Matthew Ball Profile picture
Strategist, essayist, that guy on Twitter, Tinkerer @EpyllionCo, Venture Partner @makersfundvc. Former Head of Strategy @AmazonStudios, ex-OtterMedia. 🇨🇦
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23 Jul
The "there can't be a Netflix-like service in video games" takes are incredibly wrong/facile

Are video v gaming dynamics very different (monetization, distribution of consumption, role of exclusivity)? Yes. Super

That means the model will look different. Not that it won't exist
I've been sent this article dozens of times. It's not wrong, it's just so close minded + assumes nothing is changed or unlocked via subscription, or that over time, consumer wants aren't met one way or another.
fastcompany.com/90518787/why-y…
Reminds me of saying "Yes, free to play games can reach more players, but how can you make up for 15MM people paying $50 every two years - that math doesn't work"

It's flawed, limited to old models, and misses the fact the value today is server-side where Metcalfe's law rules
Read 7 tweets
10 Jul
1/ RE: Fire TV/Roku disputes

Easy to forget how hard it was for OTT video to just reach consumers

In 2012, top devices for Netflix were Xbox 360/PS3! Families didn't have Internet TVs, iPads. Netflix had apps on treadmills + Nintendo 3DS! Roku's purpose was TO get Netflix on TV
2/ Access has now commodified. Most families have iPads, dozens of devices that can play an app, multi-device support largely turnkey

Netflix is now REDUCING device support; it doesn't need to play on a toaster, a treadmill, your legacy TV.
3/ This is why Apple used to charge 30% for video apps, now it charges 15%. Why Netflix used to signup on iOS, now it's just at Netflix.com.

Of course no one wants to change devices or buy a device to watch X or Y, or go to a site to sign up. But they now CAN
Read 6 tweets
31 May
1/ Most HBO Max commentary overlooks why a "telephone company" bought a media co in the first place

AT&T plans to invest $4B in HBO Max, after $108B buying TimeWarner + before accounting for Max-related declines in Turner/DirecTV etc

Goal? +$1B a year in profit in 2024. Weird!
2/ Why would AT&T, which generates $29B in cash per year (more than almost any public company in the world), do such a thing?

It's not really HBO Max upside: driving from $6B+ revenues and $2B+ profit to $7B and $3B. Yay?

It's the $72B wireless arm (there's also Xandr, below)
3/ Every 0.1% reduction in AT&T Mobility churn (~2.9% per month) generates ~ $350MM in annual cash profit for AT&T.

Then there's new customers. AT&T spends $300+ to get new wireless customers. It does this ~5MM times per year. If free HBO drops this cost, it saves enormously
Read 14 tweets
4 May
"Can Theaters Survive" requires looking at why they were already struggling. There are a few challenges and I don't see ANY path to turning ANY of the trends meaningfully around.

Trends below
1. Per capita attendance declining for 20 years, worst drop among the young and the most consumptive
2. Reduction in # of major films going to box office
3. Growth in at-home substitutes (TV + SVOD + Games)
4. Hollywood growing output for SVOD-only release too (esp. Disney + WB)
5. Too many film screens (esp in malls), which when closed, will mean fewer showtimes + greater travel distance
6. Experience advancements (VIP, alcohol, bigger seats, IMAX, reserved seating) have helped stem decline, not stopped it
7. AYCE subscription still don't stop drop
Read 7 tweets
29 Apr
Fortnite continues to push away from BR/gun-based play as it pursues more social/hangout-based virtual world experiences

Launching a new island focused on races, building, fishing, dancing, skill competitions - no guns allowed, no deaths

pcgamesn.com/fortnite/party…
2/ Concerts, movie-tie in events, in-game movie theater, etc., are important, get lots of attention

But macro consideration is that there's a low ceiling to high skill games, especially adversarial ones

Virtual worlds need to fit many levels of immersion, skill, emotional needs
3/ We watch 'Game of Thrones' and 'The Office' differently, and 'The Office' is rewatched even more differently.

