Speaker 1: 0:02

Welcome to this week's edition of the Dan Rayburn podcast, the show that curates the streaming media industry news that matters most, unvarnished, unscripted and providing you with the factual data you need to know, without any of the hype, the pulse of the streaming media industry.

Speaker 2: 0:20

Welcome to the Dan Rayburn podcast. I am Dan Rayburn co-host, mark Donaghan. Mark, hello, let's jump right in here today.

Speaker 3: 0:26

Let's jump in, because we've got a lot to cover.

Speaker 2: 0:28

Yes, we do And I don't want to make this an hour long podcast. So let's jump into YouTube Now. It's been about week and a half Mark since we recorded a podcast due to travel and whatnot, so a little bit of what I'm going to talk about here. I'm going to give dates so people understand when this happens. So let's jump into YouTube TV.

Speaker 2: 0:47

I know we've been talking about this a lot, but this is really a big deal for the entire industry what they have coming up with an NFL Sunday ticket. So on June 22, youtube TV had an outage, which is now their second one in the past month, and they confirmed that they had a networking issue impacting YouTube's connectivity with Verizon. So it was about a 30 minute networking issue And it impacted the YouTube website as well, and obviously not ideal timing. For those who don't remember, it happened during the NBA playoffs. So I'm concerned.

Speaker 2: 1:22

Youtube TV is not really ready to support Sunday ticket with the experience consumers are expecting. And then you know earlier this week to have. Let's see, we're recording this. The first week in July, july 7th, users and social media were complaining. Trying to get on the phone with YouTube support was resulting in whole times of over three hours. Oh wow, i even experienced that as well. I posted something up to to LinkedIn and Twitter, so there's going to be problems with NFL Sunday ticket. We just know that. Well, we know consumers are going to have issues, but consumers are not going to wait for three hours for support.

Speaker 1: 2:06

Yeah.

Speaker 2: 2:07

I'm just really concerned here with with everything that they're trying to do in such a short period of time. So interesting to note YouTube TV dropped SNY, and they previously dropped, yes, in the MLB network, and obviously one of the only reasons consumers have live TV that we know is is sports. So interesting to note, though, mark, and good job here on YouTube TV, they are offering refunds for NFL Sunday ticket purchase, at least to some members who reached out and said well, i would not have signed up for NFL Sunday ticket if I knew you were dropping SNY, yeah, and these users online are saying they are getting refunds. So that's interesting, because obviously the language with NFL Sunday ticket is very clear over and over and over on their website No refunds, yeah.

Speaker 3: 3:02

Yeah, Is that related to these RSN conflicts? you know, the dropping of SNY?

Speaker 2: 3:13

Basically, all SNY said and all YouTube said was, you know, publicly, on Twitter, of course was that we're trying to come to a deal, we're trying to be, you know, reasonable, you know they're both using terms similar to that, but we couldn't come up with a deal. Yeah, so who's really at fault here? I don't know. I would say both sides, i think, are always at fault, because the fan is the one who's losing. But YouTube TV now has a track record of dropping sports. Sny, yes, and it'll be network, yeah, it's not good. Clearly, they're not willing to pay what these companies want from a licensing standpoint. So unfortunately, mark, you know, we never get the numbers. We don't really know what's being charged or how much it's going up, but it never goes down.

Speaker 3: 3:58

We know that It never goes down, that's for sure, yeah.

Speaker 2: 4:01

Yeah, so we have to continue to watch what's going on with YouTube TV. So a little more on YouTube. they confirmed they're currently running a small experiment globally that urges viewers with ad blockers enabled to allow ads on YouTube or to try YouTube premium. They say we take disabling playback very seriously and will only disable playback if viewers ignore repeated requests to allow ads on YouTube. That's their quote. Now users are reporting that prevents viewers from watching more than three videos on YouTube when an ad blocker is active. Very interesting. Now, this is YouTube only, not YouTube TV, obviously.

Speaker 1: 4:41

Yeah, that's right.

Speaker 2: 4:43

And it's quote a small experiment. Now how small is small? We don't know. Youtube has a lot of viewers, yeah, yeah. So very interesting in that YouTube is pushing users to YouTube premium, because obviously that removes ads from the service, in addition to giving you other benefits like YouTube music premium and offline downloads. But the price is $12 a month or $120 for the year. So super interesting to see the shift in the Avon model What's called? over the last 18 months because, as we know, in Q1 of this year, youtube ad revenue fell 2.6% year over year. It was the third quarter in a row that YouTube's ad revenue decreased. So is it because of ad blockers? Is that creating that big of an impact?

