The Netflix “first-mover advantage” and its large subscriber base gives it a “nearly insurmountable competitive advantage” over streaming peers, Wedbush analyst Michael Pachter wrote investors Wednesday, upgrading shares to “neutral” from “underperform.” Netflix “appears to have hit a ceiling" on subscribers in the U.S. and Canada “and is pulling new levers to lower churn,” he said, citing a new season of the Russian Doll series in Q2 and the final season of Stranger Things scheduled to straddle Q2 and Q3. Subscription price increases will likely fuel added content production and growth in other regions, Pachter said. Future subscriber growth will occur mostly in less developed regions at much lower subscription prices, while subscribers in saturated markets pay higher rates to fund new content. Wedbush expects Netflix to deliver profit growth as long as it can continue raising subscription prices, “but competition may create a price ceiling.”

Netflix has no plans to introduce an ad-supported tier as Disney+ intends to do this year in the U.S. (see 2203080004), Chief Financial Officer Spencer Neumann told a Morgan Stanley investment conference Tuesday. “It's not like we have religion against advertising,” said Neumann. “We think we have a great model in the subscription business." Netflix will “never say never” to an ad-supported tier, he said. “It's hard for us to kind of ignore that others are doing it, but it now doesn't make sense for us.” Netflix hopes mobile gaming will be "a big part of our business in a decade," but "it's not going to be a big part of our business in the next 12 months," said the CFO. Netflix went from "saying we wanted to get in the games business to launching a games business globally inside of 12 months and having it work on Android and iOS and around the world," he said.

Arkansas' Video Service Act (VSA) doesn't apply to streaming services like Netflix and Hulu, and the U.S. District Court in Texarkana rightly threw out claims by the city of Ashdown that the streamers owe unpaid franchise fees, they told the 8th U.S. Circuit Court of Appeals in docket 21-3435 appellee answering briefs Tuesday. Ashdown is appealing a lower court's dismissal of its suit seeking franchise fees from the streamers (see 2202100004). The streamers said a growing number of courts reached similar conclusions about franchise fee suits brought under statutes they said were similar to the VSA, and made a similar argument Tuesday in federal court in New Jersey as they fight similar franchise fee litigation there. Hulu told the appellate court it doesn't install or build any facilities of its own in public rights of way and thus never sought a state certificate of franchise authority. It said its service predates the Arkansas VSA by five years, but there was no mention of it or other streaming services in the VSA's legislative history, and for years no state authority attempted to apply the law's requirements to it. Hulu said the VSA doesn't authorize a municipality suing a non-franchise holder for franchise fees. Netflix said subscribers access its content library over the public Internet, and therefore it doesn't need a franchise and has no obligation to pay franchise fees under the VSA. In a docket 2:21-cv-15303 filing Tuesday in U.S. District Court in Newark, the streamers cited a February decision by Gwinnett County, Georgia, Superior Court to bolster their argument for tossing out a pending suit by Longport and Irvington, New Jersey. The streamers said the Georgia court said Netflix content doesn't constitute video programming under Georgia law "that is substantially similar ot the New Jersey Cable Television Act." The Gwinnett County decision granted a Hulu, Netflix, Disney and Dish Network motion to dismiss litigation brought by several Georgia localities. Outside counsel for the Arkansas and New Jersey communities didn't comment.

Pay-TV providers controlling 93% of the market lost about 4.7 million net video subscribers last year vs. a pro forma net loss of about 4.9 million in 2020, reported Leichtman Research Group Tuesday. The loss of 2.7 million cable video subscribers in 2021 compared with an exodus of 1.9 million in the prior year, it said. Comcast shed 1.7 million subscribers to end 2021 with 18.2 million; Charter dropped 367,000 to end at 15.8 million, it said. Other traditional pay-TV services lost 2.9 million subs vs. a loss of 3.8 million in 2020. DirecTV lost 1.9 million to end with 14.6 million customers; Dish TV lost 595,000 to 8.2 million, and 282,000 left Verizon Fios, bringing its subscriber count to 3.6 million. Top vMVPDs added 895,000 subs last year vs. a gain of 915,000 in 2020, led by fuboTV, which added 581,000 subscribers to end the year with 1.1 million. Hulu+ Live TV remains the leading vMVPD, adding 300,000 subs for a total 4.3 million; Sling TV added 12,000 accounts for a total 2.5 million. The top seven cable companies have 41.3 million video subscribers; other traditional pay-TV services have 26.8 million and the top publicly reported vMVPD services have 7.9 million, it said.

