Activision Blizzard Files Lawsuit Targeting Netflix Over Hiring CFO

The CFO, or Chief Financial Officer, formerly employed by Activision Blizzard working for Netflix has generated a poaching lawsuit.

The quote in the article below I found curious:

“Netflix has a demonstrated pattern of caring only about attracting and employing whoever Netflix wants, regardless of whether it violates the law along the way,” the suit claims

Netflix sued by Activision Blizzard for allegedly poaching its former CFO – MarketWatch

Is the CFO that critical a person to allegedly poach from another company? Maybe for Netflix, that has had been in the hole financially despite the largest number of streaming subscribers, this is the perfect executive to target.

Could be wrong, but I think Netflix’ biggest problem is just making too much content. We’ve talked about this before (see: Does Netflix Release Too Many Originals? Maybe Ask New CMO Bozoma Saint John).

They seem to be following the strategy of throwing a lot of stuff against the wall and seeing what sticks. That perception might be wrong, but it sure appears that way and has given their originals somewhat of a black eye quality-wise, unfortunately.

Not sure how the CFO will change how much is spent on content, but being the Chief Financial Officer, surely this person would have some input on assets, liabilities and cash flow.

We’ll have to keep our eyes peeled on this lawsuit. My guess is it will be settled out of court of dismissed. Poaching lawsuits are rarely successful, it seems. Instead, competing companies tend to make unofficial deals with each other not to target each other’s key employees. I don’t think this would apply to Activision Blizzard, because they are best known for videogames, not what Netflix does.

No, Disney Should Not Buy AMC — They Should Cherry Pick Theater Locations

Empty theater seats are breaking major theater chains financially

Motley Fool is posing the question: Should Disney Buy AMC?

It’s linked in the quote below for full context. I’ve seen estimates that AMC is losing double digit millions per month. At that negative cash burn rate — assuming these are accurate figures — no sane business should or would buy them. Even a company as large as Disney.

And here to think Motley Fool is an investment website? The second part of their name applies to anybody at Disney seriously considering this deal.

More after the jump.

Certainly Paramount or Universal, or even Netflix and Amazon, as was rumored earlier this year, could also benefit from buying the theater operator. But Disney’s size, scope, and branding potential would make acquiring AMC Entertainment a blockbuster event.

Should Disney Buy AMC?

I’m on record suggesting that streaming channels should buy some theaters. They just need to wait until AMC goes into fire sale mode or full on liquidation, swoop in and buy up prime locations in key cities and states. Boom, now they’re in the theater exhibiting business, but on their own terms. They buy AMC in the shape its in now, it’s like buying a house that’s already on fire. Who does that?

As for Amazon and Netflix? You bet they should get in on the same deal. I think this is where the future of cinema is headed with studio-branded theaters. Paramount+ Theater, Amazon Theater, Netflix Theater and so on. It’s a great path to giving moviegoers the best of both worlds. They can day and date release whatever they want without a theatrical window. Burn that obsolete window down — except for the biggest of big budget films. In those cases, exclusively show them in theaters for a short window (see: Collapsing Theatrical Windows Are Not The End Of Cinema Life As We Know It)

My opinion is admittedly unpopular with business insiders. Some might even say my recommendations are a little crazy. Like a fox! This is a crazy world in the pandemic and a new theater model will need to emerge. I can see all kinds of reasons that Motley Fool lays out and more for studios to buy up theaters. The main caveat is buy at the optimal price. Not now, not when the assets are seriously distressed. A little patience for your shareholders.

They’ve already pushed off most of the major movies to 2021, which should all but seal AMC’s fate, unless they can get some more cash help. I don’t wish AMC to fail, but don’t see any way that makes sense for Disney, Amazon, Netflix, etc buy into AMC right now.

What do you think?

Apple, WarnerMedia and Facebook Reportedly Say No To Buying Quibi

How many subscribers, like us, canceled Quibi after the generous 90 day free trial? Guesses anyone?

Poor empty theater Quibi, showing their “quick bites” to people who aren’t hungry like Facebook, WarnerMedia and Apple. Or so the article below is saying.

The Information reported, “Over the past few weeks, Katzenberg has pitched several tech and entertainment executives about buying Quibi, only to be turned down. Among those he approached was Eddy Cue, Apple’s senior vice president of internet software and services, and WarnerMedia CEO Jason Kilar, according to people familiar with the situation. He and his partner in Quibi, former HP CEO Meg Whitman, also made formal presentations to executives at other tech companies, including Fidji Simo, head of the Facebook app, only to get rejected there as well, the people said.”