Speaker 3: 5:36

I don't know, Yeah, interesting. Hey, I wanted to ask you, Dan, did you get any insights in this connectivity issue with Verizon in this outage? I mean No.

Speaker 2: 5:48

I don't know what the outage was. Yeah, verizon doesn't speak about things like that, of course. Yeah, but probably one of the best companies out there in terms of saying a lot and giving you absolutely nothing, just words, smithing to where it's like you just gave three paragraphs and said absolutely nothing.

Speaker 3: 6:09

That's called really good marketing communications.

Speaker 2: 6:12

That's Verizon And then Markom. So I could have dug into that and made some inquiries to some others, but I just honestly, i didn't really care. The bottom line is it's an outage. Whose fault it was? Well, that's always on YouTube, because they're the one that the consumer is seeing, sure, in this case. But no, i don't know the cause of it Okay.

Speaker 2: 6:35

So YouTube ad revenue interesting Now separately, Mark. it's also been reported this past week, based on some research from a third-party company, that about 80% they're saying 80% of Google's video ad placements on third-party sites violated promise standards. Now Google has disputed that claim in a long blog post. Now we're not going to go into this right now. I'm actually going to have a special guest on next week, Mark, where we're going to do an entire conversation just around this and the data, because this person's an expert on this.

Speaker 2: 7:06

Yeah, that would be exciting, a lot of interesting things going on here with YouTube right now, but the bottom line is, you know, key takeaway for listeners is they're three quarters in a row, ad revenues decreased. So what are they looking at? They're looking at how do we deliver more ads or, if users don't want ads, how do we almost force them to have to go to a paid model. And I hate to compare it to Twitter, but it's kind of similar And it's like Hey, by the way there's no limit on how many tweets you can read.

Speaker 2: 7:34

Oh, you want to be able to read more? Well, you better pay us.

Speaker 3: 7:37

You got to pay, yeah, so we'll see how well that works. Well, it turns out that attention can only be monetized so far.

Speaker 2: 7:48

You know, i mean, that's the reality which is obviously something everyone's challenged for is we only have a limited amount of time in the day We can consume content of all kinds, and everyone's buying for our eyeballs and our time and our engagement, yeah, which takes us right into the next topic, mark, which we're talking about. You're talking about monetizing content. So there was an announcement This is a week or two old now that Plex laid off 20% of its employees. A couple of folks got the letter from the CEO that went around internally And I posted, as you saw, mark, on LinkedIn.

Speaker 2: 8:24

Just a bigger topic here, which is around fast. I keep seeing so many we all do keep seeing so many third party firms publish so much data around fast, nonstop about. Fast is growing and you know it's, you know the fastest growing aspect of the industry, and viewership is growing. But the problem is popularity without profitability is a problem, and as an industry, we have almost nothing in the way of P&L details from fast services. So, to break this down, companies like Fox have said that 2B has generated upwards of $1 billion in ad revenue in 2022, but they didn't disclose profitability. Pluto TV hit $1 billion in revenue in 2021, but Paramount won't disclose any details around profits either. And then, of course, we know Roku has these fast services, but Roku discloses their fast revenue as part of a larger revenue bucket they call platform segment revenue. So there's nothing around P&L for that either. So all these folks putting out data saying things like revenue growth will be significant in the next five years, it's irrelevant unless you're talking about profitability.

Speaker 3: 9:43

Yeah, that's right. The whole premise of fast and the huge opportunity around fast is that there is something that is so special and unique around this particular distribution model that it's opening up new markets effectively and therefore you're generating revenues that you wouldn't have had otherwise. Well, the reality is fast is called TV from day one, when there were advertisers. It's just simply monetization of the delivery of the service of the stream via advertising And again we're paying with our attention. That's why I said earlier, it turns out that there is headroom to how much you can monetize someone's attention.

Speaker 2: 10:39

I really liked that you mentioned that, because that's a really important point. you just said there This is not a new format. It's not a new format.

Speaker 3: 10:47

It's not a new revenue stream And everybody running around with respect to all the conference organizers, of which, dan, you are one, but I noticed that you don't exactly anchor your whole shows around fast.

Speaker 3: 11:02

No, definitely not There are some that do and it's like, fundamentally it doesn't make sense. So the fact that we're seeing this pressure, we're seeing and look YouTube ad revenue falling it was different dynamics over there, but it's related. If people just decide, hey, it's not relevant to me anymore, i like to get my entertainment in other ways and they're not watching these channels, well, there's no money coming in.

Speaker 2: 11:37

Yeah, you know, i don't mind that we're talking about it so much. Mark, obviously fast is growing. Okay, it's something we need to talk about, but the thing that just bothers me is what has Disney, paramount, warner Bros, media done? They've changed their entire business with profitability first. We know that. We have the numbers.

