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Disney+ Is Coming

When all the fellow streaming platforms are adding their original content capacities, on April 11, the biggest original content provider Disney Group finalized the pricing ($6.99/month) of its own streaming platform, Disney+. And the official US launch date is later this year on November 12.

Disney+ pricing | Source: Disney investor day presentation

Disney’s preparation and acquisition of BAMTech

Disney’s plan to launch its own streaming service has been around for quite some time. Its first official announcement was in August 2017 with Disney’s acquisition of an additional 42% of BAMTech for $1.58 billion, which gave Disney a controlling stake of 75%.

Source: disney.fandom.com

Before that, in August 2016, Disney acquired 33% of BAMTech (a spin-off from MLB’s broader digital business, MLB Advanced Media) for $1 billion.

BAMTech is the streaming technology provider for services including HBO NOW (launched in March 2015 with Apple being the exclusive launch partner; and Apple was promoting its Apple TV), National Hockey League (NHL), Major League Baseball (MLB), etc.

Disney Chairman and Chief Executive Officer Bob Iger talked about the streaming service on the BAML conference in September 2017.

What we’re going to do with the Disney direct-to-consumer app or platform is, first of all, we’re going to launch it in late 2019. We’re doing that for 2 reasons. First of all, as we exit the Netflix output deal, we don’t get access to our theatrical release movies until the beginning of ’19. Secondly, we wanted time to actually develop and build up original programming for the platform.

Following the 2016 transaction, Disney made plans to test BAMTech’s delivery and support of streaming video and other digital products from Disney|ABC Television Group and ESPN.

ESPN+ as a test-out

Following the 2017 transaction, Disney said it would launch its ESPN-branded multi-sport video streaming service in early 2018.

The new ESPN app and the ESPN+ service were launched in April 2018, provided by BAMTech. ESPN+ is priced at $4.99 a month or $49.99 a year.

What is different though, is that the content on ESPN+ is not a replacement of cable subscriptions (at least for now). ESPN Plus will not provide live access to ESPN’s main channels like ESPN and ESPN2 – you’ll still need a cable subscription to authenticate and watch. [TechCrunch]

new ESPN app and ESPN+ | Source: theverge.com

After all, ESPN is originally a cable business and sports are heavily rely on ads. ESPN+ is an ad-embedded streaming service (video ads).

In 10 month, the number of ESPN+ subscribers has reached 2 million.

On the other hand, ESPN itself (cable) lost 2 million subscribers in fiscal year 2018, with total subscribers of 86 million as of September 2018.

ESPN+ is expected to have 8-12 million subscribers by the end of FY 2024.

So Disney+ and its expectation

It will be one of (the most important one) the three pillars of Disney’s streaming services, alongside with ESPN+ and Hulu (will discuss separately).

Source: nscreenmedia.com

Its direct competitors are Netflix and HBO Now. Bob Iger has specifically said it would be priced lower than Netflix years ago.

Priced at $6.99 a month or $69.99 per year, Disney+ is $2 lower than Netflix’ new basic monthly plan. Netflix announced the new pricing for United States in January 2019 to replace it original $7.99/10.99/13.99 lineup, effective May 2019.

Netflix new pricing 2019 | Source: netflix.com

The contents are powerful, including Disney, Pixar, Marvel, Star Wars, and National Geographic, etc.

Disney+ contents | Source: variety.com & Bob Iger Twitter

It is targeting 60-90 million subscribers in five years, by the end of FY 2024 (September 2014) and 1/3 would be in the US.

Meanwhile, the Disney Channel has seen its subscribers ebb to 89 million, down from 92 million in fiscal 2017. [Variety]

And Netflix now has 148.8 million subscribers globally, 60.2 million from the US, as of 2019 Q1.

 

 

「Podcast of the Week」WSJ Instant Message: The Movies Come To You Now

We need more discussion on algorithms.. not only for social media feeds, but for jail sentences, racial bias and other sensitive issues.

To some extend, I think the ultimate justice should be “created”, not to be “applied” or “extrapolated”. If all cases are determined by algorithms, it’s gonna be a self-enforcing one and it will be hard to find what’s wrong.

Zoom, How Not To Underestimate Its Usefulness And Influence

Zoom went on Nasdaq with the IPO price of $36 (target range of $33 to $35 per share), opened at ~$65 and closed at $62 (up 72%), making it in par with Lyft.

