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 0:24

Welcome to the Dan Rayburn podcast. I'm Dan Rayburn, along with co-host Mark Donegan. Mark, I think I feel like we're coming to listeners today from the sun, Because we're recording this on Friday, June 21st.

Speaker 3 0:37

It's hot Heat wave.

Speaker 2 0:39

Yeah, here in Northeast it's 104. Feels like 104 today and humid. And in Phoenix it's 110 or something that's like normal for you and you know we're like hey, it's a normal day in Phoenix.

Speaker 3 0:51

Come on, what are you complaining about?

Speaker 2 0:53

Yeah, it's not normal around here, but by the time listeners are hearing this, the heat wave is over, which is good. We've got some news this week, mark of some some numbers again, which is great, some viewership numbers. We've also got some some things tied to the ad industry here, ad tech, uh. We're going to go through, uh, some announcements as far as what companies are doing with regards to packaging, licensing content. We've got some some new venue sports announcements as well, so let's just jump into uh, wbd. They put out numbers for season two of house of the dragon and I thought these were interesting to compare because they also nicely gave us numbers for the year before. So the us us only saw 7.8 million cross-platform viewers, so that's tv and streaming, 7.8 million. In a comparable length of time. There was 10 million for season one premiere. Now they did not release specific numbers for europe and latin america, but they did did give out percentage numbers saying that growth here's the growth they saw we don't actually have numbers, but the 7.8 million included Europe and.

Speaker 2 2:10

Latin America. No. 7.8 is US only.

Speaker 3 2:13

Oh, okay, yeah, sorry you said that. Yeah, US only Okay got it.

Speaker 2 2:17

Yeah, so season one to season two, 10 million to 7.8 million not too surprising. Yeah, I don't think there's ever a series where season two does better than season one of anything.

Speaker 3 2:27

Yeah, yeah, that's just the reality of it, yeah and this, but I don't really pay attention to data. I just sort of look at my own behavior and those of my friends. I am definitely still watching high-quality content but I would say overall my viewing time is down Not down a lot and not because I'm not interested, it's just I have so many other things that competing for my interests and I think a lot of people are that way.

Speaker 2 3:11

Yeah, that's just, that's the nature of it. Also, season seasonality as well, exactly Going into the summer more vacations more people off, yeah.

Speaker 2 3:20

So, talking about some of that Mark in terms of viewership, I put together a long list this is on LinkedIn already, that's right Of TV viewership, and the reason I did this with some sports events lately is we obviously have the NFL games coming up on Christmas on Netflix, mm-hmm. So I started taking a look at just how big is NFL viewing on TV, and when you're looking at NFL viewing on TV and total number of viewers compared to NBA finals, indy 500, the NHL conference final, it is incredible how much larger the NFL is by just leaps and bounds and even on the streaming side. So best to look at this on LinkedIn, definitely.

Speaker 3 4:02

This is a great post. Yeah, there's a lot of data. It took a while to dig all this stuff. Yeah, how long did it take you?

Speaker 2 4:07

Dan Probably an hour. Yeah, I bet. The great thing is, every single one of these numbers came directly from Fox or CBS or NFL or Amazon.

Speaker 3 4:15

It was just finding them all you just had to go aggregate it and collect it.

Speaker 2 4:18

Yeah, that was it, but these are. These are not estimates. This is directly from the content owners, broadcasters themselves. But to give everyone an idea, monday Night Football on ESPN averaged 17.1 million viewers. That's for the previous season. Thursday night on Prime Video averaged 11.8. Sunday night on NBC was 21.4. Fox averaged 19 million. Cbs averaged 19.4. Wow, fox averaged 19 million. Cbs averaged 19.3. Yeah, so if you just look at the numbers on TV, you're talking anywhere between 17 to 21. Yeah, On average, the NBA finals on ABC and ESPN averaged 11.4 million. This was game three, so that is the next.

Speaker 2 5:05

That's the next highest, next one down, the next one down in terms of order Now, the moment you go to the next, the largest sports event there, it's the Indianapolis 500, which had a total audience delivery of 5.3 million. But that's across TV Peacock, nbc Sports Digital Platforms 5.3.

Speaker 3 5:24

Less than half Now dropping below that.

