Only that’s not exactly what Disney+ will have when it launches on Nov. 12. Thanks to existing streaming deals, Disney is still a ways away from consolidating its many media properties on the service. And in an interesting role reversal, Disney actually stands to lose some of its own films to Netflix (NASDAQ: NFLX) — for a little while, anyway.

From Netflix to Disney+ — and from Disney+ to Netflix

When it comes to licensing deals, the big narrative right now is certainly not that Disney+ is losing content. On the contrary: Disney is supposed to be bringing all of its content home. That’s shaping up to be a major problem for existing subscription video on demand (SVOD) services, particularly Netflix.

When Netflix launched, it had its pick of the litter when it came to streaming deals: It was, after all, the only game in town. Then, the competition arrived and started to grow. A big part of the problem for Netflix is that its newest streaming rivals aren’t just tech companies — many are media giants looking to consolidate their TV and movie firepower behind their own services. Just as original content helps Netflix operate more efficiently, it also makes sense for content owners to create streaming services — if Netflix makes “original shows,” these show and movie owners are creating “original streaming services.” It’s the same formula in reverse.

So Netflix isn’t just gaining competition. It’s losing titles, including popular shows like The Office (which is heading to Comcast‘s new NBCUniversal SVOD service, Peacock) and, of course, massively popular Disney films like Star Wars: The Force Awakens and Avengers: Infinity War.

These films are coming back to Disney+, because they’re owned by Disney. It makes sense that Netflix would lose that content, but why would it work the other way around?

Disney films, far from home

Netflix may be losing a lot to Disney+, but the reverse is also true. Disney+ will reportedly launch with some films in its library that will later disappear, at which point they’ll be available on Netflix.

Why? Disney inked a streaming deal with Netflix for those titles before realizing its the extent of its own streaming ambitions. It’s a fairly simple sequence of events that leads to an amusingly counter-intuitive result — and a pretty unfortunate one, from Disney’s perspective. It was supposed to be pulling the rug out from under Netflix, losing titles to its strongest rival in its first few months as a streaming service isn’t exactly what Disney was hoping to see.

Disney is being tight-lipped about the awkward reality — the company isn’t saying which films are going to disappear. The most we know is that, according to CNET, one deal will move “popular movies from 2016 through 2018” to Netflix for roughly six years.

A reprieve for Netflix

Whatever these films are, they will almost certainly end up back in the Disney+ library after their long stint with Netflix. In the meantime, though, these titles buy Netflix some time before the full weight of its budding licensed-content crisis comes crashing down.

Depending on the films, six years could be significant: If Netflix is keeping any Marvel or Star Wars films for that long, it would be a major coup. Holding onto Marvel fans, and onto subscribers in general, will be a big deal for Netflix as it prepares to reinvest in original content and create the shows and movies that will keep it afloat long after Disney’s titles have gone home.

The post In a Role Reversal, Disney Will Lose Titles to Netflix appeared first on The Motley Fool Canada.

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TiVo (NASDAQ: TIVO) built its brand on a product that, at the time of its introduction, was revolutionary: the digital video recorder, better known as the DVR. It allowed users to record shows from cable, which they could then watch later at their leisure.

A crucial part of the attraction: DVRs allowed consumers to skip the commercials. Fast-forwarding through ads on recorded shows became the norm for DVR users, which drove big trends in advertising and TV. The “sports bubble” came into being largely because fans like to watch sports live — making them theoretically “DVR proof” and therefore more valuable to advertisers. Now, TiVo is doing something seemingly contradictory: It’s embracing ads.

TiVo’s ad rollout

Some TiVo customers who sat down to watch recorded content this September were greeted by ads that played before their program. The apparent trial program, which was first reported by Zatz Not Funny, appears to have gone well: TiVo has since confirmed that it will roll out ads to all of its customers within 90 days.

The ads will be skippable, which may soften the backlash from customers. But there is certainly potential for angry consumers, especially since TiVo charges a subscription fee. Customers are already complaining online.

TiVo, legacy pay TV, and platforms

Rolling out ads on its platform will give TiVo a new source of income, but at the cost of annoying some customers. It seems to think it will work, but the move could certainly disrupt the company’s relationship with its own subscriber base.

