Episode 66: Analyzing Disney's Financials; Max to Add Higher Priced Sports Tier; Sling TV Loses Subs; NFL+ Price Increase

Speaker 2: 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 1: 0:20

Welcome to the Dan Rayburn podcast. I am Dan Rayburn, long co-host, mark Donaghan. Mark, hello you, ready to go through earnings?

Speaker 3: 0:26

I am ready, Dan let's do it.

Speaker 1: 0:28

We got a lot Actually not too many. We've got Disney, we've got Paramount, we've got Fox Dish Network for Sling Vizio. Actually we only have five. But then we have some other news around, some streaming services, nfl Plus and some others. Let's jump right into Disney. There's a lot here. There's a lot from Disney.

Speaker 1: 0:49

The Wall Street call that the management team did was fairly interesting because they did talk a little more in detail about some of the business lines. But just let's go through the numbers to start. They had direct consumer revenue of $5.5 billion. That was up 9% from Q2, but the business lost $512 million, still losing a lot of money. No surprise, they've already said that DTC won't get pre-cash flow positive until the end of fiscal 2024, so they still have some quarters. Their loss was $512, which is down from $659 in Q2. They made some progress there. No doubt part of that's from the layoffs. They lost 300,000 Disney Plus subscribers in US and Canada, but they gained 800,000 Disney Plus subs overall. They announced on the earnings call that they have 3.3 million AVOD subs. Their advertising plan is 3.3 million subs and they say 40% of new members choose the advertising plan. It's offered Interesting stat mark because Netflix told us where they offered it, it was at least 25% of people taking it.

Speaker 1: 2:11

Disney Plus hot star lost 12.5 million subs, which that's a big number but really doesn't surprise anyone, being that they lost IPL in the cricket streaming. Espn plus lost 100,000 subs to end with 25.2 million total subs. Hulu SFOD added 300,000 subs, but Live lost 100,000. So total Hulu subs are 48.3 million. So I don't think any of the numbers were too surprising. The loss of 300,000 Disney Plus subs in US, canada it's not something Wall Street wanted to see for sure.

Speaker 1: 2:52

On top of that, disney also announced price raises, but only for the ad free plans in Hulu plus Live TV. So Hulu plus Live TV is going to go from $70 a year to $77 a year. As we've talked about many times in the podcast, live linear streaming is expensive. Yes, it is Not getting cheaper. Ad free Hulu will go from $15 to $18. Espn plus is going from $10 to $11 or $110 for the year and they're going to also offer a new ad free bundle of Disney Plus in Hulu which will be launched at $20 a month. Hulu Disney Plus ad free subscriptions will go up to $140 a month and all pricing goes into effect October 12th. So interesting what they talked about regarding how much they are working towards getting to profitability.

Speaker 1: 3:58

I don't think that was a surprise. One thing they did bring up that it was only a matter of time was they announced they're going to crack down on password sharing next year. Yeah, I don't think that surprises anyone who tracks the market. Now they were asked a very direct question of what percentage of households or how many members are sharing accounts. Ceo would not say, but it did say quote it's significant. Not sure what that means exactly, but they did say that they expect subscriber growth to come back to Disney Plus later in the year.

Speaker 1: 4:33

And then finally, mark, you and I always love talking to our pool, of course, yes, so our pool was pretty much flat. Espn plus dropped by like 10 cents, so that wasn't much. Hulu, the S-FOD, only went up by just a little bit. No real big changes here. Our pool internationally for Disney Plus was $6.01. A quarter before it was $5.93. So only a change of 8 cents. So not a big change on the ARPU as of yet. And most of that, they said, is just due to lower per subscriber advertising revenue based on the ad market, and we've seen that. Sure, just a higher mix of subscribers taking a multi-product offering bundle. So no surprise on that either. So that's Disney's business right now. Other thing to cover is they were very I wouldn't say detailed, but they were very open on the calls, just in terms of continuing to say that they're looking at different strategic options for the linear TV business. Yeah, espn ABC. So they were asked directly you know, is Apple going to buy you?

