Time Warner will spend $100M on Snapchat original shows and ads

https://techcrunch.com/2017/06/19/time-warner-will-spend-100m-on-snapchat-original-shows-and-ads

by janober • 9 years ago

88 82 9 years ago

techcrunch.com

Animats• 9 years ago

Vertical video by the pros.

I wonder if large portrait displays will become available again.

dawnerd• 9 years ago

I wonder if large portrait displays will become available again.

Turn display sideways?

petecox2• 9 years ago

Ha :)

I guess I'm one of the few hoping fixed orientation landscape laptops recede as tablets gain traction.

A portable tripod mount that flips to portrait would be far more convenient for A4 documents than a form factor that hasn't changed since the 90s.

dragonwriter• 9 years ago

I wonder if large portrait displays will become available again.

Monitor stands for LCD panels that support rotation (and video drivers that do the same) have never stopped being available.

eecc• 9 years ago

Crystal polarization always makes the viewing in portrait quite odd

virmundi• 9 years ago

True. The angle of refraction tends to be pretty awful on rotated screens. I've got a benq that appears shadowed when I rotate it long ways.

moolcool2• 9 years ago

More likely: This will flop and won't be on any displays

komali24• 9 years ago

Well, that's it then. Either I'm officially out of touch, or Time Warner is $100M out of touch. Occam's Razor.

Is this what getting old feels like?

wjnc• 9 years ago

I'm with you: 3 shows a day * 5 minutes * 365 days a year * 2 years < 200 hrs of content for $100M

Now express that budget as something relating to advertising budget and profits. Those 200 hrs should steer tens of billions in sales.

draaglom• 9 years ago

Prime-time TV adverts apparently cost about $75k[1]; $45k for a 5-minute show doesn't seem so unreasonable in that context.

[1] http://www.nielsen.com/us/en/insights/news/2014/advertising-...

joefkelley• 9 years ago

This is hilariously close to an actual scene from The Simpsons: https://frinkiac.com/meme/S05E20/289238.jpg?b64lines=IEFNIEk...

tootie• 9 years ago

I used to be with it, then they changed what it was. Now what I'm with, isn't it and what's it seems weird and scary. It'll happen to youuuuu.

alaskamiller• 9 years ago

$100 million for two dozen bets (plus management fees) to catch 300MM MAU that yields $100k ad slot inventories. 2000 placement a year to break even. 4000 to double ROI.

TWC has skin in the game to explore a new channel. Snap has skin the game to make sure their top notch sales team can close those deals. And a couple hundred kiddie social influencers are gonna get stupid money to play with instead of being on Youtube or Instagram.

Being old is thinking it's just another form of the horse tracks.

joshjkim• 9 years ago

"TWC has skin in the game to explore a new channel." <-- IMO, piece that holds it all together. all media cos have a huge interest in finding and maintaining channels-that-are-not-Facebook - newspapers/magazines/print already nearly live/die by FB's feed (mostly the latter...and the living are now trying to figure out ways to diversify, i truly wish them luck!), and TWC needs to figure out a way to avoid that same dependence as video continues to move more and more online. snapchat is not facebook, and that is worth TWC trying to make work!

fred_is_fred• 9 years ago

Time Warner is not TWC. TWC no longer exists.

kirykl• 9 years ago

Snap is just another channel.

sjg007• 9 years ago

This comment is underrated. It's the next generation of media distribution.

CobrastanJorji• 9 years ago

I would say that the company that merged with AOL in 2000 is probably the out of touch one.

That said, I always thought that their "subscribe to all of the really old video games" service, GameTap, was a fantastic idea that really shouldn't have crashed and burned like it did.

munchbunny• 9 years ago

I don't think you're necessarily out of touch, but you might be looking at it with the wrong lens.

Time Warner is a media company. Their business is creating and monetizing media, either by selling it or by selling advertising for it. Traditionally they did most of it by TV and cable. With the advent of the internet and sites like Hulu and Youtube, Time Warner is also moving online. But that's if you're trying to focus on selling the content.