Whether or not this works out, one thing is for sure: TiVo could use a win. The company hasn’t enjoyed the same growth as tech investors have seen elsewhere in the digital/streaming video space. Cable companies and others have created their own DVR products, and customers have grown used to getting their DVR included with, or at least offered alongside, their cable or satellite subscription.

And legacy pay TV as a whole is a shrinking market, meaning TiVo’s main business model relies on capturing a piece of a pie that grows ever smaller. It does offer a DVR product designed to work with over-the-air (OTA) antennas, but that market — which is also populated by companies like Tablo and Channel Master — doesn’t rival the cable one. Given the lack of channels, it may never compare (a DVR is only as useful as the selection of content it can record); and on top of that, Amazon.com is entering the OTA DVR space.

TiVo announced earlier this month that it will split into two businesses: one specializing in patents and another focused on products. The company is also rolling out a new recommendation and content-discovery feature powered by artificial intelligence, and it is launching a device that it says will be its cheapest yet.

Perhaps most importantly, it’s starting a service called TiVo Plus. Designed to work as a hub similar to the Apple (NASDAQ: AAPL) TV app, this is a service that TiVo hopes will grow its platform in the direction of streaming platforms like Roku (NASDAQ: ROKU). If TiVo can become something more akin to a Roku-type platform, its advertising won’t look quite as contradictory to its core offerings. But the other guys have the lead: Roku’s more than 30 million users eclipse the 22 million who use what TiVo calls “TiVo’s advanced television experiences.”

TiVo’s uncertain future

There’s no bright future in a business strictly focused on DVRs, and TiVo seems to recognize this. But entering the platform wars now may be too little, too late: The competition between streaming “hubs,” including both device/operating systems like Roku and in-app hubs like the Apple TV app, is already robust. TiVo may be able to leverage its existing user base, but its current monetization plan has the potential to rile up that base. It appears to be on shaky ground with this move.

The post TiVo’s New Monetization Scheme appeared first on The Motley Fool Canada.

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Of course, trade isn’t just about countries. It’s also about corporations, many of which are de facto international “citizens.” What the United States imports from China includes things made by American companies — including Apple (NASDAQ: AAPL), which relies heavily on Chinese manufacturing. Since President Trump’s trade talks with China began to fall apart in late 2017 and early 2018, Apple has been scrambling to develop new strategies in the face of imminent new tariffs in a larger trade war with China.

A bite out of Apple

More than a few companies stand to lose big from the Trump administration’s tariffs. But some are considerably better off than others: Samsung (OTC: SSNLF), for instance, makes products in China, but it manufactures a smaller portion of its offerings in China than Apple does. Samsung’s more geographically diverse manufacturing, which includes manufacturing centers in Vietnam and South Korea, exposes fewer products to the tariffs and could make it easier for Samsung to shift its manufacturing around to avoid paying up.

By contrast, Apple’s manufacturing is heavily concentrated in China. And the many products that Apple makes in China include a staggering number that are slated to be hit by tariffs by the end of the year: A full 92% of Apple’s Chinese-made products will incur tariffs, according to analysis from Reuters.

And it goes without saying that Apple suffers more in a trade war with China than, for instance, Alphabet’s Google or even Amazon.com, because tech hardware forms a larger part of Apple’s business than it does for either of those other two tech companies.

In other words, tariffs aren’t great for any company with a foothold in China, but Apple is particularly vulnerable to the new tariffs because of its concentration of manufacturing in the country.

Apple has added factories in other countries, notably India and Brazil, in recent years. But those are largely used to meet domestic demand within those countries, and Apple has grown its presence in China over the same period.

The Mac Pro stays at home

Apple’s manufacturing outside of China may form a relatively small portion of its overall production, but the company is clearly looking for ways to ease its reliance on Chinese factories. With tariffs looming, Apple made an announcement on Monday, Sept. 23: The company will manufacture its new line of Mac Pros in Austin, Texas.

This is not the first time that Apple has made Mac Pros domestically, but it was still a surprising announcement — a seeming contradiction that helps illustrate the complexities of tariffs. Apple claimed that it needed tariff exemptions on the components it uses to manufacture its Mac Pros in order to justify staying in the U.S. If Apple had to pay tariffs on the components, it would just make the whole computer in China and pay tariffs to import it instead — or, at least, that was the threat. Eventually, Apple got its waivers.

