook is using people’s data. Facebook is already testing subscriptions to Facebook Groups and has even explored offering a subscription alternative to advertising across its core social platforms. It is quite unlikely to do the latter, but developing revenue streams beyond ads is clearly something the company’s leadership is contemplating.
The path forward
IGTV needs to make product changes if it heads in this direction. Right now videos can’t link together to form a series (i.e. one show with multiple episodes) and discoverability is very weak. Beyond seeing recent videos by those you follow, videos that are trending and a selection of recommendations, you can only search for channels to follow (based on name). There’s no way to search for specific videos or shows, no way to browse channels or videos by topic and no way to see what people you follow are watching.
It would be a missed opportunity not to vie for this. The upside is enormous — owning the Netflix of a new content category — while the downside is fairly minimal for a company with such a large balance sheet.
The first round of Disney layoffs begins this week, CEO Bob Iger shares in memo
In February, Disney CEO Bob Iger told shareholders in an earnings call that the company plans to lay off 7,000 employees as part of a significant restructuring. Today, in an internal memo to employees, which TechCrunch was able to obtain, Iger revealed that there will be three rounds of layoffs, with the first beginning this week.
“This week, we begin notifying employees whose positions are impacted by the company’s workforce reductions,” Iger wrote. “Leaders will be communicating the news directly to the first group of impacted employees over the next four days. A second, larger round of notifications will happen in April with several thousand more staff reductions, and we expect to commence the final round of notifications before the beginning of the summer to reach our 7,000-job target.”
The job cuts will reportedly affect Disney’s media and distribution segment along with ESPN and the parks and resorts division, according to CNBC.
“For our employees who aren’t impacted, I want to acknowledge that there will no doubt be challenges ahead as we continue building the structures and functions that will enable us to be successful moving forward. I ask for your continued understanding and collaboration during this time,” Iger added.
Iger returned as CEO in November 2022, replacing Bob Chapek. Since the takeover, Iger has already made significant organizational changes to the company. In addition to the layoffs, the company will also cut down on spending. Disney plans to cut $5.5 billion in costs, including $3 billion in content spend.
Iger has also admitted to being “open-minded” about the sale of Hulu, which Comcast partially owns.
Despite Disney’s direct-to-consumer division increasing in revenue by 13% to $5.3 billion, the company reported an operating loss of about $1.1 billion, which it blamed on higher costs at Disney+ and Hulu.
While Disney+ reported its first-ever subscriber loss in Q1 2023, the company noted that its streaming business — Disney+, Hulu and ESPN+ — will become profitable in late 2024. Netflix is one streaming service that has managed to turn a profit.
Disney+ lost 2.4 million global subscribers in the first quarter of 2023. However, it managed to gain 200,000 subs in the U.S. and Canada. Hulu and ESPN+, on the other hand, added 800,000 and 600,000, respectively.
Disney’s annual shareholder meeting is set to occur on April 3.
As media companies continue to face losses in the current market, many are adopting the same strategy as Disney. In 2022, Warner Bros. Discovery dealt with job cuts and removed HBO Max content as it confronts a debt load of $53 billion. This company intends to save $3 billion in 2023.
You can now bundle Frontier internet with YouTube TV on the same bill
YouTube TV announced today that it expanded its partnership with internet service provider Frontier to launch a single billing option, which will allow customers in the U.S. to bundle fiber internet with YouTube TV on one bill.
YouTube TV teamed up with Frontier in 2021 to give customers access to fiber internet and a live TV streaming service. However, they had to pay the providers separately. Today’s launch of integrated billing will make it more convenient for users.
Also, Frontier fiber internet customers will now get $10 off the YouTube TV subscription for one year, whereas existing Frontier TV customers will receive $15 off.
The offering is likely to convince customers to switch to YouTube TV as Frontier no longer offers its TV service. After filing for bankruptcy in 2020, Frontier stopped offering cable television in 2021.
Many cable TV companies have decided to either launch streaming services or partner with services like YouTube TV. For instance, in 2021, Disney announced plans to shut down hundreds of cable channels as it shifted focus to its flagship streamer Disney+.
“Our partnership with YouTube TV makes it easier for customers to ditch cable,” John Harrobin, Frontier’s Executive Vice President of Consumer, said in a statement. “We take our position as the un-cable provider seriously and are constantly listening to consumers. Many want one source for internet and TV, and that’s what this partnership is all about.”
It’s important to note that Frontier is only available in 25 states. However, YouTube TV also partners with other internet companies, such as Verizon.
YouTube TV has more than five million paid subscribers and trialers in the United States. Earlier this month, the company increased its subscription price to $72.99 per month, up from $64.99.