Your mother won't go to Fortnite for the same reason you do, just as parents first joined Facebook to see photos of their kids, understand their lives and friends
Read 10 tweets
26 Apr
1/ The Travis Scott x Fortnite event is commonly understood in comparison to prior Fortnite events, but instead it needs to be viewed as part of Fortnite’s testing and experimentation process/journey. It is technically less impressive than prior events, but creatively much bigger
2/ At its core, TS is an interactive cut-scene. Players can’t “affect” what’s happening, but unlike playback video, the experience is in engine and thus you have some control over your character (think of what you can/can’t do on a rollercoaster). Games have had this for decades.
3/ What’s new is that the experience isn't game-like, lacks game-like goals. Instead, it's social, about art. Marshmello was, too. But it was basically a programmed character/area within Fortnite's map. There was a stage + lightshow, but it was like a ride in a mall or side quest
Read 27 tweets
21 Apr
At this point, Sony has abandoned all hope of 2020 moviegoing.

Worth comparing this outlook to those in other live or group entertainment this calendar year.
The impact here cascades:
• 2021 will have 2021's films, and most of 2020s best
• Audiences don't really go to the movies more when there are more good movies
• Plus audiences will still be reluctant about movies in 2021

This means far fewer tickets and far more competition
In turn, movies that were plausibly viable in the box office, will not be

In turn, more movies will skip box office

In turn, more box office will have fewer films and more at-home substitutes

In turn...
Read 4 tweets
15 Apr
1/ Some threaded thoughts on Quibi:

I'm asked a lot if I'm a bull or bear, if it'll work or not, if it can or not.

I have only addressed this here and have deliberately avoided other questions. They're too narrow, full and miss the point (matthewball.vc/all/misnomers)
2/ The "admission price" to launching an SVOD is billions. We've known this for years.

You cannot critique the idea + the spend, only the idea. If you believe in the idea, you have to spend. If you don't, the spend is derivative dumb.

Note: TikTok spent $1B in marketing in 2019
3/ Similarly, we are at the very top-of-the-funnel for Quibi (awareness, familiarity, intent, install, try). That's all we can currently assess.

I think 1.7MM Day-7 downloads is a great launch (few comps, but ratio to Disney 10MM in Day-1 feels good).

Read 8 tweets
13 Apr
This is an incredibly successful launch, especially given 11th hour need to pivot campaign WHILE finishing product/content + WFH

Criticisms are ultimately revealed to be critiques of fundraising, unknowability of churn, economics. To which, sure! But we're at top of funnel rn.
Put another way: you can't keep customers you don't have.

High installs doesn't mean you do, but you have to start there + they need to put up big numbers. And did

OTT video is a brutal game. Invest billions or don't bother. TikTok spent $1B+ outside China in 2019 on marketing.
Worth highlighting Barry Diller prepped billions to launch an SVOD based atop the Vimedo brand in 2016. Decided it was too expensive.

You can't critique enormous investment AND desire to try. If latter, then former. Diller wanted latter, no former, thus no latter.
Read 4 tweets
9 Apr
One of the problems with the "pure" D2C argument is it doesn't mean you collect all the economics by going it alone

New revenue is generated by solving for other biz needs, selling adjacent products (e.g. theaters sell experience + food + ads; TV helps sell phone/broadband)
In the same way you can "sell" video, but also sell attention associated with this sale to the rest of the economy and take a rake on all transactions (advertising is consistently ~1% of GDP)

This is key given how much consumers hate spending on media matthewball.vc/all/minedmedia
Some companies, e.g. Disney, have many other side gigs. As a result, pure D2C can take away or harm other avenues, while aiding others more (e.g. Disney+ helps Disney cut out travel agencies, toy retailers, etc.)

Most don't have this flexibility
Read 6 tweets
9 Apr
"Prime Video isn't the network, it's the ad"

Disney: Hold my beer
The Rock will host a 10-hour docuseries on Disney's most popular theme park rides

(No, this is not the "Imagineering Story", it's in addition to it. FWIW, docuseries was on my top 12 last year)
These are actually another good example of why the "arms dealer" argument didn't work for Disney.

No one would have bought these shows at good rates, but they will be watched, will breed lifelong love, and will be used for targeted parks promotions/offers
Read 3 tweets
9 Apr
1/
• Roblox usage is up 40%
• Online education start-ups saying $400 (on discount!) classes on how to make Roblox/Minecraft games are top of their charts
• [Image]

h/t @mhdempsey

cnbc.com/2020/04/08/rob…
2/ How this time/exposure de-stigmatizes things like "living online", having and investing in "avatars", and spending time playing in virtual worlds without game-like goals...