The fact that tariffs could actually keep manufacturing out of the U.S. shows how complicated they can be, and also drives home Apple’s reliance on China for more than just the final assembly of its products.

Far from over

Making computers in Texas is a good way to avoid tariffs, but it’s also not new, and isn’t a good reason to believe that Apple is any less dependent on China than it was before. And it’s particularly telling that Apple felt it needed tariff exemptions on a product it is making domestically: It is not just Apple’s manufacturing plants but its suppliers that are disproportionately located in China. In 2015, 44.9% of Apple’s suppliers were based in China; by 2019, it was 47.6%. That may make it tough for Apple to make things domestically without tariff exemptions of the sort that it just won.

Apple investors can be happy with this latest development, but the company’s overall position in relation to the tariffs on Chinese goods remains pretty unfortunate. It will take more than keeping a Texas manufacturing center open to beat the tax.

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Amazon’s business is about more than just hardware, but last Wednesday’s event made it clear that the company still sees a big role for hardware in its future.

Alexa is on the go

Amazon’s Alexa has always had a fair bit in common with Apple‘s Siri and Alphabet‘s Google Assistant. But there were also differences in use cases. End users tend to use voice assistants on mobile devices, a trend that seems extremely likely to be driven by Google Assistant and Siri, since so many smartphones come with those services on board. Alexa has thus far lived primarily on devices for the home, most notably Amazon’s Echo line of smart speakers.

Amazon’s big hardware event included the unveiling of several products that promise to make Alexa more mobile. Wireless headphones (the Echo Buds), smart eyeglasses (Echo Frames), and smart jewelry (Echo Loop, a smart ring) will give Alexa a free-range future. It will still be tough for Alexa to compete with Siri and Google Assistant in areas like navigation, but getting users accustomed to have Alexa on the go should help give it a foothold outside of the home.

Getting framed

Of the on-the-go Alexa devices, the Echo Frames are easily the most interesting. They’re extremely reminiscent of the infamous Google Glass, which had a rough public run and now exist only in an Enterprise Edition. Still, Amazon seems ready to give smart eyeglasses another chance — a limited chance, anyway.

Like Google did, Amazon is starting with a pilot program of sorts. Echo Frames will initially be available by invitation-only. They’ll cost just $179.99 by invitation and $249.99 thereafter, a far cry from Google Glass’ initial price of $1,500 (though it’s not yet clear if Amazon is selling its debut smart eyeglasses at a loss).

Amazon’s Alexa experiments don’t always have obvious near-term payoffs, and investors shouldn’t expect to see many Echo Frames on the street anytime soon. Still, this program suggests that Amazon sees a future for smart eyeglasses. Joining the race now may make a big difference if and when they become useful enough to go mainstream.

Chef Alexa

Amazon is clearly interested in taking Alexa outside of the home to compete with on-the-go assistants like the iOS-native Siri. But the company is also making sure not to cede the home space to competitors like Google, which offers an Echo-like smart speaker in Google Home and which already supports some smart-home features.

One advantage for Alexa in the smart-home space is that Amazon sells its own smart appliances and other smart-home products. It offers smart clocks, for instance, as well as smart microwaves. The company’s latest announcement included minor upgrades to some home goods and one big reveal: the Alexa smart oven. It’s Amazon’s newest, biggest, and priciest ($249.99) smart-home device yet, though it’s still a microwave-like countertop device rather than the sort of thing homeowners once bought at Sears.

Amazon seems to have a keen eye for where smart devices will be most useful: using a smart clock to set a timer or instructing a digital assistant to heat the oven for you both have a common-sense convenience that is lacking in, for instance, smart refrigerators that users can tweet from.

The post What We Learned From Amazon’s Big Hardware Announcements appeared first on The Motley Fool Canada.

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But that hasn’t stopped Disney (NYSE: DIS)-controlled Hulu from pushing its own multichannel streaming option, Hulu + Live TV. And impressive recent growth statistics raise the question: Can Disney make skinny bundles work?