Speaker 2 5:27

The NHL Eastern Conference Final Game 6 on ESPN averaged 3 million, Peaked at 3.7, but it averaged 3 million. Us Open golf on NBC and Peacock had a total audience delivery of 2.3. Peacock had a total audience delivery of 2.3. And once you go below that, Formula One, Grand Prix, WNBA, NCAA, softball those are all below two. It's amazing Below 2 million. Yeah, Now even the Premier League on Peacock this streaming only, obviously, so, not TV.

Speaker 2 6:02

It averaged a total audience delivery of 546,000 viewers per match. The championship game averaged a total audience delivery of almost 3 million 2.9. But just to put it out there, it just shows how big NFL is for viewing on broadcast and some of this. Now moving to streaming, where we have exclusive games on amazon or the wild card game on peacock. What we don't know, mark, is fox cbs. They don't break out the viewership on pay tv versus those that are doing TV anywhere or any authenticated apps. Yeah, that's right. So don't know. Don't know the breakout there was. Nbc sports actually does many times break out the difference between just NBC and Peacock or NBC digital platforms. So nice for them to do that, but we don't get that from everyone.

Speaker 2 7:02

So, just check it out on LinkedIn, it's. It's very interesting just to really look at these numbers, and you know the reason I put these out, Mark, is we're all just talking the industry about what's popular, and it's interesting how so many people want to talk about one particular piece of technology killing off another service. Everything's about killing that industry.

Speaker 3 7:22

I don't get what this thing is.

Speaker 2 7:23

Wars, killing, yeah, wars exactly Like what's up people. Wars are not good. Exactly, there's nothing good about war, okay, there just isn't. And what we have is competition, and that's a good thing. But all this thing about killing it off like pay TV, like it's going to die, I'm just. I'm always amazed at the language people are using.

Speaker 3 7:46

I'm just, I'm always amazed at the language people are using. Well, I think there's. Yeah, you know, I really liked that you broke out these specific sports because also generically, it's, you know, sports is hot, sports is the future. Well, what sport? So I go do an exclusive deal, you know, with tennis, or you know, okay, you okay, you know, fine, you know, depending on what I'm trying to do, maybe that makes sense, but you know, but we talk about it in the industry as sports. So whatever sport I get, I'm just going to go print money and you're showing here that that's not necessarily true.

Speaker 2 8:20

Yeah, so the audience is not as large as people may think Exactly, exactly.

Speaker 2 8:25

Yeah, so the audience is not as large as people may think. Exactly, exactly. Now let me drop one more data point that just came out. Just an hour or two before we did this podcast, cloudflare put up a blog post and what it showed was it's 25, 26 countries that they broke down and what they said was due to so many people watching the UEFA Euro 2024 football games on TV last week, internet traffic in 20 European countries declined week over week during the games. So country related HTTP data, which they give out, shows that traffic to social media services usually increased during halftime Not surprising, yeah, sure, and traffic to websites and categories like productivity tools and business and financial services decreased.

Speaker 2 9:17

Sure, everybody's watching the game, but what's interesting is the largest audience is still on pay tv and so much so, yeah, that internet traffic declines during those games. So this tells you everything we need to know. Pay tv is still a very important, yeah, piece, yeah, of where viewers are are seeing content, yeah, in large volume, yeah, so so far, streaming has been a supplement to that. It hasn't been a replacement for it.

Speaker 3 9:49

Yeah yeah, but and we've made this point many times, you know, dan is that you know OTT is just another distribution medium for what is television right or entertainment content. And so as these pay TV networks have moved from you know these, you know like you know for cable, you know like QAM, so very specific technology, and then they move to IP. You know, over the IP data network that that same cable company controls and maybe eventually they get the rights and they decide just to distribute outside of their closed network and over the open internet. The point is the content doesn't necessarily change. It's the exact same program material, the exact same. It's just how it's distributed. So again, we talk so much about OTT as if there's something super magic about OTT compared to distributing over a QAM segment. The end of the day, there's not.

Speaker 2 10:56

It's a natural progression. Is what you're talking about in terms of distributing the same piece of content over? Different mediums based on the right business model, the user and the device.

Speaker 3 11:05

And it opens up and now I'm not. Look, you know, I built my whole career largely, you know, in the OTT streaming space. So it's not. You know people shouldn't say, well, wait a second, mark sounds like you know you're not interested in that anymore. It opens up a lot of great opportunities to deliver outside the home, to deliver new experiences, et cetera. So I'm not saying, but the point is that we're conflating a lot in the industry as if, oh, ott is this whole separate, distinct thing, when in reality most of the experiences are just what you'd get on a cable box.