Speaker 1: 11:56

We've seen the layoffs.

Speaker 2: 11:57

We've seen the direct to consumer P and L of these companies. So the fact that it's an industry, we're running around talking about how fast it's growing with percentage numbers of portion of time spent viewing that data by itself is not helpful. If we are not including ad dollars, cpm trends, costs against the viewing numbers, we're spinning our wheels as an industry And that doesn't surprise me. This isn't the first topic in the last 25 years that the industry and vendors and others really want to get excited on. But let's make it really clear here Okay, plex laid off 20% of their people specifically because they were talking about fast services that they're offering. Sorry, fast channels, the ad revenue simply not being there to the degree they needed to. As a result, people are losing their jobs. So we have all the data in the market to show what is going on with fast and yet the amount of people who are sharing these fast reports on LinkedIn of, oh my God, the growth of fast. There's nothing in those reports I've seen about profitability, not a single one. That's right. So today, fast is not the financial success. Many suggestives And we don't know the true impact any business without a breakdown on P and L of the service.

Speaker 2: 13:19

Now a couple of people wanted to kind of say well, okay, dan, we don't disagree. But they said but we're still in the early innings of this. You can't expect it to be profitable from the get go. Well, look at what the companies are doing. If a movie isn't profitable, in many cases they're pulling it before it even goes to the service. Exactly, that's just, that's the reality of the market we're in. You may not agree with it, but that's the reality of the market. And also mark real quick. Now this, this, i just think, is so funny. So to be is owned by Fox. So they came out and they said in 2022, to be generated upwards of $1 billion ad revenue for the whole year. When you do a search and to be revenue, the very first Google result comes up says that their revenue is $14 billion. $14 billion, so it's off by magnitude of close to 14 times Google doesn't vet any sources And the company.

Speaker 2: 14:21

It's like one of those websites I've never heard of it where it just lists database and it lists like here's the closest competitor in their revenue And that's the first thing Google gives you. Thanks, google Doesn't even vet anything. So, man, for all the talk of information, how about giving us the right information? Real quick, mark. Let's just hit a couple of things. You'll know Roku and CBS have done a deal to become the exclusive US media partner for Formula E.

Speaker 2: 14:48

So if you don't know what Formula E is, it's, it's a little bit different. It's the motorsport series featuring electric racing cars. The deal expands a CBS prior deal with Formula E. So it's going to include five races per season on CBS, which will also stream on Paramount Plus, and Roku will stream 11 races per season on the Roku channel. So this will be free. However, neither company was giving out any details on who's selling the ads. Is it Roku, is it CBS? Yeah, because it's going to be free on Roku, so interesting to watch that It's also being reported It's not confirmed. This is a report that Warner Bros Discovery is planning to add live programming from CNN to the Mac streaming service later this year outside the US Outside the US would obviously be a lot easier for them.

Speaker 3: 15:38

Yeah.

Speaker 2: 15:39

Because it doesn't require renegotiating deals with TV providers. There was also a report that they're talking about adding it in the US at some point as well. Now we covered Mark during the Max announcement for the Max launch. I should say that the CEO interestingly they didn't cover anything in the Max launch around sports and news, but they did. The CEO did say at the time that they would have more to share about news and sports in the fall, so it sounds like this is coming later in the year. We'll hear more about it. Another thing MSG is launched officially. So the in-market streaming service, which does have blackout rules, is available to all users who can find MSG on pay TV providers. It'll give you the New York Knicks, new York Rangers, new York Islanders, new Jersey Devils, buffalo Sabres. Here's the pricing It's $310 per year.

Speaker 2: 16:36

Oh, thanks, that feels pricey, yeah, monthly subscription $30 a month And then you can buy a single game at $10 a month. They're obviously making the per game fee so high that they're hoping you go for the monthly, But it is officially out in the market. I have not tested it out, unless they're planning on giving me a free account to test it. I don't plan to. I just frankly don't care that much And I'm in New York. Real interesting distribution move Apple's uploaded the entire first season of its sci-fi TV show Silo on Twitter, So anyone on Twitter can watch it for free. Yeah, I thought that was interesting, interesting Wow.

Speaker 2: 17:19

Yeah, the move comes three days before it's going to air the show's final season on Apple TV Plus.

Speaker 3: 17:26

A lot must, must be a fan, maybe, i don't know. Twitter is just a mess.

Speaker 2: 17:35

Twitter mark removed the tweet button from your profile page. So if you go to your profile page and you want to send out a tweet, you can't remove the functionality. You now have to click on the Twitter icon To go to another page to send out a tweet see, i swear that you are, that you have a different version than I do I've got.