If you're trying to sell the advertising around the content, then you've got a problem. Traditionally you make all of that money on highly valuable ad placements between segments of your TV shows right? Sports broadcasts, for example, are premium advertising inventory, but in the last few years things have been hurting badly because of increasing numbers of cord cutters. They all went to Snapchat, Facebook, Netflix, Google (Youtube), so all of these tech giants are trying to eat traditional media's lunch. It's a blatantly obvious move with the sports broadcasting agreements that Twitter, Facebook, Amazon, etc. have been signing.

This is Time Warner going "well if you can't beat 'em, join 'em." Better to embrace all formats that would let you reach (and monetize) audiences than to get left in the dust. Snapchat has somewhere around 150 million active-ish users, and your average TV show (not the blockbusters) probably sees somewhere around 5-10 million viewers? So the numbers actually work out in terms of just reach. I'm not so sure about monetization.

champagnepapi• 9 years ago

I'm 24, I think Time Warner is out of touch. Or maybe I'm old too

wiineeth• 9 years ago

waits for instagram to do the same thing

6stringmerc• 9 years ago

Potential follow-up article: Snapchat stock continues to plunge as teens, annoyed by Time Warner ads, leave in droves.

satsuma3• 9 years ago

It's entirely possible. Teens stop enjoying things their parents are on.

Raphmedia3• 9 years ago

Very possible. Now when you view one your friend's story it ends with an ads.

I don't want to view a publicity for some products right after I see a video of my friends.

It was all fine when they added optional publicity feeds/story you could click on. Since it's forced, I can't see it lasting.

chipperyman573• 9 years ago

In snaps defence, they make it very clear that it's sponsored and you can skip it (immediately) the same way you skip any other story (sponsored or otherwise). It's really not a huge deal in my opinion.

SimbaOnSteroids2• 9 years ago

On the other hand Phillip DeFranco mentioned about a month ago that he had recieved an offer from a "big media company" to produce content for them.

It seems very plausible that Time Warner was this big media company. It then follows that if DeFranco is the type of content creator they are looking to to bring on then this new initiative with Snap Inc and Time Warner could prove very successful in bringing in young people to their platform.

Stanleyc23• 9 years ago

weird idea, don't know how it'd work - what if the original TV content they made is itself rolled into the Ad model. this way the shows would lie in-between your friends content like an Ad placement (in addition to its own dedicated area in the app). existing snap ads already require high production value to grab users attention so in a sense the ads are already a very small show in some sense.

htormey2• 9 years ago

"Snap will take 50% of the ad revenue generated by these shows and the content partners will keep the other half"

Pretty interesting. Anyone know how this split compares to what FB is offering its partners to make original video content?

philfrasty2• 9 years ago

Think FB pays fixed sums for live content [1]. E.g. Buzzfeed 3.1 million $. Not sure about other (ad) revenue shares though.

YouTube is 55 (you) 45 (tube) [2].

[1] https://www.wsj.com/articles/facebook-signs-deals-with-media... [2] http://www.investopedia.com/articles/personal-finance/032615...

htormey2• 9 years ago

Awesome Thanks!

moolcool2• 9 years ago

What an incredible waste of money

omarchowdhury2• 9 years ago

Why? Just because the shows are delivered through Snapchat?

hodder• 9 years ago

imo yes that is why.

smpetrey• 9 years ago

Yes. I think that is exactly what moolcool is saying. And he's right. Instagram's (typical users) daily active users just surpassed 700 Million. And the Stories daily active users just surpassed 375 Million [1]. Now Facebook has a juggernaut of ad targeting for very specific audiences.

Now if you TW, where would you rather spend your $100 Million on original content and shows? A fully-sustained cruise liner ($FB) or a rapidly sinking dingy ($SNAP)?

Sidenote: if any shareholders since the IPO are reading this, sell now. Not only are your shares non-voteable [2], but they are as ephemeral as Snap's users. Get out while you can.

[1] https://techcrunch.com/2017/04/26/instagram-700-million-user...