Speaker 2 11:44

Yeah, Honestly frankly, Mark, I don't even know what OTT means anymore. It's more fast means anymore.

Speaker 3 11:51

Exactly that term to begin with, but how many people are writing LinkedIn posts? Yeah, I mean not surprising. Not surprising.

Speaker 2 12:00

There's confusion in the market around that. Let's go into more sports news here. So the NFLfl is is having their sunday ticket. Trial is still ongoing. Um, and what's interesting is, roger goodell testified over this past week. So, um, basically what's happening here is, uh, roger goodell testified and he said that we view n Sunday ticket as a premium offering. We're charging more for it on purpose. There's a reason for that and the concept has always been that these packages are sold as a premium. Now, I don't think there's a problem with that. I don't think there's a problem with any business out there saying we're going to offer a premium tier of our service and you're going to pay more for it If you don't.

Speaker 2 12:49

Don't take it the problem here is that, legally, if they're limiting distribution, there could be an antitrust issue here. Now I am not a lawyer so I'm not going to go into what they're doing here, but because of this trial and the way it's done, if the NFL is found liable, the jury could award $7 billion in damages, but that number could go up to $21 billion because in antitrust cases the damages can be tripled. Wow, so just interesting here in terms of how big a case this actually is. Also, one of the things Goodell came out and said was the reason that they took the games off of the NFL Network, which they were on for multiple years, was quote I had my own opinion that our production was below standards that the networks had set. We had not met that standard. So the reason it came off NFL Network is, he felt the quality of the experience wasn't great and the broadcast networks could do better. So we decided to take it off our own platform and work with a third party.

Speaker 2 13:58

I thought that was pretty interesting, yeah, coming out and actually saying that. So we'll see what else comes out in the next following weeks, but that was really the only thing I saw this week from the trial Sticking with. Nfl. Adweek recently reported that the NFL games on Netflix, that Netflix is going to have five sponsorship packages and the sponsorships consist of a minimum minimum of eight 30 second ad units, with each package coming in at more than five million a piece. Now, that's what they're offering in the market, whether or not they're going to get that price unknown sure, I mean, we just don't know.

Speaker 2 14:42

But it is Netflix, it is Netflix, and it will be the largest streamed event in the US, for sure, ever. If they do even 50% of what TV viewership did on Christmas in the previous years, it's going to be a big deal.

Speaker 3 15:04

I think Netflix has so much market power. I mean, you know I'm not in the advertising ecosystem to yeah, exactly, to comment about the 5 million price. But you know, even those who are oh, they're crazy, I think they're going to get it. Everyone else has with the NFL Exactly.

Speaker 2 15:23

And you put the numbers out, you know. So it's like an advertiser comes and says, yes, Everyone else has with the NFL.

Speaker 3 15:24

Yeah, exactly. So why should they be any different? And you put the numbers out, you know. So it's like an advertiser comes and says what are you thinking They'll go okay next.

Speaker 2 15:33

And no blackout restrictions. First, time ever. Yeah, that's right, pretty unique, that's right. That's right, so let's go on to some other ad news here, mark. So a couple things have been reported recently. So first one is in a bid to win overall commitments, it's been reported that Disney's been striking deals that call for significant rollbacks in CPM rates.

Speaker 2 15:53

Some are saying that Disney's discounting rates by as much as 10% to 15% and in exchange for those lower rates, disney's securing deals that call for a certain level of volume, which makes sense. If I'm giving you a lower price, I want more volume. Yeah, sure, but apparently this is angering rivals who are hoping not to roll back their numbers to such a degree, of course. But now some are doing so to match Disney's offering. Now, a few weeks earlier, we heard a report that Max was not matching Disney.

Speaker 3 16:27

Yeah.

Speaker 2 16:28

And that others were, so it's unknown exactly, because nobody wants to talk about this on record. Oh yeah, but also one of the key things here was you know, the folks who are writing about this were talking about how big a deal this was, but if you look at last year last year there were rollbacks as well, so this isn't the first time this has happened. Also super important as the key takeaway here, there's a huge increase of digital video inventory available because prime video, you know, made its basic streaming service ad supported, and then we have netflix, which added avod. Yeah, so not surprisingly, there's a glut out there.