Speaker 3: 5:53

which was pretty silly, because that's the latest speculation I have seen.

Speaker 1: 5:56

Yeah, it's an awesome Any articles.

Speaker 3: 5:58

you know the CEO can't make a comment on that.

Speaker 1: 6:01

Yeah, exactly, yeah. So he basically said look, we don't worry about that stuff. People can go speculate all day long. Yeah, now I've seen a lot of people talk about Apple needs to buy Disney and the problem I have is they never discuss why. Yeah, so Disney stock, you know, is not doing that bad. People always say, well, disney stock is not what it was, you know, five years ago. Well, yeah, but the industry wasn't the same five years ago. Yeah, exactly, disney Plus was around five years ago. Yeah, so, year to date, walt Disney stock is not down. It's actually up only about 1%, so that's not bad.

Speaker 1: 6:41

So this idea that they need to sell because they're struggling financially, they're not from a stock price standpoint. Once they get the profitability, that's obviously going to help the stock price. They cut 7,000 people. They took a charge as a result of that, but that's already helping the balance sheet. They're cutting the loss of D to C. That's positive. Well, they're raising pricing on packages. So unless they see a big subscriber backlash and churn, it's going to be more profitable with higher ARPU. So they have a path here.

Speaker 1: 7:12

But when I'm reading in the news Mark, here's one that said Disney has struggled to pivot to a streaming forward media strategy. Really, if you combine their direct-to-consumer streaming customers in the market, they are number two worldwide behind Netflix. Yeah, they've pivoted very well. Now ESPN what are they going to do? How are they going to handle that? Yeah, they'd be seen. The other thing I'm seeing is the argument that some are saying is Apple would get access to all the sports available on ESPN and Apple is really looking to build its sports streaming portfolio. It says who yeah, apple's made it very clear and they actually talked about this publicly, mark, recently at a sports conference I forget which one it was where they said they are interested in deals that are similar to MLS Sure, where they have the rights to stream every match, no blackout restrictions. Yeah, it's a very unique opportunity with the content and the licensing. That's the key. They don't get that with ESPN.

Speaker 3: 8:22

No, or with almost any other league, right, I mean, it makes sense too, because Apple is so customer-centric and user-centric. Look, at the end of the day, we can all agree that the way that rights get carved up and it just is what it is, we can say, well, that's not how it should be, but it's that way. You have blackouts, you have restrictions, you have based on geography and other factors in market. Now to market and all this stuff, that fragmentation, it's just there. If Apple is trying to make it so that anybody anywhere or within reason, anywhere, is able to view a game or view a stream, well, they're going to be limited in what they can go after, right, extremely limited.

Speaker 1: 9:22

The other thing. I don't know, mark. Maybe you've heard about details on this or can confirm it. One of the things that's coming from people in the industry is the licensing contracts that ESPN has for the sports content are not transferable.

Speaker 3: 9:36

Yeah, yeah, I can't comment because I really don't have the exact knowledge whether that's true or not, but in general that is one of the things just in licensing content that it really gets is whenever someone says, well, company A can buy company B because company B has these rights and they'll just be this major coup, it's worth it. No, those agreements always have very carefully crafted clauses essentially to eliminate it, because otherwise, hey, if you're licensing content and for some reason the company you're licensing to so I own rights, I license the company A, company A, for whatever reason, their stock value drops by 80%. Well, all of a sudden company C can swoop in and buy it. And then here I am going well, shoot, now I want to negotiate with company C. So of course they have very carefully worded and crafted and I've been a part on the VOD side of the business and I've seen these agreements, and in the early, early days.

Speaker 3: 10:53

And let me tell you they're not just transferable. That's what everybody's saying. Yeah, that's what I was saying. So I can imagine I would just be shocked that that's the case where you could just buy a company and, voila, I now inherit all of this right. It doesn't work that way.