Quibi Reportedly Fails to Sell Assets to Apple, WarnerMedia, and Facebook

Of the three rejecting suitors, only the last one makes any kind of sense, but let’s take them one at a time.

WarnerMedia – Quibi would be of little help for HBO Max. Maybe some of their content would be worthwhile, but why pay premium for it? Wait for the fire sale. This is an easy pass.

Facebook? They are focused on VR right now and Quibi doesn’t have any VR content (at least to my knowledge). They also don’t seem to want to be in the streaming movie & TV space, so a Quibi acquisition makes less than zero sense.

Apple – this is one I’ve already mentioned could help by adding to their sparse library of content for AppleTV+. The problem, and just guessing here, is the price tag. Same as WarnerMedia, wait for the fire sale.

There are other issues that makes buying Quibi unattractive, like the infringement lawsuit for the flipscreen feature. It’s an cool feature for techie movie fans, but the vast majority of non-techie subscribers probably could care less.

Bottom line: Quibi is going to have to lower the price tag, find some way to increase their subscriber count (good luck!) and try again later.

Of Course Box Office Revenue Last Year vs. This Year is Ugly

This graph from August 9 on closed theaters vs. open theaters. It’s a little better some 45+ days later, but still … (see: The Top 10 States Having The Most Movie Theaters Opened vs. Unopened)

It’s problematic seeing comparisons with last year box office stats vs. this year. There are so many mitigating factors, the biggest of which is The Thing That Should Not Be Named. We remain believers that moviegoers will return to theaters when the following things happen:

  1. Theaters nearby are reopened
  2. They feel it’s safe in their area to do so
  3. There are new movies they want to see

#1 is out of moviegoer’s control. If your favorite movie theater hasn’t opened yet and doesn’t plan to do so any time soon, then you’re not likely to return. #2 is more challenging to calculate because it involves multiple factors. #3 after #1 is the most important. If new movies are out that people want to see, very little else is going to matter. You know, build it and they will come. Sure, #2 will be a factor, but I think a bigger factor for most moviegoers — I’m talking the people who actually watch at least the average of 3-4 movies in theaters per year — is whether or not there is a movie they want to see.

The biggest movies people want to see, Tenet aside, just keep getting delayed and pushed back. Black Widow has dropped out and it’s up to No Time To Die (Bond #25) coming in November — maybe.

Back to the box office stats today. Why the numbers are wildly skewed?

We look around and see how many theaters, just in our local area, are still closed. Not just a few theaters, we’re talking like 25+ movie theaters dark and doing $0 business.

Factor in all that revenue, whatever it would be, if these theaters were open. None of that money is or can be reflected in the stats this year.

Over the weekend, North American ticket sales were an estimated $13.2 million, according to data from Comscore. For comparison, the U.S. and Canadian box offices hauled in $125.4 million during the same weekend last year thanks to the openings of “Downton Abbey,” “Ad Astra” and “Rambo: Last Blood.”

Movie theater stocks tank after another disappointing box office tally

We remember seeing the movies quoted above a year ago. Rambo: Last Blood was our first 4DX movie ever seen at the Red Rock Regal Cinema in Las Vegas. That theater is reopened and running, but we don’t live in Vegas. We haven’t been back to Vegas since March. We’re planning on going there again after the first of the year. Probably January, Feb or March, but it all depends on what’s going on in the world.

In the meantime, we’re adding our revenue to box office stats. We’re seeing all new wide release movies being released, which is a total of 7 movies since the theater opened south of us.

On a more positive note, Regal brought back FREE refills on large popcorn and soda (see: When Regal Cinemas Reopen “Temporarily” No FREE Refills for Large Popcorn and Soda)

TCL Wants a Piece of Roku’s Action – Talk about HBO and Peacock Irony

In 2014 Chinese electronics manufacturer, TCL, didn’t think that much about sharing in the value of including Roku with their TVs. Their 2014 deal astonishingly included $0 for them to include that with their TVs.

Now that they have over a quarter of all the smart TV market, TCL wants in on the Roku market.

Sensing a missed opportunity, TCL has been working with other TV software providers to capture more customer revenue. In March 2020, the company announced a target of “profit from value-added Internet services exceeding 50%,” sending Roku’s shares down 5%. 

