With Wall Street turning away from subscriber numbers to focus on profits and sustainable balance sheets, Peacock was known to be in an unenviable position. While all of the streaming platforms bar Netflix itself are still finding their way into the black, Peacock’s deepening losses and slow growth have been working against it for a while. With the news of another steep and painful loss for Q1, and no real sign of it turning around any time soon, does this mean Peacock could find itself on the chopping block as we inevitably see shrinkage in the streaming market? Blake & Wang P.A entertainment lawyer, Brandon Blake, unpacks the news.

$700M Loss

Unveiled as part of the wider Comcast earnings update, Peacock managed a staggering $700M loss in Q1 despite an upward turn in subscriber numbers. Now at 22M, a 60% increase on the same period last year, it wasn’t enough to match operating costs. Peacock’s revenue total was $685M, significantly behind the EBITDA loss of $704M.

2023 was predicted to be the peak of Peacock’s losses, and it seems they weren’t exaggerating! It’s currently estimated they could turn in an overall loss of $3B this year.

Overall Declines

While the overall Comcast balance sheet looked a little better, it still hasn’t brought anything to the table to get excited about. Overall we see their content and experiences division drop by 9.5%, with adjusted earnings ending flat. The studio division did see a 13% upturn, but the advertising division turned in a dull 21% drop on the back of a tighter advertising environment. With an unanticipated high-level departure in their ranks, too, it seems Peacock has a lot of ground to regain if it wants to make a case for itself as a true streaming competitor.

While execs were keen to write these dull returns off as just an expected part of the business, it’s hard to see a compelling argument for that competitiveness at present. Unless 2024 brings considerably better things for the platform, Peacock may yet find itself on the streaming chopping block.

Netflix have finally come to the table with more details about the much-debated password sharing crackdown. A move that resulted in a lot of poor press for them, converting to paid sharing at a time when they’ve already been buffeted by poor publicity sounds pig-headed at best- but luckily we have Brandon Blake from Blake & Wang P.A to give the entertainment attorney’s perspective on the matter.

Quarter 2 Rollout

The rollout will begin for the US market as of the second quarter. However, we have also seen them trial the password crackdown in Latin America from January this year, with considerable momentum through February as the replacement paid sharing option became available. At the moment, this plan is available in New Zealand, Spain, Canada, and Portugal. It allows for 2 active users outside the primary user’s home for a price between 3.99-5.99 Euros, or $7.99 CAD or NZD. What will the domestic price be? We’ve yet to find out- and you’d think they might have wanted better clarity on that matter with the rollout coming fast. All we know is that pricing, “will be higher in more affluent countries.” Fair? Possibly. Good publicity? We aren’t so sure! While the crackdown is, at the heart, merely an attempt to squeeze more profitability out of the same few subscribers, stating it so openly does leave a bit of a bad taste.

Pleased With Results

While the removal of a ‘service’ they once actively encouraged was always going to be problematic publicity-wise, especially with the oddly combative and blame-heavy spin they’ve put on it to the public, hey seem content with the results of the Q1 rollout to date. Acquisitions and revenue have gone up with the ‘extra member’ accounts (naturally) for the Latin American area, now growing faster than the US.

Is that really ‘growth’, however? Debatable, but Wall Street seems to like it, and also believe the paid sharing option will work in tandem with their new ad-supported tier to boost numbers. For now, we can simply wait and see what happens as more territories make the change.

Super Mario Bros has definitely been the unexpected hit of the 2023 box office so far. As an unpredicted side effect of this exceptional launch for the Nintendo franchise, we have now seen share prices for a range of top theatrical chains pop too. Entertainment lawyer from Blake & Wang P.A, Brandon Blake, takes a closer look at the news.

AMC Receives a Welcome Boost

Despite it’s now infamous ‘memestock’ boom, the AMC share price has been languishing as the box office recovery stalled at the end of 2022. Off the back of the surprisingly solid performance from Super Mario Bros, however, it saw a 7%, or 35c, boost to its share price. Cinemark achieved a similar benchmark. IMAX, which is one of the few theatrical chains to have seen very little disruption from the pandemic shutdowns, also saw a 5% ($1.05) jump. For Imax in particular, Super Mario Bros has also brought it the top opening of all time in the animation category, earning about $375.6M of the global takings for the film.

While the boost won’t manage to offset the pandemic disruptions entirely, the rise in stock prices will doubtless help the chains struggling with heavy debt after the pandemic closures. It isn’t a full return to pre-COVID numbers, but it is certainly a welcome breather.