Skinny bundle troubles

Streaming video in general has done well in the cord-cutting era, but live-streaming television services are still posting relatively meager gains in subscribers. Technical problems are partly to blame. While streaming video apps preload portions of videos as an insurance policy against inconsistent internet speeds — a practice called “buffering” — live feeds can only be buffered to the extent that services are willing to air them on a delay, because, of course, you can’t buffer a video that hasn’t been broadcast yet. There are also messy financial issues. A streaming multichannel service that wants to replicate the cable experience has to carry a bunch of individual channels while keeping the price low enough to undercut cable, and that can be difficult to do.

These factors and others have led to skinny bundles that struggle to draw even a fraction of the subscriber bases that their on-demand cousins have been able to build. Sling TV, owned by satellite TV company DISH, was the first of these “skinny bundle” services and has so far held onto the top spot in subscriber count. But Sling TV still only has 2.47 million subscribers, which doesn’t hold a candle to the on-demand giants. Netflix, for example, has 60 million paying subscribers in just the U.S.

Here comes Disney

Sling TV isn’t alone at the top anymore, however. Hulu + Live TV, which was launched in 2017 as “Hulu with Live TV,” has reportedly been growing fast, and — according to at least one recent estimate — now sports a total of 2.4 million live TV subscribers, putting it in a virtual tie with industry leader Sling TV.

Hulu + Live TV isn’t the only fast-growing competitor: There’s also Alphabet‘s YouTube TV, which has grown to boast 1.5 million subscribers. Nor is it the first service to challenge Sling TV for streaming TV supremacy; that was AT&T‘s DIRECTV NOW, which many observers once expected to eclipse Sling TV by the end of 2018. But DIRECTV NOW’s growth turned out to be a mirage, and by the end of 2018, the service was hemorrhaging subscribers. AT&T blamed the end of a marketing push and the expiration of promotional subscriptions, then posted two more subscriber losses in the next two quarters, and then rebranded the service as AT&T TV NOW.

So what makes Hulu + Live TV special? There are no guarantees, but there are some reasons to hope that Disney can do what others could not.

Hulu + Live TV’s advantages

Hulu + Live TV has a few key advantages, and they start with the parent company. (Disney owns the majority of Hulu and minority owner Comcast has given it operational control of its stake, which it plans to sell to Disney in the future.) Hulu is backed by a relatively deep-pocketed company, and not one that is hoping to offset existing and ongoing subscriber losses (as is the case with DISH and AT&T, both of which operate legacy pay-TV services). Hulu + Live TV doesn’t have quite the tech-industry trust fund in the family that competitor YouTube TV does, but it’s comfortable.

And Disney has other streaming holdings. Hulu + Live TV is, of course, under the same brand as Hulu and is part of a larger Disney streaming ecosystem that includes ESPN+ and will soon include Disney+. Disney’s services have powerful bundling potential, and while Hulu + Live TV was left out of Disney’s recent bundling announcement (Disney will offer Disney+, ESPN+, and Hulu for $12.99 a month), it could still appear in future bundles.

Besides, it already is a bundle of sorts. Hulu + Live TV’s price of $44.99 per month is very typical of this space, but Hulu + Live TV includes a subscription to the regular on-demand Hulu service. While there are other skinny bundles with on-demand content — some services offer “live TV rewind” features and create de facto on-demand content from the last 24 or 48 hours of programming from the channels they carry, while others have separate on-demand libraries — none rival Hulu’s reputation in on-demand streaming, nor can any match Hulu’s original series and exclusives.

Hulu has to cut deals with the owners of the networks to carry their channels live on its app. In several cases, that means talking to a big company with lots of channels. And Disney, as it happens, is one of those companies. Disney owns ABC, Freeform, and Disney Channel, among other properties. And most important of all, Disney owns the popular and expensive ESPN. Content from ESPN can end up on ESPN+, which can be bundled with Hulu’s on-demand side and is ripe for additional bundling options with Hulu’s live TV arm.

Time will tell

All of this may or may not be a reason to believe in Disney’s skinny bundle at a time when skinny bundles as a concept may be destined for failure. But Disney’s live TV streaming service is better positioned than its peers to make a run at success in this dangerous business space. Maybe Disney will make skinny bundles work; if any company can, it can.