Roku Stock Has a TCL Problem. Shares May Sink 35% | InvestorPlace

The irony mentioned in the headline for Roku is this is the same kind of play they’re currently making with HBO and Peacock (see: Hey Roku, Peacock has 10+ million signups and HBO Max 4.5+ million)

What comes around goes around.

Will we ever see HBO Max and Peacock on Roku? I think the answer is yes (related, see: Why not put the deal terms with Roku and Amazon Fire out there for everybody to see, HBO Max and Peacock?).

For those who haven’t been following the kerfuffle, Roku and Amazon for their popular Fire stick believe they have the upper hand being that they serve as gateways to some 70% of the streaming households. HBO Max and Peacock feel they deserve to get the same treatment as Netflix, despite HBO roots as starting as an add-on premium service and Peacock being new. I left out Quibi, but they also aren’t on Roku or Amazon Fire stick.

Why do I think Roku will cave? Because they need HBO more than the reverse. HBO has been making original content since the 70s, long before anybody even knew what Roku was.

As for Peacock? They are big enough to go it alone for awhile. I’d think it’s more likely they cut a deal with Roku before HBO.

Quibi? Dart throw, it’s anybody’s guess where they land. My opinion only, but I don’t think Quibi is even in the discussion a couple years from now. Somebody bigger will likely buy them (Apple, perhaps) for their originals and creative pipeline, axe the nonsensical 10 minute clips and the company will be a historic footnote.

Back to this TCL deal. This is bad news for Roku. They cut a very smart deal in 2014, but doesn’t sound like they can benefit the same way from that any longer.

Majority of DC Universe staff have been laid off by WarnerMedia, report says

The Riddler, Joker and Harley Quinn on the DC Universe original TV series Harley Quinn

After reading the WarnerMedia CEO letter and not seeing anything about DC Universe, I was nervous for the service (see: WarnerMedia Company Shakeup Memo Doesn’t Mention Fate of DC Universe), and earlier today comes reports that the “majority” of DC Universe staff have been laid off. The comics division is being hit especially hard.

Insiders also say the majority of the staff of the streaming service DC Universe has been laid off, a move that had been widely expected as WarnerMedia shifts its focus to new streaming service HBO Max. “DC Universe was DOA as soon as the AT&T merger happened,” said one source.

DC Comics, DC Universe Hit By Major Layoffs | Hollywood Reporter

Hopefully the “source” is wrong about DCU being “DOA” (Dead On Arrival). Keep it around for at least the wide selection of comic books. Will continue to push for that from our tiny, relatively insignificant — but growing, hey! — web crevice.

Saw another article the other day — no sources cited, so probably not credible — saying that DC Universe had around only 50,000 paid subscribers. Don’t believe the numbers are that low. We’re one of them, having gotten in at a lower monthly price deal at the end of 2019, but it just seems to me that they must have at least a couple hundred thousand paid subscribers for their comics … yes/no?

Even though Stargirl’s first season is now finished, we’re staying subscribed to see what comes out of the FREE virtual event, DC FanDome on Saturday August 22, 2020. Presumably, we’ll find out from the source what is happening with DCU. Will be posting more about that in the not too distant future.

Now, could be wrong, but despite the layoffs, I don’t think WarnerMedia is going to shut down DCU.

Will the service be changed? That much seems all but a certainty. My money is on it being a comics-only service, perhaps even with a bundling deal with HBO Max (which would promote HBO Max, so it plays into WarnerMedia’s strategy).

I mean, if they’re keeping Crunchyroll (see: WarnerMedia’s Crunchyroll growing, despite curated hub on HBO Max, maybe DC Universe will enjoy similar autonomy?), they aren’t opposed to keeping other niche services. I do think the days of seeing anything movie or TV-oriented original and exclusive at DC Universe are gone.

Hey Roku, Peacock has 10+ million signups and HBO Max 4.5+ million

If you needed any more proof that “free” sells in the streaming space, Peacock, the only major contender streaming service that offers a free version already has 10+ million subscribers.

More than 10 million households have signed up for Peacock, the new streaming service from Comcast’s NBCUniversal. The media giant shared the update in its second-quarter earnings release, and management had much more to say about the early results during the accompanying conference call.

“Not only are more people signing up than we projected, but they are watching more frequently and engaging much longer than we projected,” Jeff Shell, CEO of NBCUniversal, told analysts.

Comcast’s Peacock Is Off to a Strong Start

HBO Max, by comparison, has had 4.5 million subscribers. That is roughly 15 million new subscribers without Roku and Amazon Fire stick users. This most certainly is not what Roku wants to hear. They need to hurry up already and get to the bargaining table. A couple months have passed (see: Why not put the deal terms with Roku and Amazon Fire out there for everybody to see, HBO Max and Peacock?)