[2] https://www.recode.net/2017/2/21/14670314/snap-ipo-stock-vot...

celim307• 9 years ago

I mean, i could see this being attractive to me if they have daily stories of behind the scenes. Basically just short clips of actors goofing off or sets/props being made and tested.

olivermarks3• 9 years ago

Bet it's fake - saying you are going to spend $100m ad actually doing it are two v different things. Snapchat has already had all its features ripped off by the Faceberg empire and has a fraction of their eyeballs...

accountyaccount3• 9 years ago

Snapchat has a certain demo cornered though. Kids aren't using Facebook like their parents are; it's a brand thing more than a feature thing.

olivermarks3• 9 years ago

...for now there is a small number of of 'kids' using snapchat, but I suspect it will never hit critical mass and will be a fad platform. I know a lot of middle aged marketing types constantly using Snapchat, seeing if it make them money (even if it's just speeches about it to other marketers..)

gpawl• 9 years ago

Snapchat has some useful popular features, but does it have a wide enough functionality it be where anyone "lives" online?

anigbrowl• 9 years ago

I dunno about that, I have a lot of friends who use Snapchat for the filters and low-friction 'waves' at friends but still use FB for more conversational purposes

zitterbewegung• 9 years ago

So on the front page [1] it looks like there is a extremely similar deal with CNN and Facebook. And CNN isn't that keen on playing ball with Facebook. The revenue sharing seems to be because the fact that Snap isn't playing from a dominant position. What makes this different revenue sharing? [1] https://www.bloomberg.com/news/articles/2017-06-19/media-com...

mattacular2• 9 years ago

Might be related to this deal as CNN is owned by Time Warner (via Turner)

warcher3• 9 years ago

Hm.

Feels like a whole lot of companies are jumping on the Netflix bandwagon with original content.

And here's the thing that concerns me: Netflix, on a tech level, is pretty much a solved problem. There's stuff left to be done for sure, rust never sleeps, but they're pretty much good to go tech-wise. The content side of their business is an existential struggle, and getting original content right is IMHO a do-or-die proposition for them. They did a pretty damned good job because they have to.

All these other guys, they see Netflix doing a really good job on original content, and they want to duplicate the success. Which is understandable, but can they devote the focus at the top level that is necessary to do the job? Or are they going to half-ass it with the expectation that running a content studio is something any idiot liberal arts major can do?

Snapchat, for me, isn't in the TV game and shouldn't be. Nor Apple. And the results of their experiments are about what I'd expect out of a couple of big companies messing around with original content.

igk2• 9 years ago

..., rust never sleeps,...

I am not familiar with this phrase, what does it refer to? Or are you referring to my current favorite programming language and the need for it to go mainstream? ;-)

You can also have another perspective on this: with the lack of investments in moonshots and every less actual work to do, we are now entering the "entertainment industry" phase of our society.

You could argue that Netflix creates the on-demand-video equivalent of long form writing, youtube spans from that to shlock novels and comic books...so with vine gone (it's still gone right?), maybe snapchat or instagram will fill the video equivalent of tabloids spanning to facebook posts.

komali24• 9 years ago

cough hello rust evangelism strike force cough

Rust never sleeps: the idea that nothing is ever "not needing maintenance." In webdev, this means that even if Netflix is "perfect," it may not remain so if, for example, the Chrome, Firefox, and Microsoft teams all find critical exploits in their browser code that forces a push to up to date and legacy versions of their browsers that breaks the netflix video viewer, or whatever.

No matter how well you paint a bridge, the rust will find a way in.

Jach• 9 years ago

The phrase is old and refers to needing constant maintenance on anything (because rust and decay never stop), but it was probably most popularized by the Rust Never Sleeps album. Its closing/opening tracks: https://en.wikipedia.org/wiki/Hey_Hey,_My_My_(Into_the_Black...

warcher3• 9 years ago

haha, literal rust. Everything is decaying, all the time. Entropy never sleeps, to paraphrase.

mpg33• 9 years ago

Same thing when Microsoft launched Xbox One in 2013. They talked about TV content that they would be investing in. I was just thinking...why are you getting involved in making TV shows?..you and Sony effectively have a duopoly on the console AAA games market...it's a gaming machine, if anything you should be investing in gaming content.

satsuma3• 9 years ago

And it bit them in the ass when Sony pushed games, games, and more games onto the PS4 and have enjoyed being on the winning side of a healthy install base gap ever since.

onion2k• 9 years ago

Microsoft have a huge amount of data about exactly what Xbox users do. You might think it's all about gaming but they know that's not the case.

biztos• 9 years ago

The story from Netflix seems to be that there is still enormous room to expand in the content side and in fact their business model is to make even more room, by having more niche programming as well as the binge-watching thing.