The Video Game Surprise

And unlike the successes of films like Top Gun:Maverick and Avater:The Way of Water, this boom is rather unexpected. Historically, video game franchises like Super Mario Bros have not played well to audiences, and this may well be the first truly successful video game IP we’ve seen in a long time.

While a slump in product could still seriously impair the wider box office recovery, and with a slate that’s still smaller than is needed set for 2023, it’s another welcome sign that fans are keen to return to the theatrical experience. And that’s good news for the whole industry.

We’ve seen more and more locations enter the market in attempts to lure location shoots and film/TV projects to their locales over the last few years. Now it’s time to add Singapore to the pile, too. With the announcement of a $7.5M TV and Film Fund to court international productions that highlight the country as a travel destination, there’s even more scope for those looking for appealing shoot destinations. Blake & Wang P.A entertainment lawyer, Brandon Blake, has the details.

The Fund

Established as a joint venture between the Infocomm Media Development Authority (IMDA) and the Singapore Tourism Board (STB), the fund is accessible to all international entertainment/media companies making global content that will highlight Singapore’s appeal. Potential projects will be evaluated for market reach, distribution agreements, concept and ‘creative merit’, as well as how much focus on the area is shown on screen and how much local talent is used in credited roles. Successful projects will have up to 30% of qualifying costs (again with the ‘related to featuring Singapore’ caveat) returned, including marketing and production costs. To qualify, the project needs to launch by Q1 in 2027.

The Destination Boom

In fairness, unlike some of the tax incentives we’ve seen leveraged to attract location shoots both within US borders and internationally, the new fund has a limited budget and clear focus. But the Singapore On-Screen Fund, as it is being named, shares a common feature with other such incentives we’ve seen launched- the urge to get themselves a slice of the ever-more lucrative destination shoot boom. With an acceleration in ‘content creation’ across streaming platforms, it was inevitable we’d see the demand for shoot space increase, both for soundstages and location shoots. We expect to see even more incentives like this arise globally as the demand accelerates.

As we’ve seen with the meteoric appeal of The Last of Us to UK audiences via Comcast/HBO’s content carriage deal with Sky, a great content carriage deal can be a critical part of both growth and audience traction, especially for smaller platforms without the budgets to invest heavily in developing their own original content. With studios becoming more focused on retaining content for their own platforms, however, these deals have been harder to come by, but this week we see Mubi strike a fantastic deal with Sony Pictures for library content. Blake & Wang P.A entertainment attorney, Brandon Blake, has more focus.

The Unique Sony Position

With more and more of the so-called ‘legacy’ studios launching their own streaming platforms, Sony has chosen to take a different position. One that involves licensing its compelling library of content to the highest bidder (or, rather, several). The company is on-record as seeing this as a unique selling proposition for their coveted titles, allowing them to remain agile (and in the black) in an era where many of the newer streaming platforms are struggling to reach profitability. So far, it is working well for them indeed.

The Mubi Deal

Mubi, which also acts as a distributor and has even ventured into the production arena of late, also offers a unique theatrical deal with its premium Mubi Go service, allowing for a free movie ticket each week for a selected film in key locations through the US. This has made it something of a darling with Indie distributors, who have seen an uptick in audiences from the offer. It currently offers its base plan to US markets for $12.99 a month, or $17.99 with the Mubi Go option. While we have no clear subscription numbers for them, they do suggest a ‘community’ figure of around 12M members.

The new deal will see them add to the 900+ titles already on their US service with 50 new additions from the Sony library, mostly studio and arthouse fare. They add one new movie to the platform daily. Each Sony title will receive its own window, with some going to immediate accessibility and others cycling onto the platform through the end of 2024. No doubt this new haul from Sony, which includes cult classics like Close Encounters of the Third Kind, will be a fantastic drawcard for the service.

Despite lofty initial uptake promises, Netflix’s long-awaited ad-supported tier got off to a slow start at best. It seems the once-dominant streamer may yet see the envisioned profit boost roll in, however, as it’s finally showing some signs of growth and momentum. Brandon Blake, entertainment attorney with Blake & Wang P.A, takes a closer look.

1 Million Monthly Users

Despite mediocre growth at launch, stats as of last month suggest the cheapest ad-supported tier of Netflix has finally crossed the 1M users benchmark. At launch, the tier proved to be the least popular of Netflix’s offerings, pulling in only 9% of their new signups (and accounting for a rather grisly 0.2% of overall US users). Of those signups, 43% were users downgrading existing tiers to the cheaper plan, with 57% accounting for brand new users.

