This week, we discuss the key takeaways from Q4 earnings across OTT platforms and streaming vendors, including Apple seeing a "huge opportunity" with AI, YouTube's ad revenue growth of 15% and AWS closing out 2023 with $90.8 billion in cloud revenue. We discuss new numbers released by Amazon, which spent $18.9 billion on content in 2023, of which "approximately $7 billion" was spent on Amazon originals and live sports.
We also highlight the latest pay TV losses from Charter, nearly 1 million Xumo Stream Box's deployed, Plex's new round of funding, and Harmonic's update on the strategic review process of their video business. As Lumen officially shuts down its CDN and sells off some assets, we detail the history of its CDN business and its contribution to the industry for so many years. Finally, we discuss why 2024 is going to get a lot worse for layoffs across the video industry, streaming, pay TV, vMVPD, broadcasters, and content owners.
Podcast produced by Security Halt Media
This week, we discuss the key takeaways from Q4 earnings across OTT platforms and streaming vendors, including Apple seeing a "huge opportunity" with AI, YouTube's ad revenue growth of 15% and AWS closing out 2023 with $90.8 billion in cloud revenue. We discuss new numbers released by Amazon, which spent $18.9 billion on content in 2023, of which "approximately $7 billion" was spent on Amazon originals and live sports.
We also highlight the latest pay TV losses from Charter, nearly 1 million Xumo Stream Box's deployed, Plex's new round of funding, and Harmonic's update on the strategic review process of their video business. As Lumen officially shuts down its CDN and sells off some assets, we detail the history of its CDN business and its contribution to the industry for so many years. Finally, we discuss why 2024 is going to get a lot worse for layoffs across the video industry, streaming, pay TV, vMVPD, broadcasters, and content owners.
Podcast produced by Security Halt Media
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:Welcome to the Dan Rayburn podcast. I am Dan Rayburn, along with co-host Mark Donaghan, back this week to break down some Q4 and full year earnings for you, which is good. We've got some great numbers here. We've also got some interesting comments from some management teams, including Apple, meta and some others, regarding some video services, which was good. So, mark, we got a little bit of details that we hadn't heard from the companies before. About profitability Amazon had a very interesting comment on Amazon Prime Video as a standalone. So let's jump right in here. Let's start with Apple. Apple's pretty straightforward here. So Apple's revenue is up 2% year over year, which is good, because that's the first quarter in four quarters where they saw growth and overall revenue. What Wall Street didn't like was sales in China declined by 13%. They were surprised by that. They seemed surprised that it continued at that rate. But yes, I mean, the China stock market is like at 1989 levels.
Speaker 3:So the economy is.
Speaker 2:The economy is not great. There's also more competition there too.
Speaker 3:That's right, that's 12. Of course, apple didn't say that.
Speaker 2:But let's just speak on their behalf. We already know that's the case Now. They surpassed 2.2 billion. Their install base of active devices has expected. Service revenue was really where they saw some good traction. They saw about 11% year over year to 23.1 billion. Iphone revenue was still up though almost 70 billion, so that was up 6% year over year. Revenue for Mac was flat and revenue from iPad fell 25%. No surprise, they've got some new iPads coming out.
Speaker 2:They haven't upgraded them in a while. And then revenue from what they call wearables, home and accessories revenue that fell 11%. I'd say the only thing to really take away from here is Apple. Ceo did say that they believe that there's a huge quote, huge opportunity for Apple. Regarding AI, they don't want to get into more details but then said, as we look ahead, we will continue to invest in these and other technologies that will shape the future. That includes artificial intelligence, where we continue to spend a tremendous amount of time and effort and we're excited to share the details of our ongoing work in that space later this year. So they're going to announce something tied to AI.
Speaker 3:Everyone's predicting it's going to be an AI app store of some kind, or it could be just supercharging Siri along with a whole host of other applications throughout the Apple ecosystem that just even further lock. Both lock you in, but in. I view it as a good thing. Apple already, if you're using a Mac, if you have an Apple Watch, if you're using an iPhone, if you're in the ecosystem, it really is a remarkable user experience. But can you imagine supercharged, where it knows all about what you do, what you like, what websites you're authenticated to and book tickets, whatever? There's a lot of amazing things.
Speaker 2:I agree. I think that'll all be baked in. I think the thing here, though, they're definitely looking for something for Wall Street to get excited about going forward for Apple. It's not the Vision Pro and where growth is going to come from. So I think the announcement is going to have to be something tied to a store for AI apps or something that is going to get Wall Street excited of oh, there's going to be revenue generated from this Not just user benefit, which is tangible but intangible.