Speaker 3: 17:57

Are you on the phone or desktop Desktop.

Speaker 2: 18:00

I mean I do? I do use it on the phone, but yeah, i haven't checked on the phone because I don't send out any tweets, but I checked on the desktop because I remember you commenting about.

Speaker 3: 18:09

about that I thought really yeah. I've got it, but.

Speaker 2: 18:16

Someone else. So that's an interesting distribution deal, though. Apple, apple did there and obviously not the first, you see no. Yeah but but always interesting to see how platforms are being used. Here's another one. So this is. I couldn't believe this. When I saw this today, i just happened to check what the prime deal days are coming up. Yeah, and Amazon. Amazon's gonna be offering their 43 inch omni series 4k UHD TV, so this is the new one they've recently announced for 99 dollars 99 dollars. I know it apps.

Speaker 3: 18:51

It's a smart TV, has a spell. Oh yeah too Yeah.

Speaker 2: 18:54

Now Here's the thing It is limited quantities.

Speaker 3: 18:57

Okay, so they have a hundred to sell. Yeah, I don't know.

Speaker 2: 19:01

It's limited and you have to get an email invite but you sign up, say you want to get it. It's limited quantity but even if it's whatever amount, it is $100 at a box for their newest TV at 43 inch. That's all. It's not like it's a 32 inch, so ridiculous. Also, fire TV 4k sticks are on sale for $23. Yeah, the max sticks are on sale for $25. Now There's a. You can only purchase three at a time. But what I've learned and the way around this is, if you wait five or six days and then you go to purchase them again, they'll show you the full price. Put it in your cart, put save for later, then go back into your cart to purchase them and it takes the prime day discount off Because I want to purchase like ten of these. I give them away for thank-yous and all kinds of things when I travel, and So I was able to get nine of them by doing that.

Speaker 2: 19:57

At the $23 price range.

Speaker 3: 20:00

Dan has the e-commerce hacks.

Speaker 2: 20:02

Yeah, well, let's not say hacks, Frank, but Yeah the work around.

Speaker 2: 20:08

Yeah, it got in how to work the system. That's right. Another quick thing here Peloton has rolled out of what they're calling a large-scale beta test whatever that means, us only and is allowing users to stream videos through a Peloton hardware device Mm-hmm. So if you want to know what this looks like, look at my LinkedIn or Twitter. I by link to a Pelton user Who uploaded a video of the interface to YouTube. So members included in the beta test group are now getting a new entertainment option in the more tab on their screen. Right now, only prime video and YouTube TV are included in the test, but, mark, it was really interesting that someone else posted a video later on saying when they initially went to try it, there was about a dozen other Companies listed with their apps, but not Netflix. I Thought that was interesting. So don't know why. I don't know what's going on there, but it sounds like This is going to be coming out to users fairly soon.

Speaker 3: 21:12

Yeah.

Speaker 2: 21:13

Before too long, hopefully. So couple other things here. Let's go back to Twitter. Twitter, so Twitter's new CEO says that Twitter's looking to launch a full screen sound on video ad format that Will be shown to users scrolling through Twitter's new short video feeds. Why would I want that? That sounds like a horrible format. It's going to be full screen sound on. That's just terrible. I can't imagine what that experience is going to be like.

Speaker 3: 21:53

Yeah, let's see Full screen sound on Scrolling through Twitter's new short video feeds. So right, what does that mean? So I'm watching a short video and then in between you know the one, I just the one that finished in the next one It shows me an ad.

Speaker 1: 22:11

I guess full screen sound on Yeah.

Speaker 2: 22:15

So they didn't say when they're launching that, they just said they're looking to. They also talked a little bit about They need to get celebrities back on the platform and some other nonsense like that Interesting timing. They talk about it Obviously when when threads just launched. Yeah, so Threads mark. I finally got on threads 24 hours.

Speaker 3: 22:36

Okay, about 20, i haven't even bothered I.

Speaker 2: 22:40

Could not sign up for an Instagram account, a new one and I kept getting the error. You know there's an error signing up. Police. Try again later. Oh, others on, when I posted to LinkedIn son, they were getting the same problem. I was today able to create a second Instagram account professionally under my name For threads, because then it links to your Instagram account. Yeah, so I am on threads streaming Dan Rayburn Not that I am really doing anything with it, but I'm on there to look at it. Today was announced that 70 million users have signed up And of course, the media is running wild with that. But yeah, how many people like me signed up, made their names or someone Was grab it and then that's it.

