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Canada demands 5% of revenue from Netflix, Spotify, and other streamers

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Streaming fees —

Canada says $200M in annual fees will support local news and other content.

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Illustrative photo featuring Canadian 1-cent coins with the Canadian flag displayed on a computer screen in the background,

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Canada has ordered large online streaming services to pay 5 percent of their Canadian revenue to the government in a program expected to raise $200 million per year to support local news and other home-grown content. The Canadian Radio-television and Telecommunications Commission (CRTC) announced its decision yesterday after a public comment period.

“Based on the public record, the CRTC is requiring online streaming services to contribute 5 percent of their Canadian revenues to support the Canadian broadcasting system. These obligations will start in the 2024–2025 broadcast year and will provide an estimated $200 million per year in new funding,” the regulator said.

The fees apply to both video and music streaming services. The CRTC imposed the rules despite opposition from Amazon, Apple, Disney, Google, Netflix, Paramount, and Spotify.

The new fees are scheduled to take effect in September and apply to online streaming services that make at least $25 million a year in Canada. The regulations exclude revenue from audiobooks, podcasts, video game services, and user-generated content. The exclusion of revenue from user-generated content is a win for Google’s YouTube.

Streaming companies have recently been raising prices charged to consumers, and the CBC notes that streamers might raise prices again to offset the fees charged in Canada.

Fees to support local news, Indigenous content

The CRTC said it is relying on authority from the Online Streaming Act, which was approved by Canada’s parliament in 2023. The new fees are similar to the ones already imposed on licensed broadcasters.

“The funding will be directed to areas of immediate need in the Canadian broadcasting system, such as local news on radio and television, French-language content, Indigenous content, and content created by and for equity-deserving communities, official language minority communities, and Canadians of diverse backgrounds,” the CRTC said.

CRTC Chairperson Vicky Eatrides said the agency’s “decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content.” The agency also said that streaming companies “will have some flexibility to direct parts of their contributions to support Canadian television content directly.”

Industry groups blast CRTC

The Motion Picture Association-Canada criticized the CRTC yesterday, saying the fee ruling “reinforces a decades-old regulatory approach designed for cable companies” and is “discriminatory.” The fees “will make it harder for global streamers to collaborate directly with Canadian creatives and invest in world-class storytelling made in Canada for audiences here and around the world,” the lobby group said.

The MPA-Canada said the CRTC didn’t fully consider “the significant contributions streamers make in working directly with Canada’s creative communities.” The group represents streamers including Netflix, Disney Plus, HAYU, Sony’s Crunchyroll, Paramount Plus, and PlutoTV.

“Global studios and streaming services have spent over $6.7 billion annually producing quality content in Canada for local and international audiences and invested more in the content made by Canadian production companies last year than the CBC, or the Canada Media Fund and Telefilm combined,” the group said.

The fees were also criticized by the Digital Media Association, which represents streaming music providers including Amazon Music, Apple Music, and Spotify. The “discriminatory tax on music streaming services… is effectively a protectionist subsidy for radio” and may worsen “Canada’s affordability crisis,” the group said.

The Canadian Media Producers Association praised the CRTC decision, saying the decision benefits independent producers and “tilts our industry toward a more level playing field.”

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Comcast’s streaming bundle is $15/month for Netflix, Peacock, Apple TV+, and ads

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Triple play (with ads) —

It’s $25 or $10 cheaper than separate subs, but note the plans you’re getting.

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Xfinity log on a tablet, with fossil rocks, glasses, and a notepad on the desk beside it.

Enlarge / Comcast/Xfinity’s new bundle of streaming services harkens back to a much earlier era.

Getty Images

Disaggregation is so 2010s, so Comcast, facing intense pressure from streaming services, is bringing back the old bundle-it-up playbook. Its previously announced bundle of Netflix, Peacock, and Apple TV+, only to Comcast/Xfinity cable or broadband subscribers, will cost $15 per month. It’s a big discount on paper, but the fine print needs reading.

The “StreamSaver” bundle is considered a “companion to broadband,” Comcast’s CEO David Watson said at a conference today, according to Reuters. It cuts more than 30 percent off the separate price of certain tiers of each service and can be bundled with Comcast’s own “NOW TV,” which has 40 other cable channels streaming. The service is due out May 29 in the US.

Take note that Comcast’s bundle gives you Netflix’s “Standard with ads” plan (which also locks you in at “Full HD” resolution and two devices), Peacock’s “Premium” (which also has ads), and Apple TV+, which has made some recent moves toward an advertising infusion. The things that people liked about streaming—being able to pick and choose TV and movie catalogs, pay to avoid advertisements, and not be beholden to their cable company for entertainment—are effectively countered by StreamSaver. The lines get blurrier, and the prices go up.

If you were already set on paying for the cheapest versions of each service and don’t mind not being able to cancel any one of them once you’re tired of it, $15 is indeed a savings. Doing the math earlier this month, Ars’ Scharon Harding totaled up all three networks at $39.47 per month with no advertising, or $24.97 per month with ads.

Tacking streaming services onto your Comcast subscription would help the company out, as would signing up, especially for StreamSaver. Comcast lost nearly 500,000 cable TV subscribers in Q1 2024, down to 13.6 million subscribers, compared to 16.1 million at the end of 2022. Peacock, the streaming service it owns, has not made money since its 2020 launch and lost $2.7 billion in 2023.

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Cable TV providers ruined cable—now they’re coming for streaming

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Cable 2.0 —

Comcast wants to tie its cable/Internet to your streaming subscriptions.

