☀️Music Labels show SPOTIFY where the profit is in Q2 streaming biz
WSJ joins Ad uncertainty as Sub growth is up / Harry tops Beyonce in week 1 #s / EZRA MILLER gets new VT court date
Mornin! This is Sean McNulty and here’s the Hollywood + Media news to know on TUESDAY August 9, 2022.
Where it was a day of loss across various sectors of the industry yesterday as I’m sure you’ve heard. While “Grease” is certainly the big headline for OLIVIA NEWTON-JOHN, she was also really one of the biggest pop stars in the US at the turn of the 80s. With music videos that definitely… embody a moment in time.
But as a pop fan you can’t argue with the music itself - “Make a Move on Me” is a personal favorite and still active in my music collection. Plus the keyboard guy in this video is just completely in his own zone 🙌.
Rest in Peace Olivia, and thanks for all of the memories that will continue to live on.
PLUS: Rest in Peace wishes also going out to:
Legendary Entertainment lawyer Bertram Fields, who died at age 93 after decades at the center of some of the most famous legal cases in Hollywood (Katzenberg v. Eisner / Disney, the Cruise v. Holmes divorce case and too many to mention really).
Noted Pulitzer-Prize winning historian David McCullough who died at 89 on Sunday, less than 2 months after his wife passed away. Among David’s many contributions to society were many books that became historical cannon, about topics from The Brooklyn Bridge to John Adams, and voicing several docus for PBS as well, including Ken Burns’ “Civil War”.
STATUS: Anne Heche is apparently listed in “extreme critical condition” and is in a coma with significant pulmonary injury from her fiery car crash.
ELSEWHERE: Harry is still on top for 2022, as BEYONCE’s 332k first week “album equivalents” came up short vs. the 521k “album equivalents” for HARRY STYLES first week, but they’re now comfortably in the #1 & #2 slots in 2022 thus far.
BTS (“Proof”) is 3rd at 314k, and KENDRICK LAMAR is 4th at 295k (“Mr. Morale & the Big Steppers”)
BUT: BEYONCE did get her first #1 in 14 years since “Single Ladies” in 2008 on the Billboard HOT 100 with “Break My Soul”. She had 5 #1 hits on her own from 2003 to 2008.
IN THIS EDITION:
WSJ reports impressive Digital subscriber growth… as Print takes sizable hit, and Ad Revenue has minimal growth.
Ezra Miller’s day in court set in VERMONT on new charges.
TIKTOK’s new TICKETMASTER ticket sales partnership. 💰
A look at Revenue & Profit at the Major Music Labels in Q2… vs SPOTIFY.
HBO sets high profile industry-based pilot with Sam Mendes and Armando Iannucci, and more.
📽 THE SILVER SCREEN
JUST TWO THINGS
“The Flash” star Ezra Miller was charged with Burglary by the VT State Police, regarding an incident in May where it sounds like they’re being accused of breaking into an empty house and stealing some booze. Their hearing is Sept 26. /Deadline
Filmmaker Lars von Trier announced he’s been diagnosed with Parkinson’s disease at age 66. /THR
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📝 IN OTHER WORDS…
“Like two years ago I had a weird, super-rare form of vasculitis that knocked out my vision, knocked out my hearing and knocked out all my equilibrium.
It took me like a year to build it all back up again.”
- ASHTON KUTCHER on an upcoming episode of NAT GEO’s “Running Wild With Bear Grylls: The Challenge”
📺 THE TV SET
PEACOCK sets Kaley Cuoco to star in comedic thriller series
Called “Based on a True Story”, about a realtor 🏡, a plumber 🔧 and a former tennis star 🎾 whose lives collide in some way involving an obsession with true crime and.. a slow-close toilet seat 🚽.
Yeah that’s all we got, other than it’s based on a bizarre true story. Kaley’s playing the realtor (though gotta say - playing the plumber coulda been a lotta fun).