Speaker 3: 23:28

Yeah, yeah, pretty much every, every company that you know, that I know, has grabbed their pay. You know, grab their profile page when I was called and you know.

Speaker 2: 23:36

But so what's the engagement there? Yeah, but interesting, interesting timing with what Twitter's talking about. Two other pieces here. Mark Vimeo CEO will resign from the company in September 1st That was announced. Vimeo's board member Adam Gross is gonna step in his interim CEN while the company looks for a permanent replacement. Stock was down 8% on the news as of Thursday July 6. Closing stock is down 94% since the IPO, so this was only a matter of time. We've covered Vimeo quite a lot on the podcast over the last year and a half.

Speaker 2: 24:15

Yeah yeah, you can't keep management at the top. It's just too many things did not go well, we're not planned right, we're not executed on, we're not properly prepared for, we're not executed properly going IPO, raising money at the valuation They did and cheese I can make a long list two rounds of layoffs. So, frankly, you know I put the blame on on the board and the parent company, right there. They're the ones that that should have prepped Vimeo better from a company standpoint, from a management standpoint, raising money, and they didn't. And as a result, you know we still have more, more change overcoming. So I I heard from a handful of Vimeo employees yesterday. I won't go into that, but You know, bottom line is there's gonna have to be a change of strategy at the company.

Speaker 3: 25:11

Yeah, the way they're currently operating just.

Speaker 2: 25:13

It can't continue.

Speaker 3: 25:14

What's? what's the mood inside the company?

Speaker 2: 25:18

I won't comment on that mark, because if I'm talking to six or seven people Yeah, i don't know that that represents sure a thousand employees or however many they have, it's more than a couple hundred, so I won't comment on that. But obviously there's been a lot of changes. The president recently stepped away. That's right. They've brought in multiple new executives. They changed focus a bit in terms of how they were selling, going to the seat license. They recently rolled out that AI tool for editing videos. The business is still all over the place. It's not very clear. There's no real focus when you're offering a free service but then you're also saying you're an enterprise company. Which one are you?

Speaker 3: 26:03

Yeah, If you go to the website, they're really featuring their new virtual event solution, which I found interesting, I guess because I don't think of them as a virtual event company.

Speaker 2: 26:20

True, but that's where they want to pin it to, because they want to sell it as a seat license.

Speaker 3: 26:24

Yeah, of course It's also about grabbing. If you go into a corporate marketing and you can sell this, hey, you can host your corporate events, you can host your customer events, you can and distribute videos either on your website or internal. Trying to be a soup to nuts video platform, I get that, But it's just sort of confusing.

Speaker 2: 26:59

Yeah the whole strategy is confusing.

Speaker 2: 27:03

The whole product pitch is confusing. You want to go into an enterprise. You want to sell a seat license, but you also want a free platform. Then you also want to charge $10 a month if you want more features. You want to be in the live business. Now you're in the editing business. It is confusing and the strategy has been all over. Keep in mind they also acquired a lot of companies, so they tried to do different things with the technology to build products. So whoever comes in as the new CEO needs to completely change the go to market focus of this company to your point mark. What are you good at? What is your specialty? You're trying to be everything to everybody. That's not going to work.

Speaker 3: 27:39

No, no, so focus is key.

Speaker 2: 27:42

We've seen that, so interested to see who they bring in.

Speaker 3: 27:45

Yeah, it will be. You know it'll be interesting. They go after somebody who is, let's say, from the video space in some way, you know, in other words, a video person in quotes, whatever that means. That's a wide range. Or do they bring in just a super adept operator? You know somebody who's you know, i don't know, could be from an absolutely completely different industry.

Speaker 2: 28:10

The problem is they do.

Speaker 3: 28:13

But they're you know.

Speaker 2: 28:14

so They need a product expertise.

Speaker 3: 28:16

Yeah, you need well, well, exactly, unless you get an operator who's really astute and understands that and then understands that they have to build the team and bring in the appropriate people. who can? you know? it'll be interesting to watch, for sure.

Speaker 2: 28:32

Yes, operator would be okay to your point, if they brought in experts and product Yeah, who understood the market and how to sell it and how to package and price it, then yes, but if I think they would do better bringing someone with some video expertise. The problem we see, mark, is you know, many times you see a CEO brought in from a different industry who just sold some sort of SaaS product, exactly, and they're like well, we're trying to move to a SaaS seat license, so if we get, someone needs to sell database software that's a good fit.

Speaker 1: 29:00

It's like guys.

Speaker 2: 29:02

They don't know the product or the competitive landscape or the pricing or how should be priced or margins on it. So I hope they don't do that. I hope it's somebody who has some experience in the video realm.