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Cable TV providers ruined cable—now they’re coming for streaming

In an ironic twist, cable TV and Internet provider Comcast has announced that it, too, will sell a bundle of video-streaming services for a discounted price. The announcement comes as Comcast has been rapidly losing cable TV subscribers to streaming services and seeks to bring the same type of bundling that originally drew people away from cable to streaming.

Starting on an unspecified date this month, the bundle, called Streamsaver, will offer Peacock, which Comcast owns, Apple TV+, and Netflix to people who subscribe to Comcast’s cable TV and/or broadband. Comcast already offers Netflix or Apple TV+ as add-ons to its cable TV, but Streamsaver expands Comcast’s streaming-related bundling efforts.

Comcast didn’t say how much the streaming bundle would cost, but CEO Brian Roberts said that it will “come at a vastly reduced price to anything in the market today” when announcing the bundle on Tuesday at MoffettNathanson’s 2024 Media, Internet and Communications Conference in New York, per Variety. If we factor in Peacock’s upcoming price hike, subscribing to Apple TV+, Netflix, and Peacock separately would cost $39.47 per month without ads, or $24.97/month with ads.

According to Roberts, Comcast is hoping that the upcoming package will help Comcast “add value to consumers” and “take some of the dollars out of” other streaming businesses.

For subscribers, the more immediate effect is the continuing and rapid blurring of the lines between cable and streaming services. And Comcast knows that.

As Roberts notes: “We’ve been bundling video successfully and creatively for 60 years, and so this is the latest iteration of that.”

Comcast is hemorrhaging subscribers

Last month, Comcast said it lost 487,000 cable TV subscribers in Q1 2024. It ended the quarter with 13,600,000 subscribers, compared to 14,106,000 at the end of 2023 and 16,142,000 at the end of 2022.

Comcast’s broadband subscriber base also decreased from 32,253,000 at the end of 2023 to 32,188,000.

Peacock, Comcast’s flagship streaming service, hasn’t made any money since launching in 2020 and lost $2.7 billion in 2023. However, in April, Comcast said that Peacock’s Q1 losses lessened from $704 million in Q1 2023 to $639 million in Q1 2024.

It’s worth noting that in January, Comcast raised prices for its cable and Internet services by 3 percent, blaming the price hikes on broadband investments and an increase in programming costs.

Déjà vu

One of the common reasons people abandoned cable TV were bundled packages that forced people to pay for services, like phone or Internet, or channels that they didn’t want. Now, Comcast is looking to save its shrinking subscriber base by bundling its cable TV or Internet service with some of its biggest competitors. Like streaming services, Comcast is hoping that bundling its products will deter people from canceling their subscriptions since they’re tied to each other.

Subscriber churn is also a problem in the streaming industry. Antenna, a subscription analyst company, estimates that around 25 percent of video-streaming subscribers in the US have canceled at least three such subscriptions in the last two years. These high-churn subscribers represent around 40 percent of new subscriptions and cancellations last year, Antenna told The New York Times in April.

But Comcast’s announcement hints at déjà vu as Comcast blatantly seeks to re-create the cable bundle or triple-play package using the very streaming services that are eating away at Comcast’s cable business. Ironically, Comcast is seeking to bandage a declining business by feeding some of the biggest contributors to that decline, using the same tactics that drove many customers away in the first place.

We’re expected to hear a lot more about bundled services. Last month, we learned that a Disney+, Hulu, and Max bundle would be released this summer, for example. And there’s already a lengthy list of streaming bundle packages available from third parties like Verizon and T-Mobile.

But for people who left cable to avoid overloaded bundled packages and to get away from companies like Comcast, which group cable TV or Internet with streaming services that often raise prices, limit show and movie availability and features, and increasingly focus on ads, it just isn’t worth the monthly savings.

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All the ways streaming services are aggravating their subscribers this week

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Streaming services like Netflix and Peacock have already found multiple ways to aggravate paying subscribers this week.

The streaming industry has been heating up. As media giants rush to establish a successful video streaming business, they often make platform changes that test subscribers’ patience and the value of streaming.

Below is a look at the most exasperating news from streaming services from this week. The scale of this article demonstrates how fast and frequently disappointing streaming news arises. Coincidentally, as we wrote this article, another price hike was announced.

We’ll also examine each streaming platform’s financial status to get an idea of what these companies are thinking (spoiler: They’re thinking about money).

Peacock’s raising prices

For the second time in the past year, NBCUniversal is bumping the price of Peacock, per The Hollywood Reporter (THR) on Monday.

As of July 18, if you try to sign up for Peacock Premium (which has ads), it’ll cost $7.99 per month, up from $5.99/month today. Premium Plus, (which doesn’t have ads), will go up from $11.99/month to $13.99/month. Annual subscription pricing for the ad plan is increasing 33.3 percent from $59.99 to $79.99, and the ad-free annual plan’s price will rise 16.7 percent from $119.99/year to $139.99/year.

Those already subscribed to Peacock won’t see the changes until August 17, six days after the closing ceremony of the 2024 Summer Olympics, which will stream on Peacock.

The pricing changes will begin eight days before the Olympics’ opening ceremony. That means that in the days leading up to the sporting event, signing up for Peacock will cost more than ever. That said, there’s still time to sign up Peacock for its current pricing.

As noted by THR, the changes come as NBCUniversal may feel more confident about its streaming service, which now includes big-ticket items, like exclusive NFL games and Oppenheimer (which Peacock streamed exclusively for a time), in addition to new features for the Olympics, like multiview.

Some outspoken subscribers, though, aren’t placated.

“Just when I was starting to like the service,” Reddit user MarkB1997 said in response to the news. “I’ll echo what everyone has been saying for a while now, but these services are pricing themselves out of the market.”