Speaker 1: 11:12

Also, disney CEO said on the call. He specifically pointed out look, people can speculate, yeah To Apple or whoever buying us, but you should also look at the regulatory issues that cause. Yes, he didn't come out and say it's impossible, but he made it very clear Like you better go look at that headache we would have. So, yeah, that's all we have on that. We'll see what they do with ESPN and ABC. Let's move on to Paramount. Paramount Plus added 700,000 subs to reach 61 million. Dtc revenue was 1.66 billion, of which advertising made up 441 million. But here's another one their direct consumer loss was 434 million, which is down from a loss of 511 of Q1 of this year. They did say that their quote DTC business remains on track to drive significant earnings of improvement in 2024. But this time they didn't give out any estimate. When they project free cash flow from the DTC business, they did, earlier in the year, say they expect to lose about $2 billion this year on DTC, which, interestingly enough, is the same number that Comcast gave out for Peacock.

Speaker 3: 12:23

Yeah, I mean, we've pointed this out.

Speaker 1: 12:26

Still a loss. So Disney, Paramount, Peacock, they're doing better, they're on the road to profitability, but they still need to continue to execute. Another one here Fox gave out some earnings and I was hoping maybe to get something regarding Tubi's business, but here's all they said. Quote fourth quarter was the most impressive of all. Fiscal 2023 was nothing short of spectacular and Tubi increased its viewership in fiscal 2023 by 79%. That's all we got. So why was it impressive, Don't know.

Speaker 3: 13:04

Yeah, I found that really, really weird when you only give out a percentage 79% if that number is based off 50 million subscribers wow, yeah, that's amazing, right, but if it's based off a million and a half, I know it's more than that.

Speaker 1: 13:24

But I thought the number was interesting when they said it increased its viewership by 79%. Yeah, yeah, yeah. They didn't say members, they didn't say engagement.

Speaker 3: 13:33

That is correct and viewership could be. And again we're speculating. But just to point out how this is pretty nebulous. Okay, so we did not gain any subscribers, but the subscribers we have are watching 79% more time. Their viewing time increase. And when you say viewership, that kind of implies eyeballs on screen, which doesn't mean net new eyeballs, right.

Speaker 1: 14:03

Or anyway, higher advertising dollars. So we have no information. Not surprisingly, rarely give out any information. Every once in a while they give out one big one number that just says to be. These advertising revenue will be, or we expect it to grow to over time, but that's all we get. So why it was impressive? Was it because of higher CPMs? I doubt it. No one else is getting that. Was it more net new people watching to your point? Was it something financially? We just don't know. So nothing there, unfortunately, but not surprising.

Speaker 1: 14:35

Going on the dish Wow. So Sling TV lost 97,000 subs and they ended the quarter with 2 million subscribers left for Sling TV. That's it, wow, combined with Dish, dish and Sling TV lost 294,000 pay TV subs in the quarter. Now Sling did recently launch a new fast option called Sling Freestream. But ad revenue alone won't be enough to move the needle. So I just wonder, mark, at what point does Dish wonder? Do we continue to be in the business of offering an S-VOD service when we've got 2 million subs and it's continuing to decline? Don't know. What we don't know here either is what is the impact that potentially that Sling TV could have on the pay TV side of the business. Does it somehow impact that in a positive way? We don't know. They don't break out any revenue or cost specific to Sling TV, but 2 million subs, that's it.

Speaker 3: 15:39

I thought I saw and I'm actually doing a search here, of course the Dish Direct TV merger drumbeat has been going on for a while, I think back in June, so start of the summer, so a couple of months ago. It was sort of like, ah, the talk's kind of petered out, but have you heard anything? Is there any new? Yeah, the last thing I heard.

Speaker 1: 16:10

It's got a bud. No, you're right. It was about June when it was reported that they just the talk's kind of fizzled. I didn't hear anything since then.

Speaker 3: 16:22

Yeah, I picked up a couple articles, which the problem too is with some of this stuff like a journalist kind of picks up a thread from two months ago, writes, slaps a new headline on it and kind of quote, revives it, but in reality the news was two months old. Yeah, it was a couple of months Now.

Speaker 1: 16:42

We did mark three days ago Dish Network is going to merger the Echo Star, so we have that, but that's combining satellite and broadband Exactly. So I don't know if that then keeps the other merger from happening. But yeah, no good point. I remember that now that you say that from a few months ago, but have not heard anything new since then. Yeah, exactly.