Speaking of earnings calls, Roku is scheduled to deliver theirs Wednesday 8/5, and some analysts are predicting — gasp — no profits.

The average estimate right now is for revenue to come in 25% stronger in Q2 2020 than it did in Q2 2019. Despite this sales growth, however, analysts predict that Roku’s losses will only increase — more than quintuple, in fact, to a loss of $0.51 per diluted share.

Why Roku Stock Popped 5% This Morning

I probably shouldn’t get started on companies that don’t make profits being popular, but it concerns customers. This week Sprint is going the way of the dinosaur, as it was gobbled up by another company. Maybe that will be the future for Roku someday.

(this gets me thinking about who might want to buy them … hmm)

Did you sign up for Peacock and/or HBO Max? If you did, what motivated you to do so? Yellowstone (FIRST LOOK) has been on the Reelgood top trending picks (https://reelgood.com/curated/trending-picks) for several weeks.

Apple Wants To Buy 2-4 Greyhound-like Movies for AppleTV+ Every Year, says Fast Company

Greyhound ⭐️⭐️⭐️⭐️

Seems like every news organization has “inside sources” — Fast Company has some saying that following the big splash of Tom Hanks’ Greyhound on AppleTV+ they want to buy 2-4 of these type blockbuster movies a year.

Going forward, one source says the streamer is discussing plans to release a dozen new movies a year on Apple TV Plus, roughly one a month. Two to four of those would be blockbuster-type titles such as Greyhound and Emancipation, the runaway-slave thriller starring Will Smith and directed by Antoine Fuqua (Training Day) that Apple recently acquired for $120 million in a bidding war with Warner Bros., Universal, and other studios. Another source had fewer specifics but confirmed that Apple is telling Hollywood that it’s now in the market for more tentpole-like feature films. (Apple would not comment for this story.)

Apple eyes new streaming strategy after Tom Hanks drama breaks records

Simple math suggests, if this is true (big “if” there), could cost upwards of $500+ million. I’m sharing this article here because my confidence in this is pretty high. Apple has the cash to throw around and it fits their historic corporate culture rather than dive into something, they pick and choose.

When Martin Scorsese needed to score some more greenbacks to finish his latest movie, who did he approach? (see: Apple Might Bail Out Budget of Scorsese’s Killers of the Flower Moon) Yes, Apple.

Under Steve Jobs, rest his soul, this would be exactly the way they’d get into the movie business. It’s what he did with music. Jobs didn’t want to have a subscription plan like Spotify, he wanted to sell tracks for a buck each and so they did — they sold tons of them. Eventually this model would lose out to Spotify, but they made a boatload of cash in the interim.

If you compare the business types, that’s kind of what Apple is doing right now with AppleTV+. They don’t want to pay to rent licenses of movies for subscribers on a license, they want to take a piece of the pie to sell or rent monthly movies only and create their own originals.

The problem is Apple is so far behind Netflix, Amazon, HBO, Hulu, Peacock, that they may never catch up buying and/or creating a mere dozen or so movies a year.

10 years = 120 movies
20 years = 240 movies

That isn’t going to build them a sizable enough library of originals to keep members subscribed. Sure, there are buying TV series, documentaries, miniseries, too (they just bought Werner Herzog’s new documentary “Fireball” according to MacRumors), but will it add up to what Netflix is releasing?

Netflix currently releases around 50+ originals a month. Most are TV shows, documentaries, miniseries, etc, but they offer a fair number of movies each month on average. This original content is on top of the existing library they are paying for of rotating movies. An argument could be made that Netflix doesn’t even need the rotating movies from other studios any more. You can’t say that about any other service of originals except maybe, possibly HBO, that also has an impressive catalog of original programming created since the 70s.

Quality-control is something we’ve questioned recently (see: Does Netflix Release Too Many Originals? Maybe Ask New CMO Bozoma Saint John) so quantity isn’t everything. The problem with AppleTV+ at this moment in time is their cupboards, content-wise, are too bare to justify an ongoing subscription compared to other competing streaming services.

It seems Apple believes this and wants to go grocery shopping on the theatrical movie aisle. So, if you’re a movie studio with a delayed title and contemplating taking it to streaming, Apple has arrived with multiple suitcases filled with cash.