Peacock subscribers already experienced a price increase on August 17, 2023. At the time, Peacock’s Premium pricing went from $4.99/month to $5.99/month, and the Premium Plus tier from $9.99/month to $11.99/month.

Peacock’s pockets

Peacock’s price bumps appear to be a way for the younger streaming service to inch closer to profitability amid a major, quadrennial, global event.

NBCUniversal parent company Comcast released its Q1 2024 earnings report last week, showing that Peacock, which launched in July 2020, remains unprofitable. For the quarter, Peacock lost $639 million, compared to $825 million in Q4 2023 and $704 million in Q1 2023. Losses were largely attributed to higher programming costs.

Peacock’s paid subscriber count is lower than some of its rivals. The platform ended the quarter with 34 million paid users, up from 31 million at the end of 2023. Revenue also rose, with the platform pulling in $1.1 billion, representing a 54 percent boost compared to the prior year.

Sony bumps Crunchyroll prices weeks after shuttering Funimation

Today, Sony’s anime streaming service Crunchyroll announced that it’s increasing subscription prices as follows:

  • The Mega Fan Tier, which allows streaming on up to four devices simultaneously, will go from $9.99/month to $11.99/month
  • The Ultimate Fan Tier, which allows streaming on up to six devices simultaneously, will go from $14.99/month to $15.99/month

Crunchyroll’s cheapest plan ($7.99/month) remains unchanged. None of Crunchyroll’s subscription plans have ads. Crunchyroll’s also adding discounts to its store for each subscription tier, but this is no solace for those who don’t shop there on a monthly basis or at all.

The news of higher prices comes about a month after Sony shuttered Funimation, an anime streaming service it acquired in 2017. After buying Crunchyroll in 2021, Funimation was somewhat redundant for Sony. And now that Sony has converted all remaining Funimation accounts into Crunchyroll accounts (while deleting Funimation digital libraries), it’s forcing many customers to pay more to watch their favorite anime.

A user going by BioMountain on Crunchyroll said the news is “not great,” since they weren’t “a big fan of having to switch from Funimation to begin with, especially since that app was so much better” than Crunchyroll.

Interestingly, when Anime News Network asked on February 29 whether Crunchyroll would see prices rise over the next two years, the company told the publication that predicting a price change for that time frame would be improbable.

Crunching numbers

Crunchyroll had 5 million paid subscribers in 2021 but touted over 13 million in January, (plus over 89 million unpaid users, per Bloomberg). Crunchyroll president Rahul Purini has said that Crunchyroll is profitable, but not by how much.

In 2023, Goldman Sachs estimated that Crunchyroll would represent 36 percent of Sony Pictures Entertainment’s profit by 2028, compared to about 1 percent in March.

However, Purini has shown interest in growing the company further and noted to Variety in February an increase in “general entertainment” companies getting into anime.

Still, anime remains a more niche entertainment category, and Crunchyroll is more specialized than some other streaming platforms. With Sony making it so that anime fans have one less streaming service option and jacking up the prices for one of the limited options, it’s showing that it wants as much of the $20 billion anime market as possible.

Crunchyroll claimed today that its pricing changes are tied to “investment in more anime, additional services like music and games, and additional subscriber benefits.”

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Dead Boy Detectives turns Neil Gaiman’s ghostly duo into “Hardy Boys on acid”

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Solving paranormal mysteries with panache —

Supernatural horror detective series has witches, demons, and a charming Cat King.

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Edwin (George Rexstrew) and Charles (Jayden Revri) are the Dead Boy Detectives, ghosts who solve paranormal mysteries.

Enlarge / Edwin (George Rexstrew) and Charles (Jayden Revri) are the Dead Boy Detectives, ghosts who solve paranormal mysteries.

Netflix

For those eagerly anticipating the second season of Netflix’s stellar adaption of Neil Gaiman’s Sandman graphic novels, Dead Boy Detectives—the streaming plaform’s new supernatural horror detective series—is a welcome return to that weird magical world. Co-showrunner Steve Yockey (Supernatural), who created the series, aptly describes it as “the Hardy Boys on acid.” You’ve got vengeful witches, demons, psychic mediums, cursed masks, foul-mouthed parasitic sprites, talking cats—and, of course, the titular ghostly detectives, intent on spending their afterlife cracking all manner of mysterious paranormal cases.

(Some spoilers below, but no major reveals.)

Sandman fans first encountered the Dead Boys in the “Seasons of Mist” storyline, in which the ghost Edwin Paine and Charles Rowland meet for the first time in 1990. Edwin had been murdered at his boarding school in 1916 and spent decades in Hell. When Lucifer abandoned his domain, Hell was emptied, and Edwin was among the souls who returned to that boarding school. Charles was a living student whom Edwin tried to protect. Charles ultimately died and chose to join Edwin in his afterlife adventures. The characters reappeared in the Children’s Crusade crossover series, in which they decided to become detectives.

“As far as I was concerned, this was obviously the ultimate, the finest, most commercial idea I had ever had: two dead boys and a detective agency, you’re there,” said Gaiman during a virtual media event. “Nobody else saw it. It was just this mad conviction that sooner or later, there would be somebody out there in the world who would pick up one of these comics, read it, and see the same thing. Little did I know that baby Steve Yockey was out there waiting to be infected.”