Several things to note here:

    • Zoom is relatively young. It maintained high growth (2018 revenue of $331 million, 2017 revenue of $151 million) and is expected to grow fast.
    • Zoom is making a net profit in 2018 (~2.3% profit margin) and has maintained a high gross margin (~80%).
Source: Zoom SEC Filing. Author
    • Growth in customers – “As of January 31, 2017, 2018 and 2019, we had approximately 10,900, 25,800 and 50,800 customers with more than 10 employees.” they “represented 69%, 75% and 78% of revenue“
    • Market Size – In the US, business with
      • 10-19 employees: 46,635
      • 20-49 employees: 37,495
      • 50-249 employees: 23,065
      • 250 or more: 5,672
      • ~113k in total, so Zoom has another 50% room to grow (will be harder and more costly)

    • market penetration and growth opportunity in large enterprise customers – “greater than 50% of the Fortune 500 had at least one paid Zoom host, compared to only 4% that contributed more than $100,000 of revenue. We believe this demonstrates that our product has already gained a foothold in many of the largest enterprises in the United States, and there is a large opportunity to expand within these large enterprise customers”
    • Revenue per large enterprise customer will grow, easily – “Some of our larger enterprise customers start with a single deployment of Zoom Meetings with one team, location or geography, before rolling out our platform throughout their organization.” “As of January 31, 2017, 2018 and 2019, we had 54, 143 and 344 customers that contributed more than $100,000 of revenue in each of their respective fiscal years”
    • Zoom’s future depends on its business outside video conferencing; it could grow into an essential infrastructure for business operations; it could do more than video conferencing, but also scheduling, internal messaging and other management tools.

Zoom, Slack, Alibaba’s Dingding (DingTalk), WeChat for Enterprise will meetup in the future, in the battle of office app/platform.

Read More on Zoom’s IPO

Interesting…「Podcast of the Week」 Original Podcast Being Deleted…

So I was going to put an a16z podcast “Security’s Past, Present, and Future” as this week’s 「Podcast of the Week」…

Then on April. 23, I found that the podcast was deleted from all platform.

None of the links works now. (a16z, SoundCloud)

And I didn’t notice anything wrong when I listened…

Anyway, I will save this post for that podcast… as it has existed for around one week.

Notre Dame Fire, VR

On 15 April 2019, shortly before 18:50 CEST, fire broke out beneath the roof of Notre-Dame Cathedral in Paris. [Wikipedia]

When it comes to recover/rebuild the damaged masterpiece, the gaming industry will help.

The 2014 game ‘Assassin’s Creed Unity,’ set in Paris during the French Revolution, features a realistic 3D model of the historic house of worship. Caroline Miousse, an artist for the game, spent about two years perfecting the model of the cathedral that appears on gamers’ screens. [New York Post]

Notre-Dame Cathedral in the game | Source: theverge.com

Game developer Ubisoft also employs several staff historians to help dig up any extra details the development team might need. [The Verge]

The level of details not only makes Assassin’s Creed a great game, but also could help to save the history and the real world.

Another very helpful resource is from Vassar art historian Andrew Tallon’s work of exquisite 3D laser maps of every detail of Notre Dame.

In the past, we have many artworks digitalized but mainly for a paining or a sculpture I guess. The tragedy happened in Paris will remind us of many other things to be digitalized. In the future, VR games would probably need even more details and virtually serve as a permanent digital copy of our history. Expect much more “digitalization work” to be done in the next few years. We may even digitalize an event or a piece of time in the digital world.

It’s going to be similar to the “genome bank” to preserve what have existed in this world.

Inevitable Inflation: Yet Another Example From Starbucks Rewards

Having lived for 3 years, the current Starbucks Rewards program will end on April 15, 2019. The most direct comparison with the new program is the cost of “a free drink” – raised from 125 stars to 150 stars, a 20% inflation.

Starbucks Rewards April 2019 | Source: starbucks.com

Taking the previous revamp into account, from pre-April-2016 to post-April-2019, the program has been through 2 major changes with “points inflation” being the unchanged theme.

Let’s go back and do some calculation.