Speaker 2:Yeah, wall Street doesn't care. Yeah, exactly, it's like To Wall Street. Yeah, doesn't matter, they want to know about.
Speaker 3:AI in China. That's right, yeah, that's right Alphabet.
Speaker 2:So YouTube advertising revenue is 9.2 billion 15% year over year. So while they did see a slowdown at one point with YouTube ad revenue, that is not the case anymore. It's still growing by a healthy clip. Cloud revenue is 9.2 billion, so that was up 20.3% year over year. So I had an operating profit of 864 million. So their cloud revenue is still very small compared to Amazon but it's growing and it has an operating profit.
Speaker 2:They were down 7,732 employees from the end of 2022 to 23. And on the earnings call, the company declined to give out any YouTube subscriber numbers. They were asked multiple times. They were asked how the NFL Sunday ticket did.
Speaker 3:They gave us the usual we're very excited, that's wonderful, I could just say exceeding expectations. That's the best, the usual. It helps our ad business, sure it does Lots of synergies.
Speaker 2:Nothing there, unfortunately. I was hoping. I was hoping maybe at some point we're going to have to get something from them.
Speaker 2:Let's jump on to Amazon here. So let's talk about Amazon's cloud revenue. All AWS revenue for 2023 was 90.8 billion, up 13% Over $90 billion in cloud revenue. Revenue for the quarter of AWS and Q4 calendar 2023 was 24.2 billion. Amazing, there was no details given out on prime video usage. They did give out as they usually do. Advertising revenue across the platform is 14.6 billion, so their ad revenue is up 27%. Incredible how Amazon was still is this commerce platform and yet realize they could generate a tremendous amount of revenue from services cloud services, aws and then advertising, which, mark, we wouldn't have six or seven years ago. Probably in the industry would have been like oh well, you know, at some point, soon down the road, in a couple years, amazon will have almost $15 billion in one quarter from ad revenue. It's incredible. That's amazing.
Speaker 2:Now we did get a couple key points on the earnings call here. So Amazon says it spent $18.9 billion on content in 2023. Put that in perspective. In 2022 they spent $16.6. So a little over $2 billion of additional content spend In 2022. They told us approximately $7 billion was spent on Amazon Originals and Lodge Sports. It's 2022. But when asked, they would not break it out for 2023. So we don't know where the content spend was in 2023 across genres or verticals. Now the CEO did say that the company has quote an increasing conviction that Prime Video can be a large and profitable business on its own Interesting. We've never heard them that I've ever seen. We've never heard them talk about profitability in Prime Video as it pertains to standalone service.
Speaker 2:Yeah, it's super interesting and you wonder how they would come up with profitability, considering how they would look at costs, being that the majority of people have this part of overall prime. But the fact that they mentioned that that is interesting.
Speaker 3:I even wonder if they're keeping a almost like a second set of books. I mean it from this perspective, because obviously, the way that they would account, being that Prime Video is a part of well, you can buy Prime Video now on its own right yeah, separately.
Speaker 3:But up until recently it was part of the whole Prime Bundle, so the accounting even you had to. But I'm just wondering if they aren't tracking this very closely, like, hey, what if this was a standalone business and everyone was paying a subscription? What would the economics look like? To your point, how?
Speaker 2:would they break that out? If you're paying over $100 a year for just Prime in general, Do they then allocate a portion of that?
Speaker 3:just to Exactly yeah and you know what, now that I think about it. I mean just from a tax and accounting. Maybe they have to kind of do that anyway allocate a portion of that $100 that I spend every year. I don't know, but that's neither here nor there, it's just that, oh boy, I don't know that one.
Speaker 1:Yeah, I think.
Speaker 3:I do think it's pretty obvious, or it should be obvious, to those of us who are in the industry and tracking. You look at the diamond sports and I think you've got something at the end here. We'll come back around on that but you look at that, you look at all the sports, just the sports licensing deals they're doing. I have to say that I'm finding myself just as a user, I mean just as a person that likes to watch content, consume content. I have to say it's about 50-50 with. Do I go to Netflix first or to Amazon Prime when I don't know what I'm looking for? And generally I'm very pleased when I go to Amazon Prime. In other words, the quality of the content, the variety. Maybe I've got strange tastes, but I don't think so. I think I'm pretty mainstream.
Speaker 2:Well, they have so much in the way of sports. What I like about this number is we know Netflix has put out that they're expecting to spend $18 billion, $17 billion, $18 billion this year in content, similar range. Yeah, Right, very similar. We know how many subs Netflix has. We know what their ARPU is. Would be interesting to see how, over time, amazon allocates a portion of the total Prime membership, what that ARPU is. To your point, how they do that in the books man, I have no account.