Cuoco’s deal has a carve-out to do “Flight Attendant” season 3 if that happens at HBOMAX. Jason Bateman is among the producers, Craig Rosenberg (“The Boys” EP) is showrunning. /Deadline
ABC orders “Will Trent” drama to series for midseason
It’s about an agent in the Georgia Bureau of Investigations (GBI) who focuses on cases in the foster care system, having had a harsh coming-of-age growing up in it himself. /Deadline
ALSO IN TV
HBO ordered a pilot from Armando Iannucci (“Veep”) and director Sam Mendes called “The Franchise”, about a crew ‘trapped’ inside the dysfunctional world of making a superhero movie. Iannucci created the story with 2 of his “Avenue 5” writers, who wrote the pilot script. /Deadline
IN THE HOLLYWOOD EXECUTIVE SUITE
BUZZFEED hired MTV / VH1 exec Paul Ricci to head up their Unscripted division (including for TASTY, HUFFPO & COMPLEX brands). /THR
TODAY IN ICM DEPARTURES: Head of Music Robert Gibbs is joining UTA as a partner and co-head of their Atlanta office with the folks at KLUTCH SPORTS GROUP which partnered with UTA about a year ago. /Deadline
💻 THE MEDIA BIZ
AXIOS sells majority stake to COX ENTERPRISES at a $525 Million valuation
Not bad for a company founded 5 years ago. The 3 principals (Jim VandeHei, Roy Schwartz, and Mike Allen) will stay on to still run the company, and have financial incentives & will keep minority stakes to continue doing so as part of the deal.
COX’s exact majority stake % was not disclosed in the all-cash deal, but it will control the AXIOS board.
AXIOS has over 2.2 Million subscribers to their 34 free newsletters.
Of note - their AXIOS HQ product is not involved and will be spun off into a separate entity. This is essentially a software product that companies pay $10k (ish) a year for, to AXIOS-ify the style of their own internal & sales communications.
🙋 Um, is this COX like the cable company? Yes one in the same. It’s a private, family held company primarily based in the Cable TV business in the South… thought to be about the 6th largest TV & Broadband provider in the US (roughly 3 Mil Cable TV subs, and 5.5 Mil Broadband).
But their roots were in newspapers, and they still own The Atlanta Journal-Constitution among other smaller outlets.
Some comps (ish):
Morning Brew sold for $75 Million to German media conglomerate AXEL SPRINGER almost 2 years ago.
Politico (the company AXIOS founders left to found their company) sold for $1 Billion last year… also to AXEL SPRINGER.
The Athletic sold to the NY Times for about $550 Million back in Feb.
So yeah this is a pretty pretty good deal. Well for any equity stakeholders in AXIOS at least.
NBCU and Laurene Powell Jobs’s EMERSON COLLECTIVE were early investors, as was COX itself.
This valuation is about 5X their projected 2022 revenue of $100 Million… although the company will not be profitable this year due to business investments in things like AXIOS HQ, and expanding into more local editions (they currently have newsletters for 24 local markets, with plans now to expand to 100 in a few years).
COX is committing an additional $25 Million in cash for growth for that local expansion, and into paid products in Tech and Politics/Public Policy. /NY Times
RECODE’s Peter Kafka had a #goodread this morning about how AXIOS makes a good deal of their $$ - namely PR advertising from Big Tech and others looking to influence folks on Capitol Hill.
He also cites that AXIOS cleared $4 Million in profits on $87.5 Million in sales in 2021, with some week-long Ad campaigns running $300k.
WHAT DOES EACH PARTY GET?
AXIOS:
A well financed majority investor with a steady large profitable revenue stream in the Broadband business to weather headwinds.
A parent company with roots / DNA / knowhow in the news business, combined with a stated ambition to invest.
COX:
A highly respected & revenue-diversified news brand with an upscale subscription business that they don’t have.
A vehicle to branch out & grow into markets nationwide… without the encumbrances of a print legacy business to drag it down.
A way to establish a new 21st Century beachhead with DNA in the company’s century+ old roots in the news business.
Whether that’s worth the price they paid… well that’s for them to decide. COX is a private company so they won’t need to declare anything publicly on a quaterly basis, as with The Athletic and The New York Times.
WSJ & BARRON’S see advertising growth slowdown, but big growth in digital subs
Advertising in the DOW JONES group grew $13 Million or 13%… but $9 Million of that was due to Q2 this year having an extra week. So - subtract that and $4 Million annual growth isn’t too hot 😬.
