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Netflix Spending Big on Original Content

“Netflix plans to spend an estimated 17.3 billion this year with a large portion of those funds earmarked for original content.”

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Netflix CEO and Co-Founder Reed Hastings doesn’t care whether you are watching reruns of an old favorite too many times to count or experiencing a Netflix Original for the first time. He knows people are subscribing to the streaming service in record numbers. Netflix recently announced 26 million new subscribers in the first half of 2020, giving the company approximately 193 million subscribers in total.

“Consumers don’t really care how we do it,” Reed said in an interview with Yahoo! Finance. “What they care (about) is that we have some of the best series and the best films that anyone’s ever produced. We care really about what are the options that we have for consumers, rather than how and who produces it.”

Hastings and Netflix have put their money where their mouth is, shelling out 15 billion dollars on content in 2019, putting the company on par with other industry leaders Viacom/CBS and just behind Comcast at 15.4 billion. Disney leads the way, spending 27.8 billion dollars on content.

Netflix plans to reach deeper in their pockets this year as they will spend an estimated 17.3 billion with a large portion of those funds earmarked for original content, according to BMO Capital Markets analyst Dan Salmon.

Some of the most anticipated original programming will feature Prince Harry, Duke of Sussex, and his wife, American actress Meghan Markle, after the couple recently cut ties with the Royal Family. Other original shows that have created industry buzz are Enola Holmesstaring Mille Bobbie Brown (who rose to stardom in the Netflix Original Stanger Things) and Challenger: Final Flight, a documentary which examines the events surrounding the explosion of the Space Shuttle Challenger.

Some other original programming such as Cuties has been widely met with criticism due to perceived sexualization of children. It has caused the hashtag #CancelNetflix to trend on Twitter in recent days.  But Hastings doesn’t seem to mind the controversy or the fact that he is being out-spent by other companies.

“They’re doing a lot of things that are interesting, but we’re focused on being a great entertainment company,” Hastings said. “We’re never going to be all of entertainment. Other people are going to do other shows.”

Story written by BNM contributor Jacob Conley. Follow him on Twitter @GWUJake.

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Media Business

AM/FM Radio Still Dominates Rural Areas, New Edison Report Shows

In rural areas, 43% of time spent with audio was with AM/FM radio, compared to 36% for suburban and 34% for urban dwellers.

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Podcasting has seen expansive growth in recent years. However, AM/FM radio remains the biggest audio medium in rural areas, according to a new study from Edison Research.

In numbers released in the company’s latest Share of Ear data shows that citizens in urban settings listened to podcasts at double the rate of those in rural areas. 13% of an Urban dweller’s daily audio time is spent listening to podcasts, compared to just 6% for those in rural areas. Suburban listeners spent 11% of their time with podcasts.

In rural areas, 43% of time spent with audio was with AM/FM radio, compared to 36% for suburban and 34% for urban dwellers.

Despite the fluctuations in mediums, both rural and urban listeners spent nearly identical percentages of their daily audio between the two mediums. Those in Urban areas spent 47% of their time with AM/FM radio and podcasting. Meanwhile, 49% of daily audio time for Rural listeners was spent between the two formats.

“You’ll see that in combination these numbers are essentially the same – between 47% and 49%. It appears that the ‘time budget’ for radio and podcasting combined is consistent across locations – it is just the apportionment of that time that varies,” Edison Research shared in a blog post discussing the findings.  

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Scripps Names Kate O’Brian President of News as Sean McLaughlin Departs

“Kate O’Brian is a skilled executive and journalist who embodies our responsibility to serve American audiences nationally and locally.”

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Sean McLaughlin, Senior Vice President of Local at the E.W. Scripps Co., has announced his departure. The company has subsequently named Kate O’Brian as its new President of News.

Previously, O’Brian had been in charge of national news outlets, Scripps News, and Court TV for the company since joining in 2021.

“Kate O’Brian is a skilled executive and journalist who embodies our responsibility to serve American audiences nationally and locally. This new structure puts oversight for the entire company’s news and editorial strategy under her leadership,” Scripps CEO Adam Symson said in a statement to Broadcasting+Cable

“Scripps will maintain locally run, locally focused newsrooms serving each of our local markets, and at the same time we will coordinate our local and national reporting for the benefit of all our audiences, including for Scripps News’ network,” Symson said.

Symson added that the company will seek a new SVP of Local News, with that new hire reporting directly to O’Brian.

In a post to social media announcing his exit, McLaughlin called his time at the company a rewarding one.

“Leading the local news division at Scripps since 2014 has been one of the most rewarding experiences of my career. Working with some of the most talented people in the industry, united behind a mission to elevate the quality of local journalism, modernize the approach and serve our communities even better,” wrote McLaughlin.

“As I move to the next chapter in my journey, I thank everyone who I have had the honor of working with at this crucial time in our industry. I thank Scripps for allowing me to help lead the mission. For all the journalists and editorial leaders: Keep fighting the fight. What we do is more important than ever. A heart-felt thanks to everyone who has reached out today. Your words have been kind and more meaningful than I can express.”

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Media Business

iHeartMedia Revenue Dropped 4% in 2023, Podcast Revenue Up 14%

“We expect to see a significant year-over-year improvement in our 2024 financial performance, supported by our ongoing efficiency efforts and what is anticipated to be a record-setting political advertising year.”

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iHeartMedia has announced its fourth-quarter earnings from 2023, which shows a slight drop in total revenue for the calendar year.

In the fourth quarter, the company saw $1.067 billion in revenue, down 5.2% year-over-year.

For the entire year, iHeartMedia saw revenue of $3.751 billion, which was down 4% overall. That drop was slightly better than the guidance range that predicted drops of high single digits, though.

In the political sector, the company was off by a 2% drop. However, digital audio revenue rose 5%, with podcast revenue rising 14% year-over-year.

“We’re pleased to report that our fourth quarter results were in line with our previously provided Adjusted EBITDA and Revenue guidance ranges,” said Bob Pittman, iHeartMedia’s Chairman and CEO, in a statement.

“This quarter the Digital Audio Group achieved the highest Adjusted EBITDA and margin in its history, illustrating the success of this high-growth business. We view 2024 as a recovery year in which the company returns to growth mode — we expect to see our Multiplatform Group performance improve quarter by quarter throughout the year, and we expect our Digital Audio Group, including our industry-leading podcast business, to continue to grow and reinforce its leadership position in the segment.”

“We continue to see signs of improvement throughout our business and the broader advertising marketplace. Our results this quarter are a strong indication that the reallocation of resources towards our high-growth Digital Audio Group has been successful – through our relentless focus on efficiencies we have reduced our Multiplatform Group expenses by approximately 7% since 2019, which has in part enabled us to build a Digital business that generated $1 billion of revenue in 2023 with an Adjusted EBITDA margin of 33%,” added Rich Bressler, iHeartMedia’s President, COO and CFO.

“We expect to see a significant year-over-year improvement in our 2024 financial performance, supported by our ongoing efficiency efforts and what is anticipated to be a record-setting political advertising year.”

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