Speaker 3:Yeah, I couldn't even advise on that one Exactly, nor could I.
Speaker 2:There's a way to do it, but the fact that they actually came out on record during the call and said that they have this conviction that it can be that Now they didn't say when large and profitable, by when, 10 years from now, Don't know, but just they've never said anything to that reference. So I think it's interesting. The other thing they said, Mark, is they're looking for ways to increase advertising and all streaming properties Fire TV, Prime Video, Free V Twitch. No surprise, they said it's a total, it's an important part of the total business model.
Speaker 3:Hey, by the way, Dan, and they did say have you watched Free V? Have you ever?
Speaker 2:Yeah, oh yeah over the years, of course.
Speaker 3:So we're going through Bosch legacy and it's only available on Free V and, honestly, I was a little bit bummed because I had the perception that, like, ah, you know the quality is going to be. Of course I don't really like the ad load, but I have to say the quality is really good. Quality what that particular show or the ad? The quality of video? Yeah, sorry, the quality of video, it's quality of the video coming through.
Speaker 3:Exactly, the ad experience is very seamless. It's a little bit some of the episode. What was weird is some of the episodes seem to be loaded heavier than others, which I didn't quite get Like. I think it was a second episode of the first season. This is Bosch legacy, so not the original Bosch. It was a little bit insane how many ads got served, but later it's been okay, but I was just really impressed. You know, I felt like wow, this is a really good experience, high quality video. You know the ads were not all relevant, but no worse than broadcast television, you know, that's for sure.
Speaker 2:Yeah. So I think, mark, we're going to talk about the Amazon Ad Stuff next week's podcast, because there's a lot there I want to bring to that. I would say you know a couple things to point out. There is one remember this always used to be IMDbTV.
Speaker 1:Yes, that's right.
Speaker 2:So Amazon has been inserting ads in video for a long time, and that was one of the things we'll talk about next week is when they talked about ads in prime video. You had these goofball analysts be like, well, okay, this is going to take them years. It takes a long time to start an ad business and it's like guys, they've already been doing this and they've been doing this in Twitch. They just now apply that technology inside. That's not difficult. The other thing, mark, I wonder, is because Bosch is an Amazon original. Hmm.
Speaker 1:Right they own it.
Speaker 3:They produced it, it's actually their longest running show they've ever done. Great show too. I love it.
Speaker 2:I wonder what the impact there is in terms of do they serve more ads or fewer? Because they own it.
Speaker 3:Also video quality, Because keep in mind video quality, the way they shot that. Yeah, you're right.
Speaker 2:We'll talk about that next week, but some of the services like that in terms of the services offering just free content with that, some of them are doing a great job. Others have been hit on the market. For me, tubi's been just not a great experience.
Speaker 2:So let's talk more about those free services next week, when we go through the Amazon ad side, but it's definitely interesting to see what Amazon is doing there and, no surprise, they're saying it's important to them. And then, finally, on Amazon Mark, you're talking about where to go for content. They secured a new multi-write broadcast deal in Mexico with the NBA, so Prime Video is going to stream over 50 regular season games and playoff seasons each season. Now this new agreement adds in Amazon because Disney and Tudin are NBC's rights holders in Mexico and they already had a deal to do this in Brazil back in 2022. So not completely new, the tie up between NBA and Amazon, but it's another 50 games in Mexico. And then, finally, amazon talked about restructuring its international business. So they're doing a reorg, which is going to cut content and staff in Africa and the Middle East so they can focus more on European market, european originals, and they said the reason they're doing this is, to quote, focus on the areas that drive the highest impact of long-term success. So it makes sense. They're using all the data analysis they have of what's watched, when, how, why, what's popular, to really make decisions in terms of where they invest.
Speaker 2:Let's move into some more earnings here. Let's do Microsoft and Meta Microsoft. The only one we'll cover here is cloud revenue of $33.7 billion up 24%. So you have Microsoft cloud revenue one quarter of $33.7 billion. You had Amazon AWS revenue of 24.2. You had Alphabet cloud revenue of 9.2. So a little bit of comparison there. Also, keep in mind, that's Microsoft's total cloud revenue. They also break down cloud revenue different than Amazon does, so not completely apples to apples. The other thing that really matters here with Microsoft is the CEO came out and said quote we've moved from talking about AI to applying AI at scale. Really, what they're talking about there on the cloud side is they're they're not really applying AI. It's really their customers are applying AI on their cloud. Linkedin revenue increased 9%, but they didn't say what the actual revenue was.