Speaker 3 17:08

You know, um, the the way that advertising works is it's a marketplace, it's a auction-based marketplace, it is supply and demand. And this whole CPM issue is really at the crux Well, I shouldn't say the crux because there's others, but the issue around fast not being, at this stage anyway, a profitable business model, which you and I have talked a lot about, really comes down to CPM rates. Because if we could get the CPM rates in the range that it can generate both the revenue and the profits needed to sustain the acquisition cost of content and operations and also return a profit, then guess what? Fast is amazing, right, but it's not there. And so, as more of these services are coming to market, you know, then they're looking for more advertisers.

Speaker 3 18:06

And at the end of the day, it's like hotel rooms, right, once that, once that place, you know, once that night is, you know, once tonight is gone, I can never resell that room. So, guess what? I normally get 200 bucks. Well, if I can get 140, I might as well take it. I'm using a hotel room analogy, not CPMs. They wish CPMs were that high, but, but, but, yeah, exactly so, but, but anyway, you know, and, and that's what the issue is here and again, all this discussion by vendors around the fast gold rush just ignores the fact that there is a fundamental weakness in the CPM rates, and so we can talk all day long about how this is going to be amazing and all the eyeballs are going to these fast services, but the economics don't work.

Speaker 2 19:02

Right now they don't, and I'm glad you brought up Fastmark because I didn't have this on the list to cover. But I will just say we talked last week or the week before about how Nielsen announced they were going to be measuring Lionsgate's fast channel. I did hear back from Lionsgate on how that's being done. And all of it is for background only.

Speaker 1 19:23

So I can't talk to it.

Speaker 2 19:25

But let's just say that I don't agree with the methodology at all that Nielsen is using, of course. And they are not comparing apples to apples yeah, of course At all. It's not even close. Yeah. Also, you can tell that the responses I was given back were written from Nielsen, were canned, which is fine.

Speaker 1 19:42

No, no, definitely not canned.

Speaker 2 19:45

I give Lionsgate great Lionsgate credit. They did a great job on following up.

Speaker 1 19:50

They asked multiple questions what I needed to know so.

Speaker 2 19:53

I appreciate them doing that. I can't use it in writing, yeah, but the Nielsen comparison for methodology is not accurate. Yeah, Just isn't yeah. And you know what? That's why it's not being put out there publicly, because people are going to say, hey, wait, that doesn't make a lot of sense. Wait a second. But they did get back to me Now let's go into a little more on the. So, uh, there's a company called Jounce J O U N C? E. These guys are newer to me in the last couple of months but they they track about 50,000 CTV apps and they offer programmatic advertising consulting services to help track the changes and dynamics in the programmatic supply chain. So they do a lot of extensive independent evaluations to help companies optimize ad buying. So pretty interesting.

Speaker 3 20:44

It's a valuable service. Yeah, I've not heard of them either.

Speaker 2 20:49

So they did a presentation at IAB's Tech Lab Summit last week and the average CTV platform they say now authorizes 30 SSPs. So that's supply side platforms to sell its inventory 30. Now they say that's double the number of SSP streamers worked with last year. Now the problem here is that for those that track SSP maybe I go through this real quick so you have DSP and SSP. A DSP is demand side platform that allows advertisers to just essentially buy ad impressions across many publishers' websites most efficiently. In SSP the difference is it allows publishers to sell their ad inventory to advertisers at the highest possible price. Those are the two difference in the two from a high level.

Speaker 2 21:39

Now the problem here is a lot of SSPs are packaging CT inventory into these omni-channel deals. We keep hearing that term, yeah, yeah. But that CTV inventory can be attached to less desirable content, sure, or it's being resold by other SSPs. It's being resold by other SSPs. So the presentation here by Jounce said that auctions that are operated directly by platforms that own the rights to the CTV content they're selling have a median CPM floor of $14. But the median for auctions operated by resellers is $19.50. So you're talking about an increase of just about 40%, 39% or so in buying through an SSP reseller. Yeah, they also called out Pluto TV. This was interesting. They said they're the most aggressive streaming platform when it comes to SSP partnerships. In the beginning of 2020, they say, pluto authorized four SSPs to sell its inventory. Joun says today that number is about 67.

Speaker 1 22:46

Wow.