Verizon announced +play Thursday, a streaming platform that allows users to centralize subscriptions across audio, gaming, fitness, music and video services at no additional cost to its customers. It has partnerships with Netflix, Peloton, Live Nation’s Veeps and offers Disney+, discovery+, A+E Networks, AMC+ and others, giving Verizon customers a “simple and efficient way to access and take advantage of exclusive deals for content services,” said the company. Trials for +play will begin at the end of March with a select group of customers and brands, with an expected consumer launch later this year, it said. It builds on content subscriptions already offered by Verizon and will add to its Mix & Match offering “by scaling choice through aggregation,” including choice of connectivity and device, said Verizon Consumer Group CEO Manon Brouillette.

Spotify closed its office in Russia “indefinitely,” saying Wednesday it’s “deeply shocked and saddened by the unprovoked attack on Ukraine.” Spotify’s team reviewed “thousands of pieces of content since the start of the war," the company said, and has restricted discoverability of shows owned and operated by Russian state-affiliated media. It also removed all RT and Sputnik content from Spotify in the EU and other markets and launched a guide (login required) to provide users with “trusted news” on Ukraine from digital sources including BBC World Service, the New York Times and the Wall Street Journal. It plans to keep its service operational in Russia “to allow for the global flow of information.” The streaming music service is providing individual support to its people in the region and its Ukrainian employees globally, it said.

WWE terminated its partnership with the Russian federal sports channel Match TV and shut down Russian access to the WWE Network subscription-based streaming service, effective immediately, announced the media company Thursday, without specifically mentioning Russia’s Ukraine invasion. The action “eliminates access in Russia” to all WWE programming, including all “premium live” events, it said. The company didn’t respond to questions about the financial implications of its decision.

FuboTV joined with analytics firm Kantar to help advertisers running campaigns on fuboTV understand the effectiveness of connected TV ad campaigns and benchmark performance against competitors, the companies said Tuesday. CTV campaigns across fuboTV’s inventory can be activated directly or through fuboTV’s programmatic partners and evaluated using Kantar’s Brand Lift Insights. Insights are said to show the impact of CTV campaigns on brand awareness and favorability, consideration and purchase preference.

Xperi subsidiary TiVo announced Monday an end-to-end advertising offering built on its first-party deterministic TV viewership data. TiVo Xtend is said to bridge the gap between linear and streaming, allowing advertisers to understand how audiences are engaging with their TV campaigns. The integration of TiVo’s behavioral data will improve effectiveness of audience creation and targeted CTV placement, said Walt Horstman, TiVo senior vice president-monetization. Features include first-party viewership data to identify “who has or has not tuned into programming or seen a message from a brand or its competitor(s)"; custom or pre-built programmatic audience segments, scaled and tested for precise digital targeting on CTV, PC, tablet and mobile; premium CTV inventory layered with Xtend or custom audiences to add reach and frequency to linear across 40 million households; and dynamic, clickable ads placed within native TiVo guides to promote content to relevant audiences, it said.

Every major change to expand audience measurement, including adding cable to broadcast in the 1990s and adding delayed DVR viewing in 2006, “has been met with resistance and headlines,” said Nielsen CEO David Kenny on a Q4 earnings call Monday. The current move to “reconcile” streaming and linear TV “is perhaps the biggest change in the history of media,” he said. “Friction can be expected, and we are seeing it.” Nielsen data showed streaming reached an all-time high in January, at 38% of viewing within the 18 to 54 age demographic, he said. Kenny admits “there is more noise on the traditional TV side as our clients adjust their business models from linear to streaming,” he said. “But privately, the conversations we have with clients and their contracts with us