Speaker 2:Let's jump into Meta. You know Meta has been a really interesting story the last year and couple quarters. So Meta stock is up huge today, friday February 2nd. Market's now closed, but it was up big today. You know Meta, once they started really cost cutting over the last couple quarters. Wall Street has really rewarded them. So everything about their business was up.
Speaker 2:But we're just going to focus on the reality labs division. So it lost $4.65 billion in the quarter. It has now lost more than $42 billion since the end of 2020, which was the first quarter when numbers were made available publicly, so that's an insane number. Now, at the same time, revenue for that division in Q4 did surpass $1 billion for the first time, up 32% with $1.07 billion. And then, finally also, meta declared a cash dividend of 50 cents per share, the first time they have ever done that in the history of their company, which was also a signal to Wall Street that you don't add a cash dividend if you think the future is going to be a problem for you as far as cash flow. So Wall Street like that.
Speaker 2:And then they did give out some numbers on Instagram threads. They said it now is more than 130 million MAU monthly active users. Now, as I put on LinkedIn, I don't know how they define MAU for threads, because in 2022 they announced in an SEC filing they were going to be moving away from using MAU and will be converting to DAP daily active people and MAP monthly active people. And when they break out their definition of MAU, it's very clear. But they say that the MAU definition is based on user activity only on Facebook and Messenger and not on our other products. So I don't know what that number in threads means. We just don't have any understanding of 130 million, how large that really is.
Speaker 2:So that's Meta, let's go into Disney. Disney's earnings are still a couple of weeks away, actually, less than a week away. What I'm saying, they're February 7th, so we'll cover them on the next podcast. The news out here is two things. Disney sent an email to subscribers notifying them of an updated agreement with new wording that prohibits sharing accounts outside the user's household. So no surprise, we knew that was coming. We'll see how much they cracked down on it, and the method is that they use to actually do that.
Speaker 2:And then, separately, the Wall Street Journal reported that Disney has reached an agreement to sell 60% of its Indian business media business, which we've been talking about for a couple months supposedly at a value of 3.9 billion, which is dramatically less than what it was worth when Disney acquired in 2019, which was around 6 billion. So they're saying in the deal, disney will retain ownership of 40%, reliance alone 51% and Bodhi Tree will own 99%. So these are the companies in India that are taking over, so we'll see what happens there. The details that came out are pretty specific with numbers and shares and when it's going to happen, so it sounds like it's a done deal A couple of other things here.
Speaker 2:On cord cutting, let's go to Charter. So Charter lost 248,000 residential pay TV subscribers, and then the year with 13.5 million residential pay TV subs. They also lost 61,000 internet customers, which Wall Street did not.
Speaker 3:Yeah that's a little surprise to see that number.
Speaker 2:Well Comcast did in Q4 as well.
Speaker 3:So where are those?
Speaker 2:users going I wonder yeah you wonder what market they're in. So where I live here in the Northeast you can get three different providers. Comcast is not one of them. Verizon gained broadband subs, so maybe you know, maybe Verizon gained some of those that left with charter it's hard to know the other thing with PayTV and just broadband usage marked it.
Speaker 2:You know the industry never tracks or discloses is especially after COVID. Now how many people are still moving? Yeah, I still seem to know people every month who decided to move states yeah, there what I like that's, you're technically cutting broadband. Yeah, that's right.
Speaker 3:Yeah, that's true. You're signing up somewhere else. Yeah.
Speaker 2:So you wonder what's going on there.
Speaker 3:Stock was down 15% today, the market did not like this.
Speaker 2:They did not like it and yet charter ended free a 2023 with free cash flow of 3.5 billion. That year, although I checked their ARPU mark and it was pointing, I think it was 0.9%, it was basically flat year-over-year, so it's not as if they got a lot of more more money from broadband subscribers by losing video customers. Some have, but they didn't seem to. The other piece of information on the earnings call that they gave out is Trotter launched their zoom-o stream box a couple months ago in October. They said today that they've deployed. They have deployed nearly 1 million of the streaming devices. You know, I don't know exactly what deployed means. Does deployed mean installed in the house?
Speaker 3:Yeah, sure, I'd have to get clarification have you, have you played with this box? Have you had a chance?
Speaker 2:I have not. I'm not played with box. I got to spend a good amount of time with Company executives before it launched. I'm talking about the business. I've seen some, some of the interfaces and whatnot, and then one of the executives spoke Last year at the NAB show right on stage with a fireside child, me talking about what they were aiming for pre-launch. But no, I've not had a chance to get access to the box yet. Definitely something that that I want to do, but I just had the chance as of yet.