Speaker 2 22:47

Yeah, from four to 67 in four years. Wow, now a little more information here. So why am I bringing this up? Why am I bringing this up? So until pretty recently, most CTV ads were purchased directly from a single seller in deals. So, for instance, like we mentioned, a TV manufacturer might have a fast platform and buying directly from them gave the buyer more transparency into ad inventory and pricing, because it's a direct buy.

Speaker 1 23:16

Sure, it's.

Speaker 2 23:16

direct arrangement, but those tend to not scale effectively. So buyers will supplement those deals with other inventory. Yeah, and that's purchased through an open exchange. Yeah, now there are benefits to SSPs, which is curating CTV inventory, which increases your scale, mm-hmm. It gives you protection from untrusted sellers in many cases, pricing flexibility and, as Mark, you talked about bidding, programmatic auctions right, that's all good.

Speaker 2 23:47

Now the risks of this, though, is advertisers can't be sure what exactly they're buying exclusively from. Yeah, that's right. Are they trusted sell-side partners? Maybe not all of them from? Yeah, that's right. Are they trusted sell-side partners? Maybe not. All of them are Reselling. We're also noticing in the space and there's others that track this way better than I do, but we're seeing that they it's most common supply chains operated by OEM device manufacturers, tv manufacturers yeah, that's right, and you know those channels, as everybody talks about, function as large ad networks. So if you're a buyer, you have to expect that there's going to be a degree of reselling in that. So the problem here in the bottom line is that buyers could end up bidding highly in packages that include only some premium inventory.

Speaker 3 24:35

Yeah, but they're paying premium price include only some premium inventory? Yeah, but they're paying premium price.

Speaker 2 24:44

Correct Is your point. So the Jones presentation was awesome. These guys were also saying listen, everybody run head to head tests. Yeah Right, have them do a competition of who can compete on curation, the most transparent reporting and securing inventory at the lowest price for the best possible premium content. Smart, yeah, it is. It is so. I saw just some highlights from the presentation. Mark, I was not able to get a copy of it. I did reach out to the person from Jounce who presented. I haven't heard back as yet. Yeah, as of yet. But if I do, I'm going to put a link up, because even the highlights and all the numbers from the presentation were incredible, super interesting to link up, because even the highlights and all the numbers from the presentation were super interesting.

Speaker 3 25:23

Yeah, yeah, the um. Yeah, the website is jounce media, so j-o-u-n-c-e mediacom.

Speaker 2 25:26

Uh, yeah, it looks like let's go into some more sports stuff here, mark uh, so fubo, they've dropped monumental sports network, so both companies were negotiating, couldn't come up with a contract or new contract to reach a deal, so this impacts WNBA, NHL and NBA. So never good there. Loss of content. Let's go into Venue Sports. Venue Sports has announced officially announced its founding leadership team based in New York and Los Angeles. So you and I talked about, you know, we knew some people who had been hired.

Speaker 2 26:03

I didn't want to give out any names. Their press release now actually lists the names of everybody, the seven or eight individuals on the founding leadership team. In addition, there's over 150 engineers and executives dedicated to building out the product, mostly from Fox and Disney. In the press release they did not mention any additional details on launch date, other additional details on the service which I can't speak to at this time. The founding leadership team had previously worked at Apple, paramount, global, disney, hulu, fanduel, siriusxm, fox, the Los Angeles Rams, cbs, sphere Entertainment, viacom. So the executives they've put together have on just the service and pricing and launch. So keep an eye on that. Let's move on to Mark. This was pretty funny, so you know I got to laugh at all these organizations that are out there that are so-called protecting consumers. Oh, thank you for protecting the watchdog group.

Speaker 3 27:21

I've never heard of it. I really needed that.

Speaker 2 27:24

Yeah, so a group of 11 watchdog organizations is called on the DOJ.

Speaker 3 27:29

Well, that's the first problem. Watchdog organizations yeah, watchdog. Well, it gets better when I explain who they are. All right, yeah yeah.

Speaker 2 27:42

So they're asking to probe Alphabet to determine they're not even saying this is a problem just to determine whether or not YouTube is using anti-competitive tactics to dominate viewership on TV screens. And they're saying the reason that there might be questionable means going in here is that TVs come preloaded with YouTube on it. That's their entire argument.

Speaker 3 28:03

That's the argument there's nothing else.