Yockey championed the project from the start. “I fell in love with the comic when I was very young and I was going through a personal loss, and I found it weirdly comforting in a psychedelic way,” he said. It’s thanks to Yockey that the Dead Boys popped up in a S3 episode of Doom Patrol when he was a writer on that series. The characters proved so popular that HBO Max ordered a pilot for a Dead Boy Detectives series in 2021. The project subsequently moved to Netflix. Per the official premise:

Meet Edwin Paine (George Rexstrew) and Charles Rowland (Jayden Revri), “the brains” and “the brawn” behind the Dead Boy Detectives agency. Teenagers born decades apart who find each other only in death,  Edwin and Charles are best friends, ghosts… who solve mysteries. They will do anything to stick together—including escaping evil witches, Hell and Death herself. With the help of a clairvoyant named Crystal Palace (Kassius Nelson) and her friend Niko (Yuyu Kitamura), they are able to crack some of the mortal realm’s most mystifying paranormal cases.

“I knew the things I wanted to hang onto in the adaptation were the relationship between the boys and Death, because that drives our action, and also this sense of, don’t wait until you’re looking death in the face to start living,” said Yockey. For his co-showrunner, Beth Schwartz, it was the close friendship between Edwin and Charles, forged out of their painful pasts, that cemented her love for the series. “It’s this horrible tragedy when you really think about it,” she said. “It’s these two boys who didn’t get to live past their teenage years. But because of that tragedy they created this amazing friendship.”

The Dead Boys came out of the Sandman canon, but that series was at Netflix, while Yockey was initially developing Dead Boy Detectives for HBO Max, So Gaiman and Yockey essentially “filed off the Sandman serial numbers” for their early scripts, per Gaiman. When the series moved to Netflix, the streaming platform’s only request was to set the story back in the Sandman universe. Charles and Edwin are evading Death to solve mysteries in their afterlife, so naturally, Kirby Howell-Baptiste makes a cameo in a pilot scene penned by Gaiman, reprising her role as Death. One other Endless makes an appearance late in the season, and eagle-eyed fans might spot nods to the original Sandman artwork in the set design.

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Password crackdown leads to more income for Netflix

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Sharing is caring —

Netflix to stop reporting subscriber numbers, prioritizing viewer engagement instead.

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screen with netflix login

Bloomberg

Netflix’s crackdown on password sharing helped the streaming service blow past Wall Street’s earnings forecasts, but its shares fell after it said it planned to stop regularly disclosing its subscriber numbers.

The company’s operating income surged 54 percent in the first quarter as it added 9.3 million subscribers worldwide, proving that the efforts to reduce password sharing it launched last year have had more lasting benefits than some investors expected.

However, Netflix said on Thursday that from next year it would stop revealing its total number of subscribers, a metric that has been a crucial benchmark for investors in the streaming era.

In its letter to shareholders, Netflix said it was shifting its focus to engagement—the amount of time its subscribers spend on the service—while also developing new price points and sources of revenue, including advertising.

“Each incremental member has a different business impact” with the new subscription plans, Greg Peters, co-chief executive, said in a call with investors. “And that means the historical simple math that we all did—the number of members times the monthly price—is increasingly less accurate in capturing the state of the business.”

He added that Netflix would “periodically update” on subscriber figures when it hits “major milestones.”

Paolo Pescatore, an analyst at PP Foresight, said Netflix’s decision to no longer disclose quarterly subscriptions starting in 2025 “will not go down well.”

“No matter the company’s attempt to switch focus from subscribers to financials, net [subscriber] adds is the key metric everyone wants to see,” he said.

The latest results showed there was still room for growth as a result of its password crackdown and push into advertising, Pescatore added. Netflix said memberships to its advertising-supported tier rose 65 percent from the previous quarter.

Before Thursday’s report the streaming pioneer’s shares had risen 30 percent this year, significantly outperforming the broader market. The shares fell 4.7 percent in after-hours trading following the earnings report.

Netflix executives said among their primary goals was improving the variety and quality of their entertainment, including television shows, movies, and games. It recently appointed Dan Lin as the new head of its film division.

“Even though we have made and we are making great films, we want to make them better,” said Ted Sarandos, co-chief executive. He added that he saw no need to spend more money on content.

Netflix has been pushing further into sports-related content, including a $5 billion deal to livestream World Wrestling Entertainment’s flagship Raw program in the US over the next decade.

It is also offering a livestream of a fight between Mike Tyson and Jake Paul in July, leading analysts to question whether the company plans to move further into live sport. “We’re not anti-sports, but pro-profitable growth,” Sarandos said.

Netflix reported earnings of $5.28 a share, well ahead of Wall Street forecasts of $4.51, while its number of subscribers rose 16 percent to 269 million from a year earlier.

Its revenue forecast for the current quarter of $9.49 billion was slightly below Wall Street forecasts of about $9.5 billion. But Netflix said it expected revenue to grow between 13 and 15 percent for the full year.

The company said it generated strong engagement in the first quarter from subscribers in the UK with Fool Me Once, which had 98 million views. Other standouts included the drama series Griselda with 66.4 million views and 3 Body Problem with about 40 million.

© 2024 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

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Netflix doc accused of using AI to manipulate true crime story

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Everything is not as it seems —

Producer remained vague about whether AI was used to edit photos.

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A cropped image showing Raw TV's poster for the Netflix documentary <em>What Jennifer Did</em>, which features a long front tooth that leads critics to believe it was AI-generated.” src=”https://cdn.arstechnica.net/wp-content/uploads/2024/04/What-Jennifer-Did-Netflix-poster-cropped-800×450.jpg”></img><figcaption> <p><a data-height=Enlarge / A cropped image showing Raw TV’s poster for the Netflix documentary What Jennifer Did, which features a long front tooth that leads critics to believe it was AI-generated.