Speaker 3: 17:03

And again, speaking of regulatory, I don't know. That would effectively mean there's only one satellite provider in the US for your entertainment services, maybe so? And yet the argument could very well be well, does it matter anymore if consumers are abandoning pay TV, like, okay, there is a need for satellite service, I'm sure someone in the government would still object to it.

Speaker 1: 17:35

Oh yeah, of course, of course.

Speaker 2: 17:37

They keep their jobs really.

Speaker 1: 17:39

But yeah, I haven't seen anything on that, so interesting just to watch the TV over the next couple quarters because they drop below 2 million and it's just like wow, yeah, yeah. Let's move on to Visio. Visio had their earnings and their platform plus, as they call it, net revenue at 142.3 million that they pulled in. It's up 28% you over a year. Arpu was $30.55. Now it's trailing 12 months. Yeah, it's not every month, yeah, yeah, the Smartcast active accounts of 17.6 million. The average Smartcast person is streaming 94 hours per month, so a little over three hours per day. The problem that Visio has here, mark, is that their Smartcast active accounts the growth has really been slowing. So they're going to have to look at some more strategic options over time and I think they're going to have to take their A-VOD service to other locations besides just their own TVs.

Speaker 3: 18:41

Yeah, and I'm a Visio user and I know you. How many TVs do you have in your house, dan?

Speaker 1: 18:48

A lot 10, I think yeah, exactly, but that's why I wouldn't normally have 10 if I was in this industry. No, no, no Five.

Speaker 3: 18:55

Yeah, of course, of course. But I'm assuming that you have some Visio panels in your house.

Speaker 1: 19:00

Yeah, M-Series, P-Series.

Speaker 3: 19:02

Yeah, yeah, yeah, so, yeah. So, let's see, I think I've got the M, anyway, and I've got multiple Visios around my house. One of the observations just as a user purely as a user like if I wasn't in the industry and I thought about it, I'd make the exact same comment the way the user interface is set up and the way that you access the apps, I wonder how much is people are. It's not clear where the free services are and where the aggregation points are and where the apps, because now I know about the differences and I navigate, I know exactly what app I want to go to. We're going through Yellowstone right now, so it's like I just boom, I go right to Peacock, which, by the way, yellowstone's amazing. Did you watch it?

Speaker 1: 20:00

Dan, no, I never got in Yellowstone. I can't take Kevin Costner oh really Okay, well, all right.

Speaker 3: 20:06

It's not my thing, okay, all right. Well, teach their own, but not that I'm a Costner.

Speaker 1: 20:13

I'll tell you what I'm watching, though. We used to do this early on, when we started the podcast. We talked about what we were liking Special Apps, linus so that's Effects that's on my list Justified. City Primeval. Oh, okay, that's another FX show. Okay, no Special Apps. Linus may not be FX, but Justified is Dark Wings is back Special.

Speaker 3: 20:36

Apps Linus. What is it?

Speaker 1: 20:40

It's another Taylor Sheridan, of course, like everything else it seems these days. And then I'd say Hard Knocks. Only because it's near Jets this season, which is pretty interesting, part of Stone came out today on Netflix. Yep, yep, that looks really good. It's not getting great reviews. Oh, it's not. No, it's not as of yet. Huh. So that's a couple of things I'm looking at and then just prepping for Wow, what is it? August 11th today? So the first YouTube TV NFL Sunday ticket game is September 10th. That's right, so we are less than one month away. So I'm just, I'm still prepping on that. Sorry, I distracted you.

Speaker 3: 21:23

No, no, no, no. But just my observation is I think Vizio needs to look at how the free channels, the smart cast, is presented, because I don't know, I feel like there might be people that don't quite understand what's free and where it is in the user interface.

Speaker 1: 21:47

Not surprising. I wonder who their demographic use base is too. If it's an older demographic, it's harder for them to find things. Yeah, I don't. I have to look at it again. I don't remember just how it compares to the others in terms of ease of use, of finding it.