Speaker 2:Let's go into harmonic. So harmonic people might remember they had previously said that they were reviewing their video business Because they received indications from a number of parties that was was interested in the business. Harmonic said that quote to date, that interest has not yet translated into a definitive agreement with any party and that they are continuing the strategic review process. So no update. Just because some companies show interest doesn't mean that that's going to equal a sale, which is something harmonic set from day one. Any company has to Do do diligence and you know with the shareholders if some companies are interested in purchasing something to look if that's, you know, potentially a good deal for the company. So Doesn't look like anything has moved as of there. Revenue is up 1.6% in the quarter. Broadband segment was up 20%. Revenue from the video segment was down 24%.
Speaker 2:We expected that that's right Cash on hand 84.3 million. So not not much of a change there. Let's go to Fox Sports. Real quick. Fox Sports at over 58.9 million peak viewers on pay TV for the NFL championship game, the NFC championship game, I should say 58.9 million. Now put that in comparison to peacock 16.3 million concurrent devices number and let's just reinforce that. The internet is not prepared to replace pay TV as a broadcast distribution platform now with the same level of Quality, reliability, scale and, as I said, online mark. No new codecs or 5g. Some hyped AI blockchain nonsense is gonna fix that come on, come on.
Speaker 3:There's a token, dan, that's gonna just you know well utility token.
Speaker 2:Tell. I see it happen. I don't believe those tokens Once they're robbed out of your wallet. Now a TS, atse 3.0, okay, interesting it's not making an impact today. Maybe you could down the line. But but put that in perspective for listeners, mark. I think it's important they realize so called 58.9, 59 million pay TV To peacocks 16.3. It is such a large number. Now, the other thing I would use as an argument here, because I know some people say no, no, no, it'll catch up. So you're talking about pay TVs 3.6 times larger traffic. What would you do if you had two sports games going?
Speaker 1:on exactly.
Speaker 2:Could you imagine if you had over a hundred million peak viewers and pay TV? The internet can't handle that. The peacock, 16.3 million. There was a percentage of them that definitely did not have a good user experience. What percentage we won't know, but these are the numbers that we're talking about. They're big numbers and. Tying into this mark in terms of, you know, I think, setting expectations for, for listeners, from the end of beginning of February, here first week. But 2023 is gonna be rough. Industry thought, okay, we got sorry, yeah there you go.
Speaker 2:2023 was rough, but it's been a long week 2023 was rough and I think many thought, okay, lot of layoffs.
Speaker 3:Yeah, we got through it and now ours been reset right.
Speaker 2:I'm here to tell you that's not the case. It's not good news. I hate to say it, but If you think sky, which just cut a thousand jobs, and paramount, which announced they're going to cut some we don't know when or how much are the only ones, that's, that's not gonna be the case. And here's the things to look at. Peacock is losing too much money. It cannot afford to burn billions of cash. Comcast is gonna have to do something there. We have these rumors. Mark, of course, that the ESPN is looking for investors Sorry, I should say strategic investor like the NFL or others we've heard mentioned.
Speaker 2:If the NFL were invest in ESPN, there's going to be layoffs because you're not going to need a lot of headcount of both of those companies doing the same thing. We're done and see across. Both those companies will force headcounts. Dish, comcast and Verizon are all losing too many pay TV subs Can't keep them in those divisions. Sky said a lot of the employees they laid off were from traditional pay TV because of the move to digital. Now, if we get into assets all this talk about Paramount, warner Bros, discovery, amc Networks, lion's Gate However, all that shakes out, there'll be layoffs because you'll have redundancy if content is acquired or companies are acquired. I don't think WBD and Paramount are merging, but if private equity PE takes over, first thing they're going to do is cut Very first thing so, for all the talk of consolidation, merging content assets makes no sense until companies can actually figure out how to monetize content with profitability.
Speaker 2:This idea we still keep seeing people write every day, mark, about, oh, merge, this, merge, that, joining two debt-lating companies to create one with more considerable debt that's not a consolidation strategy. By the way, that is not what private equity does. Private equity is very different in terms of when they come in and their strategy going forward, the first thing they look to do is cut costs and cut headcount. So I hate to be the bearer of bad news, but we are going to see more layoffs in 2024 across vendors, ott platforms, pay TV, virtual MVPDs, content owners. The massive layoffs that we saw in 2023, well, just in January alone, the number of layoffs we've seen are huge. And another one, mark we didn't mention it last podcast because it recently came out with Zoom.
Speaker 1:That's when we announced the layoff of 150.