An executive producer of the Netflix hit What Jennifer Did has responded to accusations that the true crime documentary used AI images when depicting Jennifer Pan, a woman currently imprisoned in Canada for orchestrating a murder-for-hire scheme targeting her parents.

What Jennifer Did shot to the top spot in Netflix’s global top 10 when it debuted in early April, attracting swarms of true crime fans who wanted to know more about why Pan paid hitmen $10,000 to murder her parents. But quickly the documentary became a source of controversy, as fans started noticing glaring flaws in images used in the movie, from weirdly mismatched earrings to her nose appearing to lack nostrils, the Daily Mail reported, in a post showing a plethora of examples of images from the film.

Futurism was among the first to point out that these flawed images (around the 28-minute mark of the documentary) “have all the hallmarks of an AI-generated photo, down to mangled hands and fingers, misshapen facial features, morphed objects in the background, and a far-too-long front tooth.” The image with the long front tooth was even used in Netflix’s poster for the movie.

Because the movie’s credits do not mention any uses of AI, critics called out the documentary filmmakers for potentially embellishing a movie that’s supposed to be based on real-life events.

But Jeremy Grimaldi—who is also the crime reporter who wrote a book on the case and provided the documentary with research and police footage—told the Toronto Star that the images were not AI-generated.

Grimaldi confirmed that all images of Pan used in the movie were real photos. He said that some of the images were edited, though, not to blur the lines between truth and fiction, but to protect the identity of the source of the images.

“Any filmmaker will use different tools, like Photoshop, in films,” Grimaldi told The Star. “The photos of Jennifer are real photos of her. The foreground is exactly her. The background has been anonymized to protect the source.”

While Grimaldi’s comments provide some assurance that the photos are edited versions of real photos of Pan, they are also vague enough to obscure whether AI was among the “different tools” used to edit the photos.

One photographer, Joe Foley, wrote in a post for Creative Bloq that he thought “documentary makers may have attempted to enhance old low-resolution images using AI-powered upscaling or photo restoration software to try to make them look clearer on a TV screen.”

“The problem is that even the best AI software can only take a poor-quality image so far, and such programs tend to over sharpen certain lines, resulting in strange artifacts,” Foley said.

Foley suggested that Netflix should have “at the very least” clarified that images had been altered “to avoid this kind of backlash,” noting that “any kind of manipulation of photos in a documentary is controversial because the whole point is to present things as they were.”

Hollywood’s increasing use of AI has indeed been controversial, with screenwriters’ unions opposing AI tools as “plagiarism machines” and artists stirring recent backlash over the “experimental” use of AI art in a horror film. Even using AI for a movie poster, as Civil War did, is enough to generate controversy, the Hollywood Reporter reported.

Neither Raw TV, the production company behind What Jennifer Did, nor Netflix responded to Ars’ request for comment.

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The lines between streaming and cable continue to blur

ads, cable, Disney, Disney Plus, netflix, streaming, Tech / /

Here we go again —

Disney+ to offer 24/7 channels to play Star Wars content, commercials.

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O.B., aka Ouroboros, in Marvel's <em>Loki</em> show, which streams on Disney+.” src=”https://cdn.arstechnica.net/wp-content/uploads/2024/04/ARC-201-10072_R-1200×800-5b2df79-800×533.jpg”></img><figcaption> <p><a data-height=Enlarge / O.B., aka Ouroboros, in Marvel’s Loki show, which streams on Disney+.

Despite promises of new and improved TV and movie viewing experiences, streaming services remain focused on growing revenue and app usage. As a result of that focus, streaming companies are mimicking the industry they sought to replace—cable.

On Monday, The Information reported that Disney plans to add “a series” of channels to the Disney+ app. Those channels would still be streamed and require a Disney+ subscription to access. But they would work very much like traditional TV channels, featuring set programming that runs 24/7 with commercials. Disney hasn’t commented on the report.

Disney is exploring adding channels to Disney+ with “programming in specific genres, including either Star Wars or Marvel-branded shows,” The Information said, citing anonymous “people involved in the planning.” It’s unknown when the Disney+ channels are expected to launch.

The report comes as streaming services continue trying to find ways to capitalize off cable companies’ customer base. NBCUniversal’s Peacock streaming service already offers subscribers over 50 always-on live channels. Hulu and Paramount+ offer live TV with cable channels. Streaming platforms are also eager to license content normally delegated to traditional TV channels, including old shows like Suits, the 2023 streaming record-setter, and live sporting events like WWE Raw.

Channel surfing 2.0

If you’ve followed the streaming industry lately, you won’t be surprised to hear that ad dollars are reportedly behind the push for live channels. Disney+, like many streaming services, aims to be profitable by the end of Disney’s 2024 fiscal year and extract as much revenue from each subscriber as possible (including by using tactics like password crackdowns) to fuel profits.

The news follows similar moves by Disney, including adding Hulu to the Disney+ app, as well as plans to add ESPN to Disney+, too, according to The Information. Disney is also attempting to launch a joint sports-streaming app with Fox and Warner Bros. Discovery (WBD). It’s not hard to imagine Disney one day (assuming the app ever debuts) making the sports app’s content accessible through Disney+.

“The idea is to make Disney+ a service that has something for everyone, anytime,” The Information reported.

That sounds an awful lot like cable, which spent years growing customers’ monthly bills by adding more channels and bundles aimed at specific interests, like children’s entertainment, sports, and lifestyle. The ability to hop from on-demand Disney kids’ movies to on-demand sitcoms on Hulu to live programming centered on (the seemingly endless piles of) Marvel and Star Wars content feels a lot like channel surfing. It wasn’t too long ago when channel surfing was viewed as a time-suck.