But subscription wise, both publications continue to have impressive growth. Well at least in Digital. Print… not so much:
WSJ:
DIGITAL: 3.1 Million (+14%)
NOTE: This is about half of the NY Times main digital news product subscriber count.
PRINT: 655k (-11%)
TOTAL: 3.75 Million (+8%)
BARRON’S
DIGITAL: 848k (+21%)
PRINT: 190k (-13%)
TOTAL: 1.04 Million (+13%)
WARNER MUSIC rounds out Q2 earnings for the Major Labels
All of whom continue to make most of their money from digtial streaming platform revenue. Anyone inclined can dive into the link to the report above for minutia, but bigger picture here:
While SPOTIFY lost nearly $200 Million in Q2…
UNIVERSAL MUSIC: Revenue +17% YOY, $760 Million in first half of 2022 profit
SONY MUSIC: Revenue +11%, $471 Million in Q2 profit
WARNER MUSIC: Revenue +13%, $92 Million in Q2 profit
At WARNER specifically - Streaming revenue made up almost 80% of their Q2 recorded music revenue.
While yes, SPOTIFY is a dominant global business that is still growing their user base significantly… most of the money SPOTIFY makes still goes right back to the Music Labels.
Even at SPOTIFY’s immense scale, to date - there is just no real money to be made in a Music streaming service.
SPOTIFY Q2 Revenue was +23% vs a year ago, but still:
SUBSCRIPTION (ie most $$ goes to labels): $2.5 Billion
ADVERTISING (ie money that SPOT can keep): $360 Million
Q2 Loss: -$195 Million
The other 2 dominant players APPLE MUSIC & AMAZON MUSIC of course do not disclose figures, but given their ecosystems one has to think both see them as loss-leaders for other business priorities.
Hence SPOTIFY’s continued attempts at Revenue diversification into Podcasts, and efforts to raise Advertising revenues (which did see an impressive jump in Q2). Both of which are revenue sources they get to ya know, keep the money from. Although to note - SPOT’s Podcast revenue or profit / loss has yet to be specifically disclosed.
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ALSO IN MEDIA
TIKTOK partners with TICKETMASTER so accounts can sell tickets to their events directly through the app. Hmm. Is music popular on TIKTOK? #bigMoney 🤑 No word on the cut TIKTOK will get from purchases… but could very easily be a nice lucrative new partnership for them. /Tech Crunch
Rural Cable company CABLE ONE also sees a Q2 Broadband subscriber drop, and continued large TV cord-cutting:
BROADBAND: 1.06 Million (-4% vs a year ago)
VIDEO: 221k (-23% vs a year ago)
🏦 STOCK NOTES
AMC THEATERS +8% ($23.96) #MEMEstockers strike again
CINEWORLD -7% ($0.25) Have they considered offering a NFT-linked stock?
BUZZFEED +6% ($2.00) Some feelin-lucky investors putting some money in before today’s earnings report
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👩💻 NEW TO READ:
Michael Mann’s “Heat 2” book drops today. Mann said on the WTF pod that he’s closing in on a film deal soon for it (likely mostly a prequel situation).
👩💻 NEW TO WATCH:
HBO “Hard Knocks: Training Camp With the Detroit Lions” at 10p
🎥 TRAILER HOUSE
HULU / ONYX “Reasonable Doubt” teaser trailer - About a lawyer in LA managing a career while her marriage begins to hit the skids. PREMIERES THU SEPT 27
NETFLIX “Untold: Operation Flagrant Foul” docu trailer - Latest in their UNTOLD series, this time looking at the mid 2000s NBA scandal where Ref Tim Donaghy was placing bets on games he was uh, refereeing. Which is apparently frowned upon. PREMIERES TUE AUG 30
🎧 PLAYING ME OFF
New MAISIE PETERS “Blonde” this is just kind of a fun pop breakup revenge song.
If you need some new tunes:
Email me anytime at seanmcnultynyc@gmail.com or connect here on LINKED IN.
-SEAN MCNULTY
@theseanmac on TWITTER
@TheWakeupNews on INSTAGRAM