Speaker 3: 22:04

Like, if it were me, I would almost. I would separate the apps, those apps that you have to subscribe to, or even, in other words, just the third party apps. I would separate those. You can still make them very easy to access and all, so it's not like hide them, but I would front and center. You go into the home screen and I mean it's all the free content and it's. I mean, they just need to really feature it in a way that it's super compelling. I want to click on that first and right now. It's just not the way it is oh, the way it's featured.

Speaker 3: 22:43

Yeah, yeah, it's just not the way it is, and so, yeah, I'm not saying that's suddenly gonna, I don't know, double or triple their revenue, but it just feels like there's user interface work that can be done on all of these platforms.

Speaker 1: 22:57

I think there are always a yes, yes, and I give Amazon credit. When they were at the NAB show Fire TV team, they were talking about yeah, that's right, it never ends.

Speaker 3: 23:05

Yeah, that's right.

Speaker 2: 23:06

What we have to do to use that it never ends.

Speaker 1: 23:07

We constantly have to update, we have to make it better, we have to collect feedback, and they were very open about that. It was a great session. Yeah, yeah, it's true. Let's jump into more. Just a couple more here. We'll close with some NFL stuff.

Speaker 1: 23:22

It's being reported that Warner Bros Discovery Plans to simulcast live MLB playoff games on max in October and basically that'll help debut a new sports tier which they're going to call Bleacher report. But they also plan to charge users more if they want to watch the sports on max. No surprise here. This was hinted during their recent earnings call when they mentioned that their sports streaming was quote such a premium offering that it needs to be monetized incrementally. So wouldn't wouldn't be surprised. This is news that leaked out. It's not yet confirmed, but it looks accurate. Games would be from Major League Baseball and BA and HL, some college ones, including March Madness, and then it also the report says they would add additional video content from Bleacher report highlights and interviews. So keep an eye on that. When they did launch max, the CEO did come out at that time and say we will have more to talk to you about regarding sports later in the year. So expect sports on max, but expect to pay more.

Speaker 1: 24:30

Now, speaking of paying more, let's jump into this one. The NFL is raising the monthly prices of their NFL plus plans. Sure, but they are adding in more content and they will now allow NFL network and NFL red zone to be viewed on TV and PC, not just mobile. So the NFL plus premium package is going up by $5 a month, from $10 to $15, but it will include NFL red zone. It's a big deal for many football fans.

Speaker 1: 24:59

The NFL plus base plan is going from $5 a month to $7 a month and both plans will now allow for viewing of live out of market preseason games on a TV and PC. Note, that's preseason games. So a lot of people taking note of that. Now, unfortunately, the same day they announced it that NFL plus will come with access to the NFL network, the NFL network stream was having technical difficulties last night, especially with the audio, and they had to switch feeds during the game, which fortunately they did to improve the audio. So they managed to switch the feed from the Seahawks to Vikings broadcast, but again, the NFL plagued with technical issues. You've seen this quite some time with NFL plus and now you're adding NFL network, and this is something a lot of fans are going to want at this price.

Speaker 3: 25:58

You've got to make this stuff work, but so that was an issue with the broadcast stream, though, right Last night.

Speaker 1: 26:06

So it was the stream online as well.

Speaker 3: 26:08

Well, no, no, but what I'm saying is the source that was coming off broadcast. So it presumed that that audio issue was whether you were streaming or you were watching on a pay TV platform. Do you know? I guess I'm asking a question. Yeah, I don't know.