Netflix has also reportedly considered ways to unite other streaming platforms with Netflix in order to extend the amount of time spent on Netflix. In late 2022, Netflix “explored creating a store within its app for users to subscribe to and watch other streaming services, all without leaving the Netflix app,” The Information said, citing an unnamed person “who was involved in those exploratory discussions.” Netflix reportedly decided not to move ahead with the plans for now but still could. It hasn’t commented on The Information’s report.

As we saw with Netflix’s password crackdown and streaming’s shift to ads, streaming companies tend to copy each other’s strategies for revenue growth. And live channels could be something more streaming companies get involved in, as WBD and Amazon, as examples, already have (albeit separate from their flagship, on-demand streaming apps, which differs from what Disney+’s live channel reportedly will reportedly be like).

Disney, notably, is no stranger to the business of online live channels, having 21 similar offerings within the ABC.com app, including a channel for ABC News and another for General Hospital.

Subscription-based streaming services may even have an easier time competing for ad dollars than free, ad-supported TV (FAST) streaming channels, such as those on Tubi and Pluto TV. Susan Schiekofer, chief digital investment officer for GroupM, the top US ad-buying company, told The Information that advertisers might feel more comfortable allotting dollars to ad-supported channels that are tied to users who have already spent money on a subscription.

Streaming services initially were a way to get only the content you wanted on demand and commercial-free. But the report about Disney+ and Netflix are just two examples of growing interest in reinvigorating the strategies of linear TV. Instead of jumping from network to network within cable, there’s interest in getting people to jump from one streaming service to another within one platform—with plenty of commercials along the way.

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Facebook let Netflix see user DMs, quit streaming to keep Netflix happy: Lawsuit

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A promotional image for Sorry for Your Loss, with Elizabeth Olsen

Enlarge / A promotional image for Sorry for Your Loss, which was a Facebook Watch original scripted series.

Last April, Meta revealed that it would no longer support original shows, like Jada Pinkett Smith’s Red Table Talk talk show, on Facebook Watch. Meta’s streaming business that was once viewed as competition for the likes of YouTube and Netflix is effectively dead now; Facebook doesn’t produce original series, and Facebook Watch is no longer available as a video-streaming app.

The streaming business’ demise has seemed related to cost cuts at Meta that have also included layoffs. However, recently unsealed court documents in an antitrust suit against Meta [PDF] claim that Meta has squashed its streaming dreams in order to appease one of its biggest ad customers: Netflix.

Facebook allegedly gave Netflix creepy privileges

As spotted via Gizmodo, a letter was filed on April 14 in relation to a class-action antitrust suit that was filed by Meta customers, accusing Meta of anti-competitive practices that harm social media competition and consumers. The letter, made public Saturday, asks a court to have Reed Hastings, Netflix’s founder and former CEO, respond to a subpoena for documents that plaintiffs claim are relevant to the case. The original complaint filed in December 2020 [PDF] doesn’t mention Netflix beyond stating that Facebook “secretly signed Whitelist and Data sharing agreements” with Netflix, along with “dozens” of other third-party app developers. The case is still ongoing.

The letter alleges that Netflix’s relationship with Facebook was remarkably strong due to the former’s ad spend with the latter and that Hastings directed “negotiations to end competition in streaming video” from Facebook.

One of the first questions that may come to mind is why a company like Facebook would allow Netflix to influence such a major business decision. The litigation claims the companies formed a lucrative business relationship that included Facebook allegedly giving Netflix access to Facebook users’ private messages:

By 2013, Netflix had begun entering into a series of “Facebook Extended API” agreements, including a so-called “Inbox API” agreement that allowed Netflix programmatic access to Facebook’s users’ private message inboxes, in exchange for which Netflix would “provide to FB a written report every two weeks that shows daily counts of recommendation sends and recipient clicks by interface, initiation surface, and/or implementation variant (e.g., Facebook vs. non-Facebook recommendation recipients). … In August 2013, Facebook provided Netflix with access to its so-called “Titan API,” a private API that allowed a whitelisted partner to access, among other things, Facebook users’ “messaging app and non-app friends.”

Meta said it rolled out end-to-end encryption “for all personal chats and calls on Messenger and Facebook” in December. And in 2018, Facebook told Vox that it doesn’t use private messages for ad targeting. But a few months later, The New York Times, citing “hundreds of pages of Facebook documents,” reported that Facebook “gave Netflix and Spotify the ability to read Facebook users’ private messages.”

Meta didn’t respond to Ars Technica’s request for comment. The company told Gizmodo that it has standard agreements with Netflix currently but didn’t answer the publication’s specific questions.

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The people of Earth prepare for war in final trailer for 3 Body Problem

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“What do you think is happening?” —

“When your consciousness ends in one world, it could continue to exist in many other worlds.”

–

Netflix’s new sci-fi series 3 Body Problem makes its world premiere tonight at the SXSW Film & Television festival in Austin.

The countdown continues for the hotly anticipated debut of 3 Body Problem, Netflix’s eight-episode sci-fi series adapted from the award-winning novel The Three-Body Problem by Liu Cixin, the first book in his Remembrance of Earth’s Past trilogy. Those attending the SXSW Film & Television Festival in Austin will get to see the series’ world premiere tonight. The rest of us have to wait until later this month, but in the meantime, the streaming platform has released a final trailer.

(Some spoilers for the novel below.)