Speaker 2 28:05

Yes. Reading the letter you're just like what. So you know the example I gave was you know Apple preloads the stock app on my phone. Yeah, I don't see TD Ameritrade or Charles Schwabnick or anyone else going. Well, we can't fairly compete for giving people's quotes and trading.

Speaker 3 28:25

Yeah, or Yahoo Yahoo stock. You know which is a widely used app? I mean Yahoo finance, yeah, finance, yeah, yeah, yeah, yeah.

Speaker 2 28:34

So to me, that's insane. Now YouTube came back with just a very quick rebuttal in a letter. Yeah, and they just said when it comes to streaming video services like YouTube, there's so much competition in the market, there's so many services out there. You're not locked to our platform. By the way, most of it is free in the us. I've got a list of at least 100 services, large and small, niche, right, yeah?

Speaker 3 29:02

this is just there's a lot of choice in the market this is just yet again some, some, some lawyers, somewhere, you know trying to trying to drum up fees by going after google.

Speaker 2 29:14

I mean, yeah, now mark I I looked at these 11 watchdog organizations.

Speaker 3 29:18

Yeah, you can't get any information on them, right?

Speaker 2 29:21

Well, I thought, okay, some of these must be tied to technology or applications or content. So one of them is social security works, and I'm like wait what? So I looked them up Now. Social Security Works focus is quote to protect and expand Social Security, medicare, medicaid, lower drug prices. What are you doing? Talking about YouTube? I don't understand. It's just lawyers.

Speaker 3 29:52

Dan, it's just lawyers. Man, it's just lawyers.

Speaker 2 29:55

Now here's the other thing is I thought it was interesting in that half the orgs on that list, five or six of them out of the 11. Yeah, when I went to actually dig up in terms of where they get their money some of them. Some of them, not all, some of them will not disclose publicly their funding sources, Of course. So I'm like come on, guys.

Speaker 3 30:16

Nothing to see here, yeah.

Speaker 2 30:18

Social security is now fighting for our YouTube streaming something or other. But, yeah, you know.

Speaker 3 30:28

Can you imagine being the poor junior lawyer who just graduated from law school, who's in the Google team and you know they're assigned to this and they're like come on, boss, give me something more to work with.

Speaker 2 30:41

Maybe that's good right, Maybe it's easy to do away with.

Speaker 3 30:43

Yeah, exactly. No, I mean, I'm saying that because I mean, come on, this just is so flimsy and so ridiculous. You know the claim.

Speaker 2 30:52

Yeah, and that's also. Here's the other thing. It's not a claim.

Speaker 3 30:55

Yeah, that's right, it's a. Yeah, I thought it was interesting.

Speaker 2 30:57

They're not saying hey, doj here's information on what they're doing wrong. They're just saying would you mind looking at this to see if they are? Yeah, oh, geez, so we'll watch that. Hopefully nothing comes of it.

Speaker 2 31:09

One more thing with YouTube is YouTube has come out. Well, no, let me rephrase that oh, yeah. Let me start with the issue here. So some users it started on Reddit were expressing their frustration after they signed up for premium plans because they use a VPN to purchase it. So what they're realizing is, if I sign up to YouTube premium and I use a VPN, it looks like I'm coming from Ukraine. I'm only paying a couple of dollars a month, yeah, yeah, so youtube has noticed this and it's canceled their premium plans, which, frankly, is fair.

Speaker 2 31:41

Sure, right, just come on, okay. Um, now youtube won't go on record to discuss it, but a google support agent told pc magazine that this has been happening, not sure for how long, but if you've falsified your signup country information, uh, we're going to cancel your account and you're going to get an email and in-app notification. Your plan has been canceled. So this has been going on for it looks like a few weeks. Uh, you have some users complaining about it, but uh, you know, you got to expect. It's going to happen at some point.

Speaker 3 32:14

Yeah, it would, it would. It would be on a Reddit that this would come up. That's where it was first noticed. Yeah, exactly, and then.

Speaker 2 32:22

PCMag was able to get someone in the support team to actually give them something. Yeah, yeah, final piece here. Mark, we're doing good on time. It's StackPath.

Speaker 3 32:31

Yeah, that's right.