Speaker 2:Now they say they're just restructuring, they're just looking at ways to optimize the company. Yeah, that's great. All companies do that. But 150 employees is 9% of their workforce, that's not 1%. So it's going to get harder this year. There's no way around it. Reality of the market that we're in.
Speaker 3:Yeah, it's really tough. I think it's amazing to me, on one hand, that harmonic is and we don't know all the details, whether they are just as you have said have a fiduciary responsibility. If someone expresses interest, they have to acknowledge that and then maybe they start a process. So that would be on the more like hey, we're just following the rules, or, if there's something more strategic, like hey, if we sell this, we generate some cash, we can go do something. We don't really know what's driving it. But it's amazing to me Harmonic is still harmonic. They're doing the video segment, or video group is doing $200 million. Maybe it's legacy, maybe there's people who think, well, it's kind of a declining sector. The point is, harmonic is still harmonic and they can't get a buyer. And I've heard just a little bit from various folks who have kind of looked at it. They have made offers and you know, I heard you're buying it.
Speaker 3:Well. Dan, I mean I couldn't get that check from you, so you know?
Speaker 1:Oh, Dan Dan, sorry, you told me you didn't believe in the thesis.
Speaker 3:But my point, the point I'm trying to make, is is that it is remarkable because several years back, or in different economies, and when money was you know, sometimes we joke it's flowing down the street Harmonic could have sold that business. There's a number of folks, strategic or otherwise, but now you know, sure someone will buy it, but they'll only want to pay $50 million for it and of course they're not going to buy, give it away. That doesn't make sense. But I don't know.
Speaker 2:Yeah, it's different times To your point when money was pre-money.
Speaker 3:One other comment I'll make, you know, is that I think that there's and the industry is by and large woken up to this so, but you know, six months ago not everybody had there was still this idea of you know, hey, you know, we invest in the best, we build the you know the best systems Almost. You know cost is slightly irrelevant because we deliver the best experience to the user. And so, whether that was you know using really expensive compute, you know to do certain things that could be done other ways, or you know that can mean different things. Let me tell you, and the conversations that I am hearing, and it does not matter who it is, this goes from the large hyperscalers to to all the social networks, I mean, it's all the way down.
Speaker 3:It's not like this is kind of the tier two, tier three companies. It is about cost, cost, cost, cutting, cost, cutting cost. And for the very first time, you know, in the video industry now I'm I'm entering into conversations where you know there's there's discussions around certain technologies or certain approaches that previously were viewed maybe slightly as like. Well, you know, that's a little bit of a compromise, and now people are like it's no longer a compromise. We need that, because it's the only way we can hit the cost Cost, cost quality.
Speaker 3:Yeah, and there's always a trade off it's always a trade off and and you know the point is is that if, if folks are still operating, and especially if you're on the engineering side of the house, if they're still operating as of well, you know, here's the only way to deliver the quality. Let me tell you what you don't want is is for your CFO to tell you how to engineer the system, because that is going to come with some painful, you know, reductions of staff, of everything. So you better figure it out now. You know and I'm just seeing that really across the board, in fact I'm I almost every day I'm astounded at, you know, the organizations where you think you know you've got a ton of cash, you could keep doing what you're doing. They're like, yeah, we could, but you know what we got to get ahead of this. We have to cut costs, you know.
Speaker 2:Everybody has to do more with less, and we've always said there's multiple ways to deliver a video with great quality.
Speaker 3:That's right. That's not only one way to do it. Yeah, that's right. That's right.
Speaker 2:There's always a cost versus quality trade off. Yeah, I don't care how big you are, I don't care how profitable you are. The point you're making is valid, which is you have to provide a good user experience, but you also have to do it in a way that you can show on your balance sheet that you can be profitable.
Speaker 3:Yeah, yeah, that's exactly right. The coin гa.
Speaker 2:Speaking of profitable. Plex has raised a new round of funding larger than their 50 million. Yeah, they're close in 2021.
Speaker 2:So they've confirmed it. They haven't said how much they've raised, other than it's larger than the 50 million. To give you an idea, plex raised previously a B round of 10 million in 2014. So, figure B round of 10 million in 2014, 50 million round in 2021, and then another round now let's call it 2023 really, plex, as they expect to reach profitability by the end of this year or just after. So expect we'll hear more on that.
Speaker 3:Yeah this one. Yeah, I have to say, dan, this one really caught my eye. A because raising 50 million dollars in the video space even in good times was impressive. Now it's like wow, that's really remarkable and you would have to believe that investors must believe that they're going to get there in terms of profitability. You would think so.
Speaker 2:Also, they didn't say where all the money came from, but some of it are certainly large portion and I do know it's from current investors.