The 3-Body Problem‘s narrative is told in a nonlinear fashion, jumping between a young astrophysicist, Ye Wenjie, who witnesses her father being beaten to death by Red Guards during the Cultural Revolution, and Ye’s return to Tsinghua University as an established professor many years later. During the earlier timeline, Ye figures out a means of sending an interstellar message to possible extraterrestrial civilizations and receives a response from a planet called Trisolaris. (As its name implies, the planet has three suns, which wreak havoc on Trisolaris via unpredictable “chaotic periods”—hence the novel’s title, which refers to a classic problem in celestial mechanics.) Despite being warned that the aliens intend to invade and conquer Earth, Ye responds to the message and invites them to do so, disillusioned by the state of the world.

The Trisolarians depart on their 450-year journey. Meanwhile, there have been complicated developments on Earth as people learn of the pending arrival of aliens. There is a secret society of scientists, political leaders, and other scholars who share Ye’s sentiment about the state of humanity, which, over time, splits into three competing factions. Some members continue to support the full destruction of humanity; others plan to help the aliens in exchange for the survival of themselves and their descendants; and still others regularly play a VR game called Three-Body and attempt to find a computational solution to the actual three-body problem that plagues Trisolaris. That’s a recipe for tension and conflict, which plays out in various ways throughout the novel.

The Netflix series was created by David Benioff, D.B. Weiss (Game of Thrones), and Alexander Woo (True Blood). Per the official premise:

A young woman’s fateful decision in 1960s China reverberates across space and time into the present day. When the laws of nature inexplicably unravel before their eyes, a close-knit group of brilliant scientists join forces with an unorthodox detective to confront the greatest threat in humanity’s history.

Zine Tseng stars as the young Ye Wenjie, with Rosalind Chao playing the older version. The cast also includes Benedict Wong as Da Shi, an intelligence officer who is investigating the mysterious deaths of scientists; Liam Cunningham as Thomas Wade, the charismatic leader of a global intelligence operation; Saamer Usmani as Raj Varma, a naval officer; and Jonathan Pryce as a wealthy eccentric named Mike Evans who helps set up a secret society. Ben Schnetzer plays the younger version of Mike Evans, while Marlo Kelly plays Tatiana, who was raised in Evans’ organization.

The “Oxford Five” are John Bradley as Jack Rooney; Alex Sharp as Will Downing, a sixth-form physics teacher; Jess Hong as Jin Cheng, a brilliant theoretical physicist whose curiosity is both a strength and a weakness; Jovan Adepo as Saul Durand, another physicist; and Eiza González as Auggie Salazar, a pioneer in nanotechnology (comparable to the character of Wang Miao in the novel). Sea Shimooka plays Sophon, an avatar in the show’s mysterious VR game.

The first teaser was released last June, followed in November by an exclusive clip showing Jack Rooney trying on a mysterious VR headset—only to learn from the avatar Sophon that he wasn’t “invited.” Netflix debuted the official full trailer for 3 Body Problem at CES in Las Vegas in January, and it focused heavily on the central mystery surrounding the deaths of 30 scientists in a single month, as well as people starting to see numbers representing some kind of countdown before their eyes.

This final trailer focuses a bit more on the backstory, namely the detection of the famous WOW! signal in 1977 with a glimpse of Ye Wenjie’s personal tragedy during China’s Cultural Revolution. The older Ye Wenjie tells us that “they are coming,” as others wonder who “they” might be. Of course, it’s aliens, bringing the threat of impending war as Dinah Washington croons “This Bitter Earth” in the background, lending an almost elegiac mood to the trailer. At one point, Ye Wenjie asks Jin how she will be remembered, and Jin replies, “As someone who fought back.”

All eight episodes of 3 Body Problem will hit Netflix on March 21, 2024.

Listing image by YouTube/Netflix

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Netflix, hungry for more growth, signals more price hikes

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“pay a little extra” —

Basic ad-free plan being ripped from subscribers in Canada, UK first.

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Jason Bateman and Laura Linney in Ozark

Enlarge / Jason Bateman and Laura Linney in the Netflix original series Ozark.

Netflix subscribers can expect more price hikes as the company looks to grow revenue in 2024. In its Q4 2023 letter to shareholders, Netflix also revealed plans to eliminate the cheapest ad-free plan available to users.

In the January 23 letter (PDF), Netflix said:

As we invest in and improve Netflix, we’ll occasionally ask our members to pay a little extra to reflect those improvements, which in turn helps drive the positive flywheel of additional investment to further improve and grow our service.

The statement will be unsavory for frugal streamers who have recently endured price hikes from Netflix and other streaming services. In January 2022, Netflix increased the price of its Basic no-ads tier from $8.99 per month to $9.99/month. In October 2023, that same plan went up to $11.99/month. Meanwhile, Netflix’s Premium ad-free plan increased from $17.99/month to $19.99/month in January 2022 and then to $22.99/month in October.

Netflix has attributed its price hikes to added features, like 4K streaming and gaming. But subscription fees remain the biggest source of revenue for Netflix, giving it obvious reason to leave a door open for even more price hikes in the near future.

Netflix has also used price hikes to encourage users to subscribe to its ad tier, where it has made more average revenue per user. Netflix with ads has cost $6.99/month since launching in November 2022 and has seen feature improvements, like moving from 720p resolution streams to 1080p.

Killing off the cheapest ad-free plan

In another attempt to push subscribers into watching ads on Netflix, the streaming company stopped offering new subscribers the aforementioned $11.99/month, ad-free Basic plan. It included 720p resolution, downloadable content, and support for one device. The change spiked the cheapest price for ad-free Netflix 55.06 percent to $15.49/month.

Netflix customers who were already subscribed to the ad-less Basic plan have been allowed to keep using it. But it seems like that grace period will soon end.