Speaker 2 32:32

So StackPath announced it's shutting down the company. It's going to liquidate its assets. For those that maybe know StackPath from the last let's call it year, when StackPath exited the CDN market and it sold about 100% of its enterprise contracts to Akamai. That was StackPath just getting out of the CDN space, but the entire company is now going to be shut down. But the entire company is now going to be shut down. So employees started posting comments on LinkedIn last week about this and I didn't publish anything, mark, because I couldn't get confirmation, so I didn't want to throw it out there. But the company has now, which put in part of the $400 million in their last round of funding. Nobody wanted to touch it at all. So for those that don't know sort of the history of StackPath, it was started in 2016. There's really 2017. The company raised $180 million and they acquired Mac CDN. For those that remember that name, back in the days it was a CDN set up for SMBs Fireblade, which was a WAF provider, cloak offered VPN, and Staminas, which did DDoS. So they acquired four companies launched a stack path with that $180 million. In 2017, company acquired another CDN Highwinds. Highwinds had already acquired BandCon, if you guys remember those names. Then, in 2017, stackpath merged with Server Density.

Speaker 2 34:19

In 2020, stackpath raised sorry, not $400, $216 million in a Series B from Juniper and Cox to get into edge computing. Juniper and cox to get into edge computing, but you know, like many mark, they felt edge computing was going to take off because of quote iot 5g and ott video. Yeah, right that that didn't happen. Stack path I'm not going to go into details here. Um, stack path had a lot of management problems In a four-year period five-year period they had four different CTOs, maybe more. You can't be swapping out your CTO every year. They had no clear go-to-market strategy. They didn't understand what customers needed. They called themselves the world's first platform for providing compute and services at the edge, which, of course, they weren't.

Speaker 2 35:12

Now, for those that don't know and this goes back to the history of the company Eero, which is the Wi-Fi mesh that is now owned by Amazon before Amazon bought it, when you got Eero and you brought it to your house and you set it up, if you wanted a extra level of protection from a network traffic management standpoint, you paid a monthly fee. That was StackPath's technology, so StackPath got the largest percentage of that money. You paid every month to Eero if you signed up for it, and that was one of the things that StackPath was really banking on to grow its revenue. But that option completely disappeared because in 2019, amazon bought Eurow and that went away. So there was a lot of issues with management.

Speaker 2 36:02

I hosted multiple meetings with some of StackPath's management from 17 to 19. Let's just say it was not impressed. It won't go into other details. Just there was not leaders there. You had people who really didn't understand the market. You had a lot of egos at play. So super unfortunate.

Speaker 2 36:23

Now I last talked to StackPath's management team I'm going to make this clear in 2021. So the new management team they've had there in the last three years, I don't know them. I think I had one call with the CTO and that was it. So my reference to management not doing well it's not a bad eye in the employees. I think by the time new management came, I'll be honest, I think the company was already cooked. I think it was too late. So StackPath did send out its last invoice to customers on June 12th. I think that's kind of interesting, like, hey, customers pay your last invoice, but oh, by the way, they're not offering any technical support None. So that's a really crummy way to close down a business because you're giving customers no notice and it's like hey, go move your stuff. But, by the way, we're not offering technical support.

Speaker 3 37:14

Oh, oh, and here's what you owe us Right Pay your last bill, that's just look, look guys, common sense.

Speaker 2 37:21

If you want people to pay your last bill, help them with their migration Like who is running these businesses that they can't figure out, that you have to put the customer first. Yeah, yeah, we're relentless in customer experience, at all times.

Speaker 3 37:36

Yeah, it's crazy. I mean what CFO in their right mind on the customer side is going to be like. Oh yeah, let me prioritize paying the stack path invoice.

Speaker 2 37:45

It's going to be like you know they're going under.

Speaker 3 37:47

Yeah, yeah Like.

Speaker 2 37:56

Now you should still pay what you bought, of course, of course we're not. Yeah, absolutely Right, be fair. Yeah, but at the same time, now you're not going to give me maybe enough notice and you're not going to provide tech support. Now, the other thing I can't find out, mark, is when does this shut down? Yeah, no-transcript, which is unfortunate. I don't know how many employees they have, but it's hundreds. Yeah, sure, we're now going to have to find a new job. I don't know what they're doing with severance, if anything. Yeah, but unfortunately it goes back to.

