Specialist
Former Head at Amazon Studios (Amazon.com Inc)
Agenda
- Amazon's (NASDAQ: AMZN) operating environment – content spend expectations and Prime flywheel strategy
- Content catalogue – original vs licensed and film vs episodic, plus potential production delay impacts
- International distribution growth outlook
- Outlook for 2020 and beyond – content expansion investment opportunities such as sports and live programming
Questions
1.
What trends and drivers do you think have been impacting the overall operating environment for TV and film the most lately?
2.
You mentioned certain players have different ecosystems that they’re trying to drive forward. Could you run through those players and your thoughts on their content strategies? What nuances should we anticipate?
3.
Do you think the nuances within the ecosystem also have an impact on how aggressively companies want to spend? You compare Disney with a bleeding pay TV sub-base and advertising fundamentals seeming pretty negative. Peacock might have some benefits from Comcast, likewise HBO Max from AT&T.
4.
How challenging do you think it will be to find the next big hit? What is going to be the next Game of Thrones? You noted Amazon working on Lord of the Rings and The Boys being something that’s taken off lately. Every network seems to have a show that’s experimenting with that, such as The Mandalorian or the expectations around Narnia. How high is the execution risk to come out with a huge, branded franchise, or the next big cinematic hit?
5.
Disney is extremely tied to a pay TV bundle that’s bleeding in terms of both cord-cutting and advertising. Do you think that will cause the company to spend even more aggressively on streaming? Can it shut off network-type content spend, or will that have to be an incremental expense as it weathers the transition?
6.
How daunting do you think the coronavirus-driven production delays could be? Would a potential second wind-down of Hollywood lead to content slate gaps? You mentioned Disney launching with only one show. Is this situation going to benefit Netflix, which has a very broad library relative to peers? Could it be the only one left unscathed?
7.
Is it safe to presume that aggregate content spend is likely to continue rising over the next 5-10 years? We’ve talked about building out the library and racing for the next expensive big hit. Is there anything that could cause any player in particular to reduce spend?
8.
Do you think third party-licensed content deals are going to slow down due to studios being more inclined to go original and put the content they produce on their own streaming platforms? You mentioned that you’d expect less original content from Amazon.
9.
As streaming platforms get more mature, is there anything in the content catalogue you think will be unique? How important is episodic vs film content or unscripted vs scripted series? Are there certain categories within episodic that will drive subscribers to stay on the platform long term?
10.
Do you think that movies such as Mulan and Trolls are needed as premium IP to create an opportunity to monetise elsewhere in the ecosystem, but are also loss leaders for platforms in the sense that they need critical subscriber uptake to make their money back?
11.
Do you think there’s a way that Amazon can improve the annualisation of the subscriber? If a subscriber is only there for a particular show such as The Boys, is that a good way to keep them on the platform and paying for more months on average?
12.
It seems a lot of ex-US growth will be important, especially for new entrants to not continue bleeding money. Netflix, for example, has operating margins in the teens. How are you thinking about the international success factors?
13.
Is there a chance that a number of these platforms will end up not getting the critical scale or won’t drive sufficient engagement points around time spent on the platform, meaning they have to revert to a studio-only model without the platform elements? How should we think about the long-term dynamics if the market is too crowded?
14.
You mentioned further network consolidation is likely once the pay TV bundle breaks, and it’s just dependent upon how many years away that is. Do you expect M&A by market leaders or companies willing to compete and take risks, or is that something where players such as Discovery, AMC Networks and other fringe networks are too late to the game, and will just get even further isolated? How much more network consolidation or content acquisition can likely occur?
15.
Is there anything you feel we might have missed that you want to make note of? Do you have any closing remarks?