Speaker 3: 29:11

Yeah, yeah, i mean, dan, when I saw the news and I was poking around the Vimeo website and then I thought, you know, I wonder what BrightCode was doing these days, you know, in terms of how they're marketing themselves, presenting And they have. Really I don't know exactly when all these changes went into effect, but I mean their website has radically changed from like a year ago, and I would say a year ago, certainly a year and a half ago, their website was confusing, like what are you? Are you a marketing video platform? Are you? you know, it's very confusing. You know we're not going to jump on and make this about BrightCode, but a couple of things I really liked is that they have incorporated is.

Speaker 3: 29:59

You know, at the very top the navigation is like it starts with I am, and if you click that, you know it's like I am a CMO, i am a CTO and a media company, i'm a director of marketing And even though, honestly, some of these I think are kind of redundant, when you click on them, i think some are better than others. The intent is good. It's kind of like hey, brightcode, we do a lot. And so I'm here and I'm trying to figure out. You know, can you help me or can you, you know, meet a need that I have? Well, if I'm a CMO, i'm going to click on that And if I tell that story, well, you know, i'm able to differentiate, and then I'm able to tell a story for a CTO.

Speaker 3: 30:39

And then they have another one. I want to And it's like what do you want to do? Like they have increased marketing impact, you know, turn video data into actions. Live stream like a pro. Again, we can debate whether these are, you know, the right. I want tos. But it's interesting, you click on one like live stream, like a pro, and there's a story there. You know it kind of.

Speaker 2: 31:03

And to your point, what you said earlier. The reason for that is just because of how much some of these companies like Break Cove and Femio do Exactly, and Dave even realized to your point hey, this is kind of confusing.

Speaker 3: 31:17

It's hard to tell the story.

Speaker 2: 31:19

So we better break it down a little bit easier when you come to our site So at least we can target based on your use case or application, vertical or who you are inside the company. I don't mind that. I think they're trying to make it easier for a company to buy the solution. The problem is even with break. It's. well, you use our platform for marketing reason. No user. for branding reason. No user for corporate communications No, it's for driving revenue from OTT. Well, wait a minute.

Speaker 1: 31:44

No, it's for live streams.

Speaker 2: 31:46

Well, no, you should do something around data because they bought that company. No, they're still promoting transcoding from the Zencoder. So it's like, yeah, it's, it's still too much. But I think your point is valid in terms of how break over, in particular, is breaking out. Let's make it easy for the customers possible when we come there So we can tell them we do all this stuff. If you can first tell me what you want to accomplish, we will narrow you down.

Speaker 3: 32:14

Yeah, exactly, And we can give you a better sense of how you would use our solution and what we can do for you.

Speaker 2: 32:20

You know so, Yeah, And I think it's. I think that's a good thing. that downside to that, too, though, is You know, CTO has a lot of different things that are responsible for the company. Yeah, that's right. You know this idea that they're only responsible for one particular thing. that's just not the case. So it is a valid point, though it just goes to show how many different products and services a lot of these companies are offering, which makes it difficult to go to market, And the reason they're offering a mark is the core market they're in. it's not growing fast enough, it's not big enough, And we know that because these are public companies. look at their revenue. So what do they do? They branch out. They're trying to figure out a way to grow revenue based on adjusting their product line, but at some point it's too much of a shotgun approach.

Speaker 3: 33:11

And this leads right into our next subject, our next news update.

Speaker 2: 33:18

Microsoft Azure Media Services. So Microsoft has announced it will shut down Azure Media Services on June 30th of next year. It's going to completely exit the video workflow business. Frankly, i like this mark. I like companies that focus. I like companies that say here's our core strength, let's not focus on things that are not our core strength. This comes as no surprise to me. I saw in March of last year I started noticing on the Azure page that a lot of links were broken. Images were broken. Their CTO for Azure Media Services was let go. I talked to the company at the time about what they were doing internally to restructure. So we're over a year now. Those links are still broken. Those images still don't work. So clearly there wasn't priority in that. But the bottom line is that Microsoft revenue for Azure Media Services was never large enough to continue for them to justify that investment. It never had to go to market strategy, mark. I would see them in maybe 1% of RFPs. I don't know how often you saw them. They were almost never in RFPs ever.

Speaker 3: 34:38

Yeah, what I saw more than anything was third party solutions that were built on Azure, and so sometimes a reference was oh, we've decided to go with Azure. But in reality, it was either something the company was building They were just choosing to run it on the Azure public cloud, or but in terms of Azure Media Services, you are correct. Now, look, they are Microsoft and I can imagine that there probably are some pretty serious customers who are, or were, but probably still are, running on AMS. But, yeah, the focus is good And I wonder if this has to do with open AI and all the investment, or if this was just inevitable and it's just great timing with open AI, because they're clearly pivoting to something that's incredibly lucrative with all the open AI stuff.