Here’s how to stream Major League Baseball games in 2023
Major League Baseball (MLB) regular season is back this week, with Opening Day beginning on Thursday, March 30. MLB Opening Day 2023 will be one to watch since all 30 teams play their first game of the regular season on the same day– the first time since 1968 when such an event occurred.
With so many major league teams, it can be tricky to figure out where and how to watch the games you want to watch—especially for cord-cutters. For instance, nationally televised games will be broadcast on Fox, FS1, TBS, ESPN and MLB Network, whereas local team’s games will air on regional sports networks (RSNs).
Another channel worth watching is MLB Network Strike Zone because it provides highlights, updates, scores, standings and stats from teams across the league. The channel broadcasts on Wednesdays and Fridays, when several games are going on at once, to ensure you don’t miss out on the action.
Plus, this year will be the second time that Apple TV+ is the exclusive home of “Friday Night Baseball” games. Peacock also livestreams exclusive MLB games with its Sunday morning package, “MLB Sunday Leadoff.”
In total, the MLB regular season consists of 2,430 games.
Here are some of the best live TV streaming services to watch MLB games this 2023 season:
- Sling TV
- Hulu Live TV
- YouTube TV
Starting off with an obvious one, MLB.TV is a streaming package that Major League Baseball directly offers.
The subscription costs $24.99 per month or $149.99 per year and allows fans to watch every out-of-market game, making it a great option for viewers who want to watch a team that doesn’t play in their home city.
While MLB.TV subscribers won’t be able to watch a livestream of their local team, the games are available to watch on-demand 90 minutes after they end.
Fans can sign up for MLB.TV either on the MLB website or through streaming services like Prime Video and Fubo.
The most expensive on the list is DirecTV’s “Choice” plan, which is $84.99 per month. Fortunately, the plan is also the most comprehensive, with access to every national MLB channel, including Fox, FS1, TBS, ESPN and MLB Network.
You’ll most likely get your local RSN as well, depending on your location.
DirecTV also has the MLB Extra Innings add-on, which is $149.99 per season, and gives you every out-of-market game along with MLB Network Strike Zone and MLB Extra Innings Mix, which lets users stream up to eight games at the same time.
Sling TV, on the other hand, is arguably the best bang for your buck. For $70 a month, users can sign up for the Orange & Blue bundle ($55/month), as well as the Sports Extra add-on ($15/month), to get access to Fox, FS1, TBS, ESPN, MLB Network and MLB Network Strike Zone.
However, there are no RSNs or out-of-market games on Sling TV.
Fubo (formerly FuboTV) offers MLB Network, MLB Strike Zone, ESPN, Fox, FS1 and RSN coverage. One caveat is that Fubo doesn’t broadcast TBS.
Fubo has three subscription plans: Pro ($74.99/month), Elite ($84.99/month) and Premier ($94.99/month).
The streaming service recently announced it is launching an MLB.TV add-on for $24.99 per month.
Hulu Live TV is great for fans who want to watch nationally broadcast games on FOX, TBS and ESPN. However, the streamer doesn’t have as many RSNs as it used to, so there may be blackout restrictions. For example, Hulu Live TV doesn’t offer RSN groups like AT&T SportsNet and Bally Sports.
Also, out-of-market games aren’t available on Hulu Live TV.
ESPN+ is home to daily regular-season games that air live on ESPN. Note that MLB games on ESPN+ may have local blackout restrictions.
While YouTube TV ($72.99/month) dropped MLB Network this year, it still carries most RSNs and national networks like Fox, ESPN, and TBS.
The reason YouTube TV dropped MLB Network was because of a carriage dispute, which is becoming more common recently. These disputes are making it very difficult for sports fans to find RSNs across both live TV streaming services and linear television.
Plus, YouTube TV is another streaming service that doesn’t offer Bally Sports RSNs.
Speaking of Bally Sports, 19 of its RSNs may be in trouble. Recently, Diamond Sports Group (DSG), an independent subsidiary of Sinclair Broadcasting Group that owns these 19 RSNs, filed for bankruptcy.
But the good news is that Major League Baseball will likely take over the RSNs if DSG is no longer able to broadcast them.
Here are some of the most important dates to keep an eye on this season, including Opening Day, which starts at 1:05 p.m. ET with the first two games scheduled: Atlanta Braves vs. Washington Nationals and San Francisco Giants vs. New York Yankees.
- March 30: Opening Day
- April 29-30: Mexico City Series
- July 11: All-Star Game
- October 1: Final day of MLB regular-season
- October 3: MLB Playoffs
Note that the dates for the World Series, Division Series and Championship Series are TBD.
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