Speaker 2:Plex also has had some really good investors from day one. They've just really believed in the company and what they're doing. Also, plex hasn't raised that much. Right before this raise, you're talking about a B round of 10 million, another round of 50 million, so call it 60 million. Their A round certainly wasn't 40 million. So they've raised less than $100 million since 2014. And that's only the B round. So I forget when they actually started a couple of years before that. So we're going to get some more information from them soon. But, to your point, if they can go through investors and current investors who know what they're doing and say also we expect to be profitable in the next couple quarters, that definitely helps.
Speaker 3:Yeah, for sure, very interesting. A couple other quick hits here.
Speaker 2:Mgm Plus has raised the price of its subscription by a dollar, so that's now $7 a month, just on a regulatory filing. This was interesting. The NCAA generated $1.28 billion in revenue for the 2022-23 fiscal year, which is up by almost $150 million from the previous year. Mark, you mentioned Diamond Sports Group. They announced today that they've reached agreements with the Texas Rangers, cleveland Guardians and Minnesota Twins on the linear cable contract for the 2024 season. But no, that does not include DTC streaming, and isn't that?
Speaker 3:where Amazon steps in. I know it's fuzzy.
Speaker 2:I know it's fuzzy best. I don't think anyone knows at this point. I'm sure those conversations are taking place, but also they first have to emerge from bankruptcy. So the court has to approve that first. So yes, them coming to agreements with some teams is certainly good for the linear side, but man, there's still a lot of work to do there. I think I should be a bankruptcy attorney right now?
Speaker 1:Yeah, there's got to be a lot of work there between that and.
Speaker 2:Mergers. And then final piece here before we go into the last story, Telly.
Speaker 3:Oh yeah, those guys. Yes, they've been working with Telly Brain giving away free TVs.
Speaker 2:Free TVs. Yeah, it's supposed to revolutionize TV with the most advanced.
Speaker 3:TV ever. I know, I know you've got one in each room, right, dan, yeah, oh, yeah, yeah of course, of course Well so that's part of the problem.
Speaker 2:I think, Mark is, if you're an analyst or member of the media, they will not put you on the list to get a TV.
Speaker 3:Oh, I remember reading that. Yeah, crazy, yeah. Even the Verge was like we can't get one.
Speaker 2:They told us, as a member of the media, we can't, and I'm like, well, there's a reason for that, of course.
Speaker 1:That's just not smart.
Speaker 2:So they did a little bit talking. What they said was they fell short of their goal of delivering half a million TVs for 2023. They won't say by how much or how many they delivered. They did say people are really liking the TV and they're excited. I've seen quite a few reviews, quite a few. I've seen maybe a dozen reviews, mostly in Reddit. Some people just saying oh hey, it's TV, it's free, I don't care about this separate screen with the ads on the bottom. Seem fine with it. Others are really. The picture's not great. There's not a lot. You can't adjust. The settings aren't what I want. They have no product support, so it really depends on how, I should say, experienced the end user is yeah, that makes sense.
Speaker 2:But no details from them. Mark, they did reach out and say, oh, we should sit down and do something great with you at the NAB show, and I was like, great, you have to be able to answer these questions. And then the answer was mm-hmm. All right, we'll have to check on that. I'll get back to you. So I guess that means no. But hey, if they can talk numbers, I'm all for it.
Speaker 2:And then, mark, we'll just close out here with a kind of a sad thing for me, just kind of a close out of something in the industry. So Lumen technologies actually they're not called Lumen, are they called Lumen technologies? Yeah, they're still called, I think, technology after Lumen, but Lumen has shut down their content delivery network. They actually were one of the seven CDNs who were being used for the Peacock exclusive wild card game. So even though they announced they were selling approximately 100 CDN contracts to Akamai a couple of months before that, they agreed to stay up and running until the Peacock game was over. A couple of days after the Peacock game was over, isps started to report to me and also on the NANOG list and some other places where ISP engineer nerds hang out, that they're already deprovisioning Lumen and they stop sending traffic. So Lumen is pretty much at this point another CDN that has been around for quite some time in the industry and closed their doors to Peacock or their CDN business. They were generating about 200 million in revenue. If you go to cdnlistlistcom, that'll take you to the post on my blog which goes through the history of all the CDNs on the market List, every single one. What happened to them? Who acquired them? Who went bankrupt over what period of time? It's incredible how many are on that list. I think it's over 50 vendors now, so unfortunately I have to add Lumen to that list.