Speaker 1: 26:26

I would assume yeah, lack of information that we have that it is the broadcast game, but you also had people screenshotting things of you know can't get the stream. Okay, this game is out of your market when it wasn't out of their market. So it was more than just the audio. Yeah, you raise up a good point, though. More than just the audio. Yeah, so I should point out. Yeah, so I was looking at comments coming into Twitter. I put some of them up on LinkedIn, but the NFL Plus has not had a great track record and, of course, that just that worries me, with YouTube TV having NFL Sunday ticket less than a month. Yeah, so every day, mark, I am looking, every single day, I am looking at comments on Twitter, on Reddit, where they have the YouTube TV page, the NFL Sunday ticket page. The amount of comments every single day from people with problems. There's a lot. There's a lot and there's still a ton of confusion around NFL Sunday ticket. What do you get, what don't you get? Yeah, what does it come with? Where can I share it? How does it work outside the home? Also, nfl Network with the NFL Plus, with the NFL Network Premium, you're supposed to be able to see condensed games two hours afterwards. I believe it's two hours but you have people reporting online like, hey, the game was 11 hours ago. There's still no archive. So all kinds of issues are being reported. Nothing by the NFL was pushed out to users via social that I ever saw saying like, oh, we're aware of this or that and at least with YouTube they're extremely active on the message boards. We're applying to questions. We're saying, hey, that's a good feature, we'll put that on the list, thanks for the feedback. So at least give them great credit for that. But the amount of problems people are having just with blackout restrictions not being accurate in the city that they're in just for regular YouTube TV, is huge. Now throw NFL Sunday ticket on top of that. And which game do you the right to see? Not to see what's blacked out, because the rules around that are just super complicated. So I'm just. I'm going to go back to. I'm just.

Speaker 1: 28:42

I'm concerned that the experience that many viewers will have for NFL Sunday ticket will not be what they expect. It's not going to be what they think it should be for what they paid for it and it's going to cast a negative light on the industry. So I really hoped that YouTube, google combined, is going to be proactive in terms of talking about the games. What my guess is? They don't talk about anything to begin with. But even if there's issues, we're not going to get anything from them, yeah, which isn't going to help the industry as a whole. Now, I know that's not what they're worried about. For us, it's a big deal, yeah for sure. So two more things more tied to well. Another one tied to Sunday NFL ticket is EverPass Media. They're the exclusive distributor of NFL Sunday ticket to businesses, commercial establishments, stores, restaurants. Yeah, in the US, they announced the deal with NBC Universal, where they're also going to bring live sports from peacock To these locations, including peacock's first ever exclusively live streamed NFL playoff game in January. They're also going to do 180 Premier League matches, college sports, golf in D car and quite a few other events as well. So that that news came out today press release. Pretty detailed information Is up on LinkedIn if you want to see it.

Speaker 1: 29:57

And then, finally, mark, let's go to a vendor earnings here. So Akamai had their Q2 2023 earnings Mm-hmm. Their stock was up 6% after hours. Total revenue is up 4%. Security revenue was was good. It was up 14%. Delivery revenue of 380 million was down 9%. You over here. No surprise there. Their Gapnet income was a hundred and twenty nine million.

Speaker 1: 30:21

Hmm, now, I point this out one because Akamai the great quarter, their stock is doing well, but every once in a while mark I still have people say, oh, akamai, yeah, they're not in the delivery business anymore, they shifted to security. Well, akamai did a great job many years ago diversifying the revenue stream from just being delivery to higher margin services like security, web performance. Now they're moving into compute and that's why they have such Good margins in there. They have gap net income right, the great gap net income every quarter. Yeah, not a cash in the bank, but their delivery revenue, even though it was down 9% over here, was 380 million dollars. Yeah, that's over a billion dollars a year in delivery right, delivering everyone, anyone who's wondering Akamai still the largest yeah content delivery network in the world Outside of China.

Speaker 1: 31:18

Because we don't include that, yeah? When it comes to revenue, yeah, nobody even comes close.

Speaker 3: 31:24

You know, dan, I can, I can remember I Don't know, maybe you can recall the year. I'm gonna say 2016-17, maybe 18, somewhere in there streaming media East, one of your keynotes, so somewhere in that time frame I'll say you stood up and you and you basically said look, if you are in the Delivery business and you're not, you know adding value through these additional services your business is going to be threatened, and you know I think you pointed out you know security and additional video, you know encoding services, etc. But it is interesting how Akamai is diversified so that roughly two-thirds of their revenue is coming from outside of delivery and yet the point that you're making is delivery is still one-third and that's meaningful, you know.