Netflix’s letter reads:

The ads plan now accounts for 40 percent of all Netflix sign-ups in our ads markets and we’re looking to retire our Basic plan in some of our ads countries, starting with Canada and the UK in Q2 and taking it from there.

Netflix originally cut the Basic plan in Canada before following suit in the US and UK. Combined with the fact that most of Netflix’s North American users are from the US, it’s expected that Netflix will cut the Basic plan in the US, too.

Netflix’s letter said ad membership grew when it stopped offering the Basic ad-free plan to new subscribers. Ad tier membership grew almost 70 percent quarter over quarter in Q4 2023. The tier has over 23 million subscribers, per Bloomberg.

During an earnings call on Tuesday, Netflix co-CEO Greg Peters noted Netflix’s 2024 priorities as including “pricing optimization” to help improve operating margins and grow revenue and its ad business.

Netflix’s ad business: years of work ahead

Netflix said this week that it has 260.28 million subscribers globally (for comparison, Disney+ has 66.1 million subscribers, Hulu 48.5 million, and Amazon Prime Video is estimated to have about 180.1 million). That’s after adding 13.1 million subscribers in Q4 2023, Netflix’s biggest Q4 yet.

But despite currently besting competitors in subscriber count and cash flow, Netflix faces similar challenges when it comes to wooing advertisers that may be unaccustomed to working with streaming services (which previously had limited advertising opportunities). While Netflix has seen revenue grow from other efforts, like password crackdowns and price hikes, it plans to focus heavily on scaling its ad business over the coming years.

“I’d say we got years of work ahead of us to take the ads business to the point where it’s a material impactor to our general business,” Peters said.

Netflix is already trying to strong-arm customers onto its ad plan. The streaming bundle plan that T-Mobile offers will no longer include ad-free Netflix. Anyone who had ad-less Netflix through a T-Mobile bundle is getting downgraded. Peters said this week that under the previous bundle, “it was hard to make the economics work for everyone.”

Ultimately, the amount of ad dollars up for grabs, including from the declining linear TV networks, is too tasty for streaming services to pass up.

On Tuesday, Netflix announced a $5 billion, 10-year deal to stream World Wrestling Entertainment’s (WWE’s) Raw live on Netflix. The company was able to win a deal out from long-time Raw network USA, which is owned by NBCUniversal. NBCUniversal’s Peacock streaming service also has the rights to some WWE events. But Netflix’s seizure of Raw illustrates its interest in ad dollars from live sports and its pull and budget compared to aging broadcast and cable networks. Looking ahead, we expect to see Netflix consider additional live events that can appeal to advertisers.

Netflix said this week that it’s not anticipating the same amount of subscriber growth that it enjoyed in 2023 in 2024. But it does expect double-digit revenue growth. That newfound money has to come from somewhere. If Netflix can’t pull it all from new subscribers, it will force it out of existing customers through higher prices and ads.

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Netflix won’t have a Vision Pro app, compromising the device’s appeal

apple vision pro, culture, netflix, Tech, visionOS / /

App Support —

You’ll be able to watch via the web browser, but that’s far from ideal.

–

Vision Pro will allow users to watch movies on a virtual TV set.

Enlarge / Vision Pro will allow users to watch movies on a virtual TV set.

Apple

In the leadup to Vision Pro preorders tomorrow, Apple has seemingly been prioritizing the message that the device will be an ideal way to watch movies and TV shows. In many ways, that might be true, but there’s one major caveat: Netflix.

In a statement reported by Bloomberg today, Netflix revealed that it does not plan to offer an app for Vision Pro. Instead, users will have to use a web-based interface to watch the streaming service.

Netflix compares the experience to the Mac, but there are a few reasons this won’t be an ideal experience for users. First, the iPad and iPhone mobile apps support offline viewing of downloaded videos. That’s particularly handy for when you’re flying, which is arguably one of the best use cases for Vision Pro.

Unfortunately, Netflix doesn’t support offline downloads on the web. It also remains to be seen what resolution will be achievable—the maximum resolution of a Netflix stream depends on the browser, with most capping out at 720p. That wouldn’t look so great on a 100-foot virtual screen.

Granted, Netflix streams at up to 4K on Safari for macOS, but we don’t know if that will be the case for Safari on Vision Pro.

It will also make launching the app more complicated, and the interface won’t be as nice to use as a native app.

There are two ways Netflix could have supported visionOS more directly. The company could have developed a full-fledged mixed reality app like Disney+ did, with visionOS-specific features. Or it could have at least adapted its iPad app to work well within visionOS.

The latter, while not completely trivial, is relatively easy for a company with Netflix’s development resources, so it’s hard not to see this as a deliberate snub.

This isn’t the first time Netflix has chosen not to play nice with a new Apple initiative. Netflix is the most notable service missing from Apple’s useful TV app on Apple TV and iPhone, which aggregates your viewing activity and makes recommendations that link out to individual streaming apps.

Netflix and Apple now compete in the streaming space. In particular, both have courted awards for their original films with limited theatrical releases and aggressive campaigns. That could be a motivator, but we can’t know what Netflix’s leadership is thinking for sure.

Most other major streaming services, including Disney+, Peacock, Max, and Amazon Prime Video, will have working visionOS apps when the device launches in early February, making Netflix a notable outlier.

While not a deal-breaker for everyone, the omission cuts at the heart of Apple’s messaging around Vision Pro’s value proposition; the steep $3,499 price could be seen as worth the investment if you see the device as replacing both an iPad and a high-end TV. But that pitch is a little bit compromised if the experience on that high-end TV is subpar for one of the most popular streaming services.

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