The post Can Disney Make Skinny Bundles Work? appeared first on The Motley Fool Canada.

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As soon as news broke that Walt Disney (NYSE: DIS) was acquiring the bulk of Twenty-First Century Fox’s assets in a blockbuster deal, it was obvious: Disney was out to change streaming. Since then, Disney has made all of the right moves to challenge Netflix (NASDAQ: NFLX) for streaming supremacy. It has taken control of Hulu (originally a joint venture with several major media partners), rolled out sports streaming service ESPN+ (growing its subscriber base quickly), and announced a new streaming service, Disney+. Both the streaming ecosystem and the impressive bundled deal seem poised for success.

But this isn’t a coronation. Disney is on track to take on some serious competitors, and in the end, it has the opportunity to emerge as the big kid on the streaming block. But there’s still plenty to do before it can declare victory — here are some of the challenges the company still has to tackle.

Avoiding problems on Disney+ launch day

Disney+ is getting a lot of good press right now, and rightly so: It’s sporting some enviable media properties and is ready to come into the market at a price that undercuts many competitors, especially Netflix. But it’s important to remember that the service hasn’t actually launched yet. We don’t know how it will be organized, what content-discovery features it will have, or — crucially — whether it will have a smooth launch. Bad launches can hinder streaming services, and embarrassing server issues on launch day would really hurt Disney’s momentum.

Is this a challenge the company is up to? Disney exec Michael Paull says yes. He told The Verge that his team was “thinking very much” about overload issues and coming up with ways to keep servers up in the face of launch-day traffic. But Disney has had issues doing so on ESPN+, albeit with live-streamed events, which can be trickier than on-demand content due to limited buffering abilities (you can’t buffer video that hasn’t happened yet). The Disney+ launch-day crowd is virtually certain to be larger than the crowds that swamped ESPN+ during UFC matches — the sports offering has a relatively modest two million or so subscribers.

Avoiding problems in high-traffic moments

Disney+ launch day will see the streaming service welcoming large numbers of users for the first time. But the hordes are likely to grow even larger with the debut of popular new programming. The good news for Disney is that, after launch day, subscribers can stream whenever they desire. There will be surges in viewer traffic, like weekday evenings and weekend afternoons, but will users ever again rush to log on and stream all at once?

Actually, they probably will. That’s because Disney+ is opting for an HBO-style weekly release schedule for its original series, rather than a Netflix-style season dump. Rather than binge-watching at their leisure, subscribers will presumably behave more like Game of Thrones viewers and try to watch their favorites “live.”

That can cause problems, and nobody knows it more than Paull: He was CEO of BAMTech, which ran HBO NOW’s streaming when Game of Thrones fans crashed the service during a popular 2017 episode. The popularity of Game of Thrones has caused some smaller issues since then, and fans could certainly give Paull’s streaming team some headaches if the Disney+ originals are the hits management hopes they are.

Making multichannel live TV work

Disney+ isn’t the company’s only source of streaming challenges. There’s also Hulu + Live TV, the multichannel live-streaming arm of Hulu. While its estimated 2.4 million subscribers are impressive for a live TV streaming service, that figure is nothing compared to the subscription video-on-demand giants.

Can the company make Hulu + Live TV work? Having a unified streaming ecosystem may help, but this service was conspicuously absent from Disney’s big bundle-deal reveal. Judging by the rest of the live TV streaming space, Hulu + Live TV is probably losing money.

Management can try to leverage its other streaming holdings to boost the service’s fortunes, but this is perhaps Disney’s greatest streaming challenge. And while multichannel live TV services are relatively well-positioned, they haven’t been the best investments in the past.

Bringing Spider-Man back

Disney’s breakup with Sony over Spider-Man was poorly timed. Spidey, arguably the most iconic creation of Marvel Comics, had just been featured in Marvel Studios’ box-office smash Avengers: Endgame, and the Marvel Cinematic Universe has been a big part of the plan for Disney+. But now Spider-Man has once again left the Marvel Studios fold, and he doesn’t seem likely to come back anytime soon.