Speaker 2: 35:41

Yeah, i don't know that it ties in to AI. Honestly, azure Media Services kind of just been hate to say the word dead, but just it's just been sitting there for a while. There hasn't been a lot of investment put into it. I can't remember the last time they did a product update where it was actual new product features, not just like, oh, we fine tune something. Yeah, internally, you just you knew they weren't really putting a lot of efforts behind it And, to your point, they always took a different approach over Amazon. In that Azure Media Services really built a partner ecosystem. They wanted others to build best of breed encoding, ingestion, packaging, protection, delivery, you know. All of that on top of it.

Speaker 3: 36:22

Yeah, that's really what they want, yeah because they do have some big media companies that are running at least portions of their workflow in Azure. So you know, by all rights, i mean, they are significant in the industry. But you know what your point is. If we think about AWS and AWS Elemental, which would be the obvious comparison, you know, elemental seems to have far more investment.

Speaker 2: 36:51

Oh, not just investment, but functionality. Scale what they do. That's what I mean by.

Speaker 2: 36:55

Amazon went out to your point, elemental. You know they wanted to own that market. They went out and bought one of the best companies at the time for additional technology And also they wanted people to use an AWS platform, whereas Microsoft took the approach of, like, well, you can use other partners who are on our platform. So they always relied on that third party ecosystem. And they're saying now for customers that still need packaging, transcoding and whatnot, they're recommending harmonic media. Kind bit moving, ravener. So those vendors are ready to go. Those vendors have already pushed out sort of their own information as well for customers. Hey, if you need to transfer over, here's how we're going to make it easy for you.

Speaker 2: 37:38

Now, on the delivery side, it's been almost 10 years that Microsoft announced a deal with. Back in the days It was a Verizon's HCAS network, which is now a Geo deal still in place. They added Akamai years later as a second CDM partner. But this past March they announced that they're shutting down Akamai on Azure. So they announced that they're shutting down what they call Azure CDM standard on Akamai. So it leaves EGO as the only standalone CDM partner. Some might think that's a big deal. Without going into details, it's not. There's no revenue impact here for Akamai. Microsoft was never pushing a lot of traffic to either Verizon slash HCAS, slash EGO or Akamai. Yeah, if you're a large consumer of CDM services, why would you go to Microsoft, who's then just reselling?

Speaker 2: 38:33

a third party, just go right to the third party. Sure, there's not a lot of value there, so there was not a lot of traffic there. And also Azure has their new front door what they're calling front door which is their new CDM service, so they're also pushing users to there. But front door is really also only taking on customers that also need a lot of additional cloud services not tied to video, security, devops and other things, so they're bundling it all together. It's more of a package. They don't want one off live events. They don't want customers who are just pushing a huge amount of video traffic and nothing else for front door.

Speaker 2: 39:11

It's not the customers are taking on, so not really surprising to me or anyone who tracks them. Again, i think it's a good when vendor cuts services. It's just not a focus, yeah, and because they haven't been putting a lot of time into the products and services and certainly it's not on par with AWS. It's not a knock to the Azure Media Services Group, but I think every single person who works over there would say they're not even close To what Amazon does in the media services side. From a platform standpoint, functionality standpoint, what they're tied into the custom work they do It's pretty incredible.

Speaker 3: 39:48

Yeah, yeah, yeah, there's one. there's a couple of interesting things in the release is you mentioned the recommended partners. They did separate them out and kind of two tiers. you know they separate out harmonic and media kind, as you know, really the preferred or the recommended. and then they absolutely mentioned bit moving and Ravner and there also was a system integrator that I believe was referenced or maybe somewhere in the.

Speaker 2: 40:20

you know some of the Yeah, there was a couple others that were very specific, and they're basically you know, if you look them up, they're system integrators.

Speaker 3: 40:28

They're. You know they're helping. You know people build and migrate to and move to Azure. You know so.

Speaker 2: 40:37

Yeah, and it's primarily, if we think of the video stack and workflow. It's primarily packaging. Yes, yeah, protection, transcoding. It's not really ingestion. Yeah, Certainly not for live. It's not delivery. That that's separate.

Speaker 1: 40:51

Yeah.

Speaker 2: 40:52

There's not also the media player? they're shutting that down. That's right, they're shutting down as well. But who is using Azure media player? I don't know. The single company? Yeah, yeah, so Yeah, And that's interesting.