Luckily for Netflix, which has a rather uncomfortable 2022 overall, this did pick up steam across December and January, managing to net 15% and 19% of new signups respectively.

The Disney Benchmarks

It’s hard not to compare that uptake to that of the Disney+ ad-supported tier, however. Launching a month later than the Netflix option, it managed to take 20%, 27%, and then 36% of new signups in its first three months. The two streaming juggernauts should have had roughly comparable brand appeal, although some other unpopular Netflix decisions in the months before the launch may have impacted them more than expected- such as the removal of account sharing, a feature they once actively used as incentive to new customers.

While the addition of an ad-supported tier to the Netflix platform hasn’t proved quite as popular as anticipated, it’s still a big leap forward from that very cold start. It does seem unlikely it will ever manage the kind of ad-supported saturation entities like Hulu have, where 57% of their customer base opt for the AVOD tier, but at least it is finally delivering on its initial promises to advertisers. While the first 2 months saw ad campaigns on the platform barely reach 50% of promised viewers, it has also reportedly reached initial projection targets for campaigns with the added onboarding. At this point, we imagine Netflix is happy to take what it can get.

Shazam! Fury of the Gods may be the cornerstone of the new plan for the DC universe, but despite being the top film for this weekend’s Box Office, it’s failing to woo both critics and audience alike. Entertainment lawyer and resident Box Office expert, Blake & Wang P.A’s Brandon Blake, unpacks the rather sorry details.

Below Benchmarks

Pre-release tracking suggested the film would open to a $35M weekend, a rather low start for a superhero movie in the modern Box Office. While some optimistically pegged it for $40M, it’s failed both benchmarks, netting only $30.5M for its opening weekend. Needless to say, that’s quite a drop from the $53.5M opening the first Shazam! brought to the table. It could be on-track to be the first DC film outside of the pandemic to fail to reach $100M, but we’re sure that’s a record they could live without.

Dull Reception

While a second weekend boom is always possible, it doesn’t seem likely for the picture, either. It has failed to get much traction with the family demographic that is its key focus, pulling in a decidedly mediocre 55% on Rotten Tomatoes, too. It’s hard not to compare that to the 90% of the previous installment. Of course, it’s not purely to blame for that- families remain one of the most underrepresented demographics in the post-pandemic era. The serious fan segment seems to be skipping it entirely, and critics aren’t as kind as they were for installment one, either.

With a 60% drop for Scream 6, and Creed 3 still turning in a passable number but now in its third weekend, it was enough for Shazam! Fury of the Gods to take the title of the weekend’s best performer, the only other encouraging news is that Ant-Man and the Wasp: Quantumaniahas passed the $200M benchmark. Not quite what we were hoping to see from the 2023 Box Office but the year is still young, thankfully. Hopefully it will be upwards from here.

News that Paramount has rejected a $3B bid for their Showtime service has been dominating entertainment news headlines this week. The unsolicited offer for the service has been called ‘uninteresting’ by Paramount’s CEO, Bob Bakish, yet many streamers would have loved to see a similar cash offer on the table for a struggling smaller platform. Brandon Blake, entertainment lawyer with Blake & Wang P.A, shares the news.

The Uninteresting Price

So what was so uninteresting about the offer? It appears Bob Bakish and the Paramount team believe that the Showtime platform and customer base has more value to their overall path to streaming profitability than the offer can cover. Doubtless this has much to do with the upcoming merger of Paramount+ and Showtime’s business. Bluff or true belief? That’s still up in the air.

A Different BET

Paramount are, however, exploring a sell-off of a major share in the BET Media Group. While Bob Bakish still managed to dance around the question of whether the sell-off will happen for definite, it seems this one is still on the table. Interest from both Tyler Perry, BET’s longtime partner, and Byron Allen/Entertainment Studios, is said to be high. They will, however, keep both their commercial relationship as well as a minority stake in the asset should a deal manifest.

While Paramount seems committed to staying non-committal on any of these issues, many do wonder if their existing streaming stakes have what it takes to compete in a crowded market. Especially now the endless push for subscribers has cooled, and the focus of both studios and Wall Street turned to the ability to reach steady profitability. It’s inevitable we will see some of the glut of streaming services drop out of the race to profitability as belts tighten economically, and Paramount have been struggling to compete with giants like Netflix and Disney in the market. Will this cards-to-the-chest conservative strategy boost them over the wire? It will be interesting to see what results as the overall entertainment climate tightens up.