That’s bad news, but it gets worse: Without a deal with Sony, Disney doesn’t actually have the streaming rights to the two Spider-Man solo flicks made during the web-slinger’s time in the Marvel Studios family. Spider-Man: Homecoming and Spider-Man: Far From Home were both big hits, and both will be absent from the opening-day lineup on Disney+ unless the two companies work something out. Can Disney bring Homecoming and Far From Home home? The smart money is on “yes,” but that’s not to say it will be easy — or cheap.

Disney’s time to shine

This is not to rain on Disney’s parade, nor is it to say that investors should be bearish on the company’s prospects. It’s merely to remind us that even superstars need to deliver on game day. Disney+ may well have a smooth launch, and the company may well have Spider-Man back in the fold by then. Hopes of rapidly expanding the company’s streaming enterprise and poaching Netflix subscribers is still no easy task.

The post 4 Streaming Challenges Still Ahead of Disney appeared first on The Motley Fool Canada.

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Since its latest price hikes went into effect earlier this year, Netflix (NASDAQ: NFLX) has been charging subscribers $12.99 per month for access to its most popular plan. That may not seem like an outrageous rate given the fact that Netflix is the dominant service on the streaming market, and some competitors, including AT&T‘s HBO Now, are in the same ballpark. Yet all of a sudden, Netflix’s current price is looking a bit too high.

That’s thanks in part to the new competition offered by Walt Disney‘s (NYSE: DIS) Disney+. The entertainment giant’s new streaming service will cost just $6.99 per month when it debuts in November, and Disney will also offer Disney+, Hulu, and ESPN+ in a bundle for $12.99 per month. Combined with a rough quarter for growth following the Netflix price increase, this new competition suggests that Netflix has a pricing problem. And now it’s getting worse, because Apple (NASDAQ: AAPL) is looking to undercut Netflix, too.

Apple’s pricing play

Apple, like Disney, has been working on a new streaming video subscription service that seems designed to challenge Netflix in the subscription video on demand (SVOD) space. Apple is building its service on its TV app, a streaming platform that offers free content and also acts as a hub that gives users access to premium content from subscription services like HBO. Apple’s TV app is already up and running, but it will soon add a new source of premium content that comes straight from Apple itself: Apple TV+.

Apple announced this month that Apple TV+ will cost $9.99 per month. That’s not quite as cheap as Disney+, but it’s still cheaper than Netflix’s most popular plan (Netflix does offer an $8.99 per month plan that limits viewers to standard-definition streaming on a single screen, but it’s not as popular as the $12.99-per-month Standard plan, which includes HD streaming on two screens).

It’s more trouble for Netflix, which is now facing two new major competitors at lower price points — in addition to Hulu, which has long been cheaper than Netflix.

Betting on a fractured market

It was one thing when a pricier Netflix faced down a cheaper Hulu in a relatively sparse streaming market. Netflix has been the king of streaming for more than a decade, and its huge library of strong content has long made it the prohibitive choice for consumers.

But that won’t be true for much longer. Even if Netflix pours more money into its original series and manages to keep its content library from shrinking, it still won’t have the monopolistic position that it once did. While Apple is relying on huge investments in original content to build its new service despite a background in tech rather than video content, other companies are simply taking their own media properties home, and in many cases, away from Netflix. Netflix has lost Marvel Studios content from Disney and will soon lose popular sitcoms from Comcast‘s NBCUniversal — including The Office, which is Netflix’s single most popular show.

The streaming market is becoming increasingly fractured. That’s likely to lead to much more subscription churn as more users hop from service to service to catch up on favorites. It’s also likely to give an advantage to cheaper services that position themselves as a part rather than the whole of a user’s streaming media solution.

Hip to the hub

Apple knows that the market is getting fragmented — in fact, the company is among those betting on it. Again, Apple’s TV app allows users to subscribe to other services and view all of their content (along with free ad-supported content) within one app. Netflix users can’t do that. And hubs like Apple’s — as well as Amazon Channels and platform-style hubs like Roku — will be able to take a cut of each subscription that their users add.

Netflix has a pricing issue, and it’s not just competing against individual services. It’s competing against bundles and all of the different a la carte setups that consumers can create on competing platforms. The streaming market seems poised to shatter into a world of cheaper and more numerous subscriptions — and everyone seems ready for it except Netflix.

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