Will be incredibly profound
3/ These immersive, no-code and highly extensible virtual worlds are the platforms of the future
Read 4 tweets
8 Apr
-_- The Disney+ bears and the Netflix bears
"BuT tHe q1 ChUrN!" / "BuT WaIt TiLL AapLe aNd DiSnEy"
"They should just license their content; they don't get tech" / "They need ads to keep their price down for when competition arrives"
Read 4 tweets
8 Apr
ALERT: Dollar Shave Club did 0.0000001% of Gillette's revenue in Y1
ALERT: Nokia sold 12 smartphones for every iPhone in the latter's first twelve months and 40 total phones
Read 3 tweets
7 Apr
1/ Esports will not overtake physical sports anytime soon.

2/ Worth noting the biggest crossovers are those that replicate "sports" - especially those that are visually indistinguishable - and are popular because are are no "sports"
3/ COVID will have a profound impact on the ability for "esports" to access funding, brand partnerships, distribution deals, new fans

4/ But NBA 2K + NASCAR are nearly indistinguishable, required no viewer learning (and are easy anyway), and *substitutes*
5/ CS:GO is fairly simple to get, but still requires education, clearly non-real, and isn't super easy to follow. League of Legends is very hard to understand, very fantastical, very hard to appreciate

This is very important RE: timing because future of esports isn't simulacra
Read 7 tweets
3 Apr
There we go. Pre-COVID, Disney had moved many films from theatrical release to Disney+ premieres.

This is the biggest, by far.

Alternative isn't just moving to 2021, but a ruthlessly dense 2021 calendar
2/ There has always been this belief in "PVOD" as an inevitability. This was renewed during COVID.

I think we missed the window where it could have been a thing. We're beyond it. More value skipping higher priced, one-off home video rentals to drive long-term subscriptions
3/ In this sense, the theaters "won" by preventing PVOD from becoming a thing for years. Maybe forever.

But they would have shared in PVOD revenue.

They'll get nothing here.
Read 4 tweets
1 Apr
Keeping Rosie inside is breaking my heart
Sadness continues, gets in the way of new essay
Read 3 tweets
31 Mar
After being seen as an early and enormously successful leader in pivoting to D2C, WWE continues to put more and more content into B2B Pay-TV deals (sometimes carved out from WWE Network)

"Fox Sports Lands Monster Slate of WWE Shows, WrestleMania Deal"
cbr.com/fox-sports-wwe…
In theory, an IP/story-based company should see increasingly returns to housing all content together (i.e. more than sum of parts).

Fact *more* value is unlocked via parts is telling, means more value generated by solving others' business needs v. building IP ecosystem
Imagine Disney saying "Yes, Disney+ has the entire MCU, except the Captain America trilogy will be on Amazon, also, our TV series will have a first window on Peacock"

Sucks for consumers and would be instructive as to the Disney+ ceiling
Read 3 tweets
29 Mar
[NEW] Three essays on how COVID-19 will affect the "Film/Theatrical" biz, "Video Games/Digital Life" and "Pay-TV/OTT Video"
--
In sum: COVID-19 will exacerbate and accelerate all underlying trends and grow the gaps between the ‘haves’ and ‘have nots’
matthewball.vc/covid-impacts
The money chart thanks to @AntennaData
3/ And here's Disney+ daily sign-ups, again, c/o @AntennaData
Read 4 tweets
28 Mar
HBO's top movie recommendation rn is 'Dark Phoenix'
'LOL', starring Miley Cyrus, which I believe made less than $500 per theater in its opening weekend, is also available
Read 4 tweets
26 Mar
Wow. This is huge, amazing, and deeply instructive as to what Epic is actually trying to achieve.

Epic launches publishing label, signs creators behind Control, Inside, and The Last Guardian theverge.com/2020/3/26/2119…
I loved 'Control' (am excited for today's DLC) and it's clear this team has a LOT of potential

And 'Last Guardian' is a deeply beautiful game unalike any other
Read 3 tweets