Speaker 2 38:42

You had some. Some companies like Cox and Juniper invest in some extremely poor management people who I'm not going to call leaders because they weren't, and you got greedy, those investors. And oh, Edge Compute's going to be so big and it's going to do ridiculous and this is the best company in the world. And here's all this money we gave them. So, of course, they go out and hire a ton of people who are really being set up for failure, because I could have told you four years ago this company couldn't make it. Yeah, and nobody wanted to buy it, even at a fire sale. I mean, I'm not going to go into some of the prices I heard from other vendors, but even at a fire sale nobody wanted to touch this.

Speaker 3 39:20

Yeah, so what does that tell you? Did they not want to touch it? Because, you know, just frankly, there wasn't really any value in the technology, what they had built or was it. Yes, pretty much Okay, so setting all the organizational issues, leadership aside, if you just looked at what's the Exactly but Get rid of all that yeah. You look at the product and you say, well, wait a second. What is?

Speaker 2 39:46

the intellectual property.

Speaker 3 39:47

Yeah, what do they actually have?

Speaker 2 39:48

What are the size of the customers, what are the lengths of the contract? But they never really got anything off the ground. Also, even their CDN business. With StackPath they were doing a lot of NNTP traffic Right. Most people probably won't know what that is Network News Transfer Protocol. That stuff is so old and outdated that no other CDN supported and that's why they kept it going, because they could charge a premium. They could charge a premium so they were getting paid, even on the CDN side. You know they would call it CDN revenue, but you know what it was. It was transit from BandCon.

Speaker 3 40:22

Oh interesting, which they had acquired.

Speaker 2 40:24

So their CDN business was actually a lot smaller than people realized. But no, from what I was told, I didn't look at the assets I'm, of course, not a network engineer either or software developer but from the vendors who, if I mentioned any of them by name, everybody would know.

Speaker 3 40:41

Yeah, sure.

Speaker 2 40:42

Who took a look at this just said there's nothing here worth buying, even at a fire sale price, even fire sale, yeah, the tech just doesn't make sense.

Speaker 3 40:53

So at a fire sale price? Yeah, the tech just doesn't make sense.

Speaker 2 40:54

So it's unfortunate to the people now have jobs. Sounds like they didn't get a lot of notice either. Um, which is always a shame, but uh, anyone working there, you know I I would be surprised if they're that surprised. This happened Cause even in some of the comments people left Mark and later in my post they were like yeah, we saw. Saw poor management, we saw lack of leadership.

Speaker 3 41:13

Yeah, yeah, you're, you're. The comments on your post are are really interesting because, um, you know, they pretty much nearly 100 line up, uh, and validate and even go a little bit further in offering you know details from employees and from those who are close enough to the company to say yeah, your analysis is correct.

Speaker 2 41:38

Yeah, it's a shame. It is a shame it's business. Yeah, exactly, Happens. So, Mark, that's what we've got this week. What do we got next week? Next week, I'll be doing my recording of the CDN Focus podcast.

Speaker 3 41:49

Yeah, yeah that's going to be good. I next week I'll be doing my recording of the CDN focused podcast. Yeah, yeah, that's going to be good. I'm looking forward to it. I'll have a lot of calls, I'm sure you are Just customers out there.

Speaker 2 41:56

I'm going to mention customers by name. I've got a lot of information I can talk to now, a lot of the calls I'm doing. I can't discuss specific pieces of data, pricing and whatnot, but some calls have been on background, some off the record, but a lot have been. Yeah, here's what's going on. Yeah, amazing. So that should be interesting. I think I'm going to drop that mark on July 1st or 2nd, so just before the holiday. Okay, cool, and then we'll be back next week with our weekly podcast. I think we're pretty good for the next few weeks. Yeah, we'll stay in a regular schedule. That's all we've got.

Speaker 2 42:29

So anyone has any questions, let Mark and I know Everything we talked about, especially all those numbers and TV viewing. It's all up on LinkedIn. Just go search under my posts. I think that's about three days old now. They put that up. You can also find it on my blog at streammediablogcom. That's actually the lead story right now that I have up is the TV viewership. It's another way to get it. Hope everyone has a good rest of their week. If you need anything, reach out to Mark and I. We're always available. We definitely take pride on the fact that we're always available to the industry.

Speaker 2 42:59

So if you have a, question anytime, reach out, stay safe, everyone be well and we'll talk to you next week. Thanks for listening.

Speaker 1 43:08

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 Dan's blog at streamingmediablogcom.