Speaker 1: 32:19

Yes, and they are still the largest player and they're, and they're still the largest because that's important. Yeah, that's important to point out. The other thing is, yes, it's down 9%, you over a year, but last year, year over year, some of the quarters, their delivery revenues, down 15%.

Speaker 2: 32:33

Yeah, so the rate of decline actually, yeah, slowing a little mark.

Speaker 1: 32:37

I'm working on an updated post on the CDN industry as far as market sizing, mm-hmm compound annual growth rates, competitive landscape, what I'm seeing in pricing. It's gonna be extremely long so it's taking a while, but, yeah, I'm looking at a keger compound annual growth rate this year. Yeah, of the CDN industry between one and three percent. Hmm, that's it. Yeah, if anyone says, gives you numbers that's going larger than that, well, that's not opinion-based. That's wrong. Yeah, akamai is the largest provider in the market in this quarter, down 9%.

Speaker 3: 33:10

Yeah, so I had a. I had a very interesting conversation with a Somewhat sigh I really don't know exactly how big, I'm not gonna say they're the largest, I'm sure they're not the largest, but they would be sizable customer of Akamai's, and and it was just purely a discussion around what the interest might be in considering a different CDN, you know, either as a dual strategy or and there was no said this wasn't, there was no sales pitch involved, it was just. It was just a conversation. And this customer said something super interesting that I really keyed into. They basically said look, you know, we effectively have zero appetite to switch and and it's because Akamai takes care of us, we get good pricing and at the end of the day, like, what do we get? Okay, we say 10% or some percentage. Who cares? You know they didn't put it exactly that way, but it was it. It showed that in their mind there were other areas of the, of the workflow, of their streaming Architecture that they felt they could get much better optimizations from correct right, you know, and and and I kind of walked away from that conversation.

Speaker 3: 34:26

Now, you know I'm not in the CD CDM business, although CDN is very important for you know, when you're encoding and you're You're building streaming platforms. It's very important, but it just shows. Maybe that's where this one to three percent keger is coming from. You know, it's like bit rates are going down, as you have aptly pointed out, you know, through the use of, of adopting better codex and I am very much a part of driving that that aspect. You know, and in some cases people are just saying, look, you know, we don't feel we need to deliver exactly the same level of quality. We're gonna ratchet down, you know, because at the end of the day, the consumer either doesn't notice or guess what. You know, we're just gonna reduce bit rates, you know. So, yes, traffic is increasing, but bit rates are going down, which means that overall, the network volumes are staying pretty level.

Speaker 3: 35:19

Or down, yeah, or or or even going down exactly with CDN, yeah, yeah, for CDNs. Again we're talking delivery here, you know, we're talking yeah so with it, with acima, you know acima.

Speaker 1: 35:30

You have to watch what happens with them because they do have the larger share of the market. They have the most customers, mm-hmm and, with what we're seeing in their CDM business, even called over the last eight quarters. I just compared all the numbers. Yeah, we're, we're starting to see Incrementally better traffic growth and slightly better pricing, mm-hmm in their delivery segment in particular. So even though they're Declining 9% past quarter year over year, and revenue standpoint I think that continues to get better. Yeah, but they also forecast this market Probably 18 months ago and their investor relations deck.

Speaker 1: 36:03

They said that they expected the CDM business and they gave I think it was a three-year period, said it would be 0% to negative 2. Hmm, I believe those are the numbers. I have them up on LinkedIn. So they told the industry is the largest provider. Hey, here's what's going on. Yeah, and yet the amount of reports I see, written by someone who has no name on it, who says the CDM markets growing, you know, 16 or 20 percent, is here. They're not even in the ballpark, yeah, yeah and they're also not defining CDM property, but that's all another discussion.

Speaker 1: 36:33

I'm working on another post for that.

Speaker 3: 36:35

We should definitely be interested. We should do, we should do just around CDM?

Speaker 1: 36:38

Yeah, exactly.

Speaker 3: 36:39

Yeah, when you release it, you know, I think that'd be good.