Unfortunately, Apple aren’t the only ones who want to buy these theatrical releases. Netflix, Amazon, WarnerMedia/HBO, NBCUniversal/Peacock … perhaps to a lesser extent even Disney might cough up a few bones (although they seem less likely to be buying other movies, when they have a bunch of their own content in the pipeline).

The studios with finished movies, waiting for release dates will continue to have this option: sell to the highest streaming channel bidder. I’m sure every studio has Apple programmed on speed dial.

AMC opens mouth, inserts foot … again – please just reopen already!

If any company ever needed to quit the doom diet, it’s AMC. We realize time’s are challenging and they need to tell shareholders something, but does it have to be that they have “substantial doubt” their business can continue to stay afloat? I mean, really.

Negative prophetic hypotheticals aren’t even remotely encouraging for businesses.

Sure, AMC are burning cash while closed and if they open and don’t do enough business they’ll burn reserves even faster. The problem is the longer they stay closed, I’d argue, the worse it all gets.

The theater chain, which closed its theaters earlier this year, expects to have lost between $2.1 billion and $2.4 billion in the first quarter.

AMC Theatres has ‘substantial doubt’ it can remain in business – CNN

I’ve been saying all along that they should reopen as soon as it’s safe to do so. More and more businesses are being allowed to reopen. We’re in June now, and while there are no new wide release movies available, it seems prudent to me that they should get the theaters open — again, if it’s safe to do so — then start showing movies.

Or are they literally going to wait until the week of Tenet on July 17? I’ve heard they may reopen in July, but not seen any actual date on the AMC website. Has anybody else?

Publishers Seeing Paid Subscriber Increase By Using Virtual Events – Meanwhile, Biggest Movie Theater Chains Remain Closed

Two important words for movie theater chain owners and studios: virtual events.

Recently I mentioned in a post (see: Duh – People Prefer Streaming Channels Without Ads – During Pandemic or Not) and a follow up comment that I wasn’t a fan of the New York Times blocking readers after a certain number of reads. One reader complained that it sounded like I had issues with paywalls.

I don’t.

Just don’t think this method is a business wise or most effective way to monetize by disrupting your website readers and potential subscribers. In my detailed comment reply I stated there were other creative ways to drive more subscribers to their site.

Enter virtual events.

“With the huge success we’ve had with virtual events — over a quarter of a million attendees have tuned in from over 110 countries — we’ve realized that a significant portion of our attendees were not current NYT subscribers,” said Jessica Flood, managing director, NYTLive. “We are working to engage that group over the long term in a variety of ways, including a new suite of subscriber-only virtual events launching in the coming weeks.” 

Publishers are tying virtual events to subscriptions – Digiday

By holding special subscriber-only virtual events, it drives more paid subscribers.

When we choose to monetize this site someday, virtual events will be on the menu. I’d love to watch movies with the most engaged and energetic readers and it ties into what we do on YouTube with our “just left the theater” movie reviews. One way to scale these virtual events is to do it behind a paywall.

The New York Times isn’t having movie watching sessions, no, but there are all different types of virtual events and, as the article states above, they are attractive to paid subscribers as an added benefit.

It’s all about the benefits.

Imagine if you’re the local movie theater and you want to get more people watching movies. How about holding a virtual event with a host, just like Sylvester Stallone did for Rocky recently on Facebook (picture at top) (see: WHAT TO WATCH THIS WEEKEND #21 of 2020 Movie and TV Streaming Picks – Netflix, Amazon, Facebook, Roku, Peacock, Shudder, DC Universe).

And it continues to bother me that movie theater chains feel like they can’t make any money while they’re closed in the pandemic. Ideas exist, but they’d rather just say “we’re waiting for the new movies to launch in July” — what happens if Tenet and Mulan are delayed? Does that mean they’d hold out on reopening in August?

Summer is going to come and go. Movie theaters need to reopen during the summer. At least one some sort of scale. Open your best performing theaters in major markets first, fine, whatever, just start reopening the locked doors.

In the meantime, I’ll keep hoping not to read more articles where the movie theater chains are whining about having no new movies to show (see: Florida Landlord Sues AMC for Rent – 7.5 million – Meanwhile, they won’t open until there are “new” movies to show?) and how they are making “almost no” revenue while closed.

Virtual events! Work out deals with studios and start hosting watch parties. AMC, Regal, somebody get on this. Maybe the independents will lead the charge (see: Independent Theaters Testing Virtual Screenings)

So many ideas for virtual events to draw people’s interest. Show us the creativity and we’ll be more willing to open our wallets.