Also it was interesting to hear Reed Hastings basically say that as a tech company Netflix might not have too long an independent life but if you look at it as a rival to Disney it could be a hugely successful independent company basically forever -- and that he himself likes that idea. IIRC that was in an A16Z interview but I'm not sure.

Anecdotally: I don't watch "regular TV" but I do subscribe to Netflix, and I buy a lot of shows on my Apple TV (quality and reliability beat cost, for me). I recently subscribed to ShowTime just to watch the new Twin Peaks; maybe I'll stay after that, maybe not. I've thought about ditching my Netflix account because where I am it's sloooow, but every so often they have some awesome original content I can't find elsewhere, and I stay.

I'm sure I overspend, but I probably spend $100/mo on "stuff on TV." I'm sure a lot of other people do too. And my commitment to spending it on one thing versus another is really minimal.

I don't know if Snapchat will be good at the TV game, but I do know that just like Valley companies tend to "get" software more than LA companies do, the opposite is true of entertainment; and Snapchat has shown they have at least some clue what "the kids" want, which is a pretty huge deal.

If I were a media exec I would definitely want some kind of deal with Snapchat, if only to hedge my bets against the (to me, as a grownup) unknown.

warcher3• 9 years ago

What would somebody from NBC be looking to get out of Snapchat? I admit fully that I'm too old for Snapchat-- I don't want my stuff to disappear, I don't do anything embarrassing and I forget enough crap already. Is it just eyeballs? Why does Snapchat want to host a TV show? Is it going to disappear? I grew up with the whole "must see TV" thing, where if you weren't in front of the TV when Seinfeld came on, then you weren't gonna see it. It fucking sucked, to be blunt. Who would want to go back to that? And if Snapchat is just putting tv shows into the app because disappearing snap whatevers aren't enough to drive whatever number they need to drive, what competitive advantage are they going to use to go after the many, many, many content players already in the mix?

The whole thing just leaves me scratching my head.

IanCal• 9 years ago

Tech wise I don't know. I used to think so but on my main device (shield TV) I cannot reliably watch it any more. They have been largely unhelpful in getting it working and seem to refuse to roll back the software to a working version. The latest shield update even removes my previous ability to pin the working version.

They no longer, to me, have a working streaming service.

SimbaOnSteroids2• 9 years ago

If they're poaching top tier YouTube talent then they might not have to worry about getting the content right because the market has more or less already selected for them.

DeFranco mentioned that a top media company had made him an offer about a month ago.

Aron• 9 years ago

Astonishingly for a solved problem, Netflix still spends over 800M$ a year on research and development. I tend to scratch my head that they possibly get a good ROI on that. I think HBO's entire content budget is ~2B$ for comparison.

serg_chernata• 9 years ago

Honest question, is this $100M deal even that big for the parties at hand?

Will they spend all of this money on making ads or is this the sum that Snap will actually receive as payment?

roymurdock• 9 years ago

Snapchat made $150m in revenue last quarter, assuming a straight 4x multiplication that's $600m in yearly revenue.

Adding $50m in revenue (nearly 10%) per year over the next 2 years is pretty substantial and you can bet the account director in charge of the TWC account is having a good day.

sschueller• 9 years ago

Next week: Netflix buys Time Warner, cancels Snapchat deal.

omarchowdhury2• 9 years ago

Would be quite the interesting merger.

mattacular2• 9 years ago

AT&T beat them to the punch

dmalvarado• 9 years ago

But they're a monopoly. Can't they just take $100M and make my bill smaller?

philfrasty2• 9 years ago

„...This deal comes at the perfect time for Snap...“

Yeah what a coincidence.

jdc0589• 9 years ago

what in the shit is a snapchat show.

komali24• 9 years ago

Somewhere buried in the UI (god knows where, but I've seen other successfully navigate to it) are "stories," like you see for your friends, but from not-your-friends. I assume this is where the Time Warner stuff will go.

Raphmedia3• 9 years ago

You know when you swipe right one time too many and your screen is filled with ads? Click on one. That's a Snapchat show.

sebbean• 9 years ago

lol wtf

dzonga• 9 years ago

Active attempt at screwing future generations' attention span!! 3-5 minute shows, ohh well.

Time Warner will spend $100M on Snapchat original shows and ads

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