Speaker 1: 36:42

Yeah, I just need to finish it. It's it's almost all the way done, tam numbers, everything and it'll be free. I'm putting out everybody and then finally mark. Let's just do a quick little congratulations to the vision leader folks. Yeah, vision leader raised money. They don't want me to say how much, so I won't. But it's not a gigantic number, which is good. It's a good thing for them, right? Don't take too much money.

Speaker 1: 37:08

They did publicly say that it's a post money valuation of a hundred million dollars, so they're getting a good multiple in terms of what they're projecting revenue out to be. They've got a more than a hundred commercial customers launched. They're also hiring in other countries. I posted for them a job opening the half for sales, specifically in India, and I have one in the US as well. So growing the business Organically a good way to do it took a little bit of money Grow, invest that money in things that will help accelerate the business, but not too quick, not too fast, but good to see. Even in the, even in the times where Companies aren't necessarily getting some of the best multiples, I've always said companies that focus and are very good at doing One thing and a very clear at what they do and they cut deep and their specialists. They're gonna get better multiples for their business. That's right. So if I can put out the number I've asked, if I can give a range, I will. I'm working on a LinkedIn post With the news, but I'm just waiting to hear back.

Speaker 1: 38:13

But good to see, glad to see that the right companies can still get some money out there. So with that mark, let's just let's cut this here. We're actually a pretty good time here. Let me just take a look at what we have. We actually don't have any earnings next week, so that's great. So we'll get back to covering some other news in the market.

Speaker 1: 38:32

Also. Mark quick update on the NAB streaming summit in New York City in October. I'm now started confirming speakers. Netflix is gonna be doing a great presentation on encoding, building on encoding stack. I'm gonna have someone on the Fox side talking about Analytics specifically tied to engagement across not just Foxboards but to be. We've got some really good content speakers coming in. We also have some sponsors now coming in as well and contract a geo bright cove CDN 77 quilt Couple others as well currently in contract. So I expect great turnout promotion.

Speaker 1: 39:08

Obviously, with August it gets a little, gets a little slow just with everyone away, but that's really gonna start ramping up in September. So if you're listening and you want to Speak in some way sponsor what not, you want to be involved in the program or moderate, you better reach out to me pretty quickly, right after the holiday in September. This is, this is gonna close up pretty quickly. Attendees can obviously always buy a ticket on online at any time, but it's. It's looking good. So, a little closer to the show, I'll outline some more specific details on on what Presenters are gonna talk to and some of the business and technology topics we're gonna cover, and it's a two-day program, or is it one day today?

Speaker 1: 39:47

program today Okay, it'll be two days, yeah okay, over 24th and 25th yeah, it's any Wednesday, awesome. And that Tuesday We'll have a cocktail reception. Yeah, that's always at 5 pm. So, even if you don't go, if you're in the area, come by Now. I'll promote more of that, as, as we get a little bit closer, everything's looking good, sounds good. So with that, we'll thank everyone for listening. If you have any questions, reach out to mark and I in LinkedIn. Everything I talked about, other than the funding there at the end, is already up on LinkedIn. It's up on Twitter as well. Mark, I'm not as posting as much Twitter and I know we've talked about Twitter a little bit, but you mean X, yeah, x, w, y.

Speaker 3: 40:30

They say it right, dan, it's X, you're not.

Speaker 1: 40:34

To me it's Twitter Tweets you know, and they came out today, the your.

Speaker 1: 40:40

Yesterday the CEO came out and said well, you know, pretty soon You're gonna be able to do a video call on on X. Yeah, why would I use your app to do a video call? But what is the benefit of doing that? I just I don't understand. So they're talking about rolling out all these new features and in a payment system and I'm like man, there's a lot of payment systems that already work really well, that already have installed, so I don't know where that business is going. But for anyone who wants to follow, especially all the financial information to put out LinkedIn- is definitely yeah, that's a good place.

Speaker 1: 41:14

So with that, we appreciate everyone listening. Thanks for your time. Hope you have a great week. We'll mark and I'll talk to you next week.

Speaker 2: 41:22

If you enjoyed the show, send it to a friend, have questions for Dan or mark, connect with them on LinkedIn at any time and be sure to check out dance blog at streaming media blog calm.