Program Redesign In April 2016

Starbucks Rewards has been through a redesign in April 2016, which transformed the transaction-based system into a value-based one.

Basically, before 2016, a $1.95 purchase is equivalent to a $5+ purchase in terms of stars earned (1 star; 12 starts = 1 free drink).

Starbucks Rewards revamp in April 2016 | Source: starbucks.com

Assuming a customer would use his/her stars for a free item with an average value of $5:

    • For a customer normally purchase an item of $2.5 to earn stars, the reward yield is approximately halved:
      • previously – 5/(12*2.5) = 16.67%
      • 2016 program – 5/(125/2/2.5*2.5) = 8%
    • For a customer normally purchase an item of $3.5 to earn stars, the reward yield is cut by 1/3:
      • previously – 5/(12*3.5) = 12%
      • 2016 program – 5/(125/2/3.5*3.5) = 8%

This change was resonating with a broader trend in “rewards” offered by consumer-facing industries such as airlines.

American Airlines is the latest major airlines that changed its rewards calculation from distance-based to money-based (announced in November 2015, effective August 2016)

United award miles redesign | Source: thepointsguy.com

Program Redesign In April 2019

As I mentioned at the beginning, the new program features a 20% inflation in terms of redeeming free drinks.

For dollar values, in the 2016-version, a Starbucks star is approximately worth 4 cents ($5/125); now, it is approximately 3.33 cents ($5/150). [to enhance the utility, one could order a venti drink and add a shot, making free drink ~$9 so a star is worth ~7 cents before and ~6 cents in the new program]

However, better yields could be found in hot coffee/tea.

    • hot tea usually has a price of $2.25/2.45/2.65 for tall/grande/venti size; simply taking it as a $2.5 value, a star = $2.5/50 = 5 cents
    • hot coffee (in brewed coffee category) usually has a price of $2.15/2.45/2.75 for tall/grande/venti size; in a venti size coffee, a star = $2.75/50 = 5.5 cents
      • there is a brewed product called Caffe Misto, which has a value of $3.35 for venti size, then a star = 6.67 cents
    • for lunch items, to make a star’s value above 4 cents, items needs to have a value of $8; and a $10 item for 5 cents value. Those items could be easily found in Starbucks’ new Mercato lunch category

The items above will maintain the value of stars and provide the valuable revenue diversification for Starbucks (especially for lunch items).

Plus, those items usually involve less manual work from baristas. They could enhance the overall productivity for Starbucks stores and increase the profit margin on average.

How [Languages] Disappear?

Just finished The World Until Yesterday by Jared Diamond this weekend and here is an excerpt I would really want to recommend, where you could literally replace “languages” with other words.

How do languages go extinct? … so too are there different ways of eradicating a language.

The most direct way is to kill almost all of its speakers…

The next most direct way to eradicate a language is not to kill its speakers, but instead to forbid them to use their language, and to punish them if they are caught doing so… the French government’s official policy is in effect to exclude the Breton language form primary and secondary schools…

But in most cases language loss proceeds by the more insidious process now under way at Rotokas… Young people in search of economics opportunity abandon their native-speaking villages and move the urban centers, where speakers of their own tribal language are greatly outnumbered by people from other tribal backgrounds, and where people needing to communicate with each other have no option except to speak the majority language…

Eventually, minority languages are spoken only by older people, until the last of them dies. Long before that end is reached, the minority language has degenerated through loss of its grammatical complexities, loss of forgotten native words, and incorporation of foreign vocabulary and grammatical features.

 

First Blackhole Picture And Copyright?

One big confirmation of our knowledge about the universe – the first picture of blackhole due to gravity is available.

target was a nearby galaxy dubbed M87 and its supermassive black hole, which packs the mass of six and half billion suns. Despite its size, the black hole is so far from Earth – 53 million light-years – that capturing the image took a telescope the size of the planet.

Meanwhile, a firm in China claimed the copyright of this picture and tried to charge fees for it.

The firm, called Visual China, is China’s largest stock images provider.

It shut its website and apologized on Friday after it falsely claimed copyright of images such as the first photo of a black hole and China’s national flag. [Reuters]

It is a time that China is doing more to protect intellectual property but company in this is embarrassing. It’s definitely not a representation of the “highest” level of IP protection in China, but it does show us that a lot of work needs to be done.