Speaker 3: 41:08

It's not a big impact because harmonic media kind of bit moving, all have players, you know, so they all have their own players. And media kind of harmonic, you know both have very well established packaging solutions And you know they're, you know, even I would say more so than bit moving because they're just focused more on the media and entertainment workflows versus kind of apps and, you know, browser based like bit moving. But yeah, this is an interesting move And I think, as you said or implied, for some it's no surprise. You know, I can imagine there's probably some customers of AMS who maybe were shocked, maybe even a little worried, because it's, you know, you always panic when your vendor announces they're getting out of the, out of the business that you use them for.

Speaker 2: 41:55

But I was surprised, mark, how many people in the industry didn't know what was going on or were surprised by the news. And maybe I shouldn't be surprised by that. But to give you an idea, one more recording this right now. So I posted to LinkedIn the write up I did 19 hours ago. Yeah, in 19 hours it's gotten 21,797 views. Wow, with 24 reposts. And then I got a bunch of just personal messages today on LinkedIn with people asking questions not customers, but more industry people. So I was like, wow, on a Friday, the week of July 4th, when a lot of people were away, i was surprised at just how many people were picking up on it and were surprised by it. Didn't know about it, didn't really know what Azure Media Services was working on, hadn't really looked at the company recently. But yeah, that's how many impressions. Obviously we don't know exactly what that means on LinkedIn, but that's how many impressions it's gotten in 19 hours Still.

Speaker 3: 42:59

I mean, i'm pretty active on LinkedIn and I don't think I've ever had a post get 21,000. In fact, i know I have it 21,000 impressions, brilliant 21,000.

Speaker 2: 43:08

Do you know what the number one post is that I wrote about Think?

Speaker 3: 43:13

about what it is. You told me one time and I can't remember. So when you say it, you know.

Speaker 2: 43:18

It was, and I don't usually ever post on this, but there was something about a year and a half two years ago. Someone near time someone wrote an article about how you know, if companies really want to treat employees better, they better give us more than four weeks of vacation and they better bring back free lunches and all this stuff. I just posted, like what are you crazy? That's not good for the business. And now I work for myself, like it's not like someone's giving me a vacation. But I listed just here's all the things Google and others are already giving employees, and it was over 200,000 impressions in such a short period of time and I couldn't believe how many people were leaving comments. That's something I almost never post about because it's not really tied to the streaming industry, but yeah, it was incredible just to see the questions that came out as a result.

Speaker 2: 44:17

So, mark, we're out of time here. Let's just go through what we're going to cover next week. So we're going to skip a week here as I'm traveling, but we are going to record the week of July 17th and we are going to have Netflix earnings Yes, that week. So we will break down Netflix earnings on the next podcast. Hopefully we have something to break down. I'd be shocked if we didn't get some good data from them on the last week.

Speaker 3: 44:43

Sharon, I think it's going to be an interesting one.

Speaker 2: 44:47

I think it is too. I think we're going to have to have something in the past we're sharing. Too much is being talked about. I think we're going to have more on the AVOD service. We're definitely going to see what potential impact is with ARPU. That's another one that we're going to keep a close eye on.

Speaker 2: 45:02

Also, for those that don't know, early in the year Netflix projected free cash flow positive free cash flow of $3 billion. They've since said they think it will be at least that's their quote $3.5 billion. So does that number go up even further potentially? Yeah, something to keep an eye on. It's going up by half a billion dollar estimate in half a year. So the next podcast we record, we'll make sure to drop that one really quick right after the earnings get that out, but that's going to be interesting. Then, mark, we go into earning season already. Week after that is Meta Comcast, and then right after that we've got quite a few with first week in August we've got Disney, paramount and some of the big content guys as well. So a lot more data on the way.

Speaker 2: 45:53

Yes, good, so in the meantime, anyone has any questions, reach out to Mark and I in LinkedIn. Everything we talked about today is already up on LinkedIn. It's already there as far as the numbers, the data, the links, so it's streamed. At blogcom, i did publish a longer piece on the Microsoft Azure Media Services shutdown, so if you want to see a little bit of background there, it also included some links so you could see a little bit of the history of the service as well. But any questions reach out to Mark and I. We appreciate you guys listening. Talk to you next week on the show. Everyone have a good week, good weekend. Well, by the time you're listening to this, i guess July 4th weekend is over. But hopefully everyone had a good weekend, safe weekend. Don't blow yourself up. Yeah, be careful with fireworks, but have a good time. We'll talk to you next week.

Speaker 1: 46:38

If you enjoyed the show, send it to a friend. Have questions for Dan or Mark? Keep them on LinkedIn at any time, and be sure to check out Dan's blog at streamingmediablogcom.