Speaker 2:I will say, for all those who were at Lumen for so long, mark, for a long time Lumen provided a really great service in the market. They were seen as a great quality CDN. They provided good QOE. Their business was growing for a period of time. Hitting 200 million dollars in revenue was certainly a good threshold, especially back in the days when a lot of companies never got on the CDN side past 50 or 60. But we really saw the writing on the wall, I would say, about two years ago. In August of 2022, lumen sold off their Latin American operations. So that was sort of a problem. As you can see, with a global CDN you're selling off network assets. They had recently refreshed some of their CDN hardware, so those assets I expect will be redeployed for their edge-barret metal product offering.
Speaker 2:And then just a little history here, marked for people that don't know, so in 1999, sandpiper, which was one of the earliest CDNs on the internet. We kind of give them credit in the industry as being one of the first commercial CDNs, they were acquired by Digital Island. And in 2001, digital Island was acquired by Cable and Wireless. In 2002, cable and Wireless withdrew from the US market and they sold the US company to Savas. In 2006, savas exited the CDN business and they sold their CDN assets to Level 3. And in 2017, level 3 was acquired by CenturyLink.
Speaker 2:And in 2022, centurylink changed its name to Lumen. So pretty incredible to think. The history of Lumen kind of goes back to the Sandpiper days to a degree. Obviously, you're not using technology from 1999. But for many years there you really had a great I should say Lumen had a great CDN team really when it was Level 3, a great team. So for all those who were working at Level 3 at the time, it's probably kind of a little of a bit of a sad thing to see it all shut down.
Speaker 2:But you know you guys did good work for many years. They helped support some of the largest events at that time with the Olympics. They were a big provider to Microsoft. Also Apple as well. Before Apple had their own CDN. But unfortunately another CDN exits the market and it condenses the market even further. There's really only less than 10 CDNs globally around the world if you exclude China. A lot of things happening in APEC that are obviously specific to that region, but global, large scale CDNs there's less than 10. You then have regional, what I call CDNs in a particular country, but unfortunately Lumen has shut its doors for its CDN. But a great service for a period of time when they were still out there.
Speaker 2:So that's what we got this week, Mark. Next week we've got Disney, Fox, Lionsgate there was somebody else oh, AMC earnings, Also a couple of vendors, Cloudflare and some others. So we'll hit those up next week, Mark, and then I think we'll do the Amazon advertising. There's a lot of just keeping little pieces of information that we've been seeing, that's been coming out, and I think maybe we'll break down some of the numbers because I think it's fascinating how we obviously always get projections from people in size of markets and business, but fascinating how across five or six I mean as many as half a dozen analysts have put out projections and the revenue number is as low as $500 million and as high as $6 billion for this year alone. That's not even the next couple of years. So the projections and the methodology that people are using in the market are really kind of all over the place. And hey, look you me. Nobody knows what the methodology really should be because we don't know how many subscribers they have or usage or how many ads will be delivered, or what's CPMs?
Speaker 2:or so, really unknown, but I think breaking some of that down next week would be helpful. There's also a little bit more information that's come out from the earnings call with Amazon tied to advertising, so we'll do that next week. And then Mark, finally, the anyb show streaming summit's coming along really well, so a lot of sessions now confirmed around fast AVOD, monetization, packaging, distributing. What do we got here?
Speaker 3:AI. You've got some nice AI demos.
Speaker 2:Got some AI tracks. We've got AI demos. Paramount CTO will be one of the keynotes on day one. That's great. Got some great companies lined up. I think there's now 20 or so sponsors on board as well. We've got the large cocktail party taking place the Monday night of the show. I'll push news out on that in LinkedIn this week. So I'll start pushing up content online to the website anybstreamingsummitcom. But if you're interested in speaking man, now's really the time to reach out to me, because if you wait, another two weeks it's going to be really hard to get agenda.
Speaker 3:I almost lost my window, Dan. Everything's starting to fill up. I'm glad I called you a couple of days ago.
Speaker 2:I don't think you lost your window, we just had to refine the topic.
Speaker 3:Sorry, well, we got it nailed.
Speaker 2:Which is a lot of what I'm doing now. I'm going back to a lot of moderators in particular, and refining topics and making sure it's on point. But I'm super excited we're going to have great content, great speakers. We sold more tickets right now to the show in advance at this time than we've had for any other conference that I've done.
Speaker 3:Which is great, yeah, with no content produced.
Speaker 1:So that's helpful as well.
Speaker 2:So a lot of good stuff coming In the meantime, have any questions? Reach out to Mark and I. We appreciate everyone listening. If you have any questions, mark and I are always available to take them for you or try and get you in touch with a person who can answer your questions. Hope everyone has a great week, be safe and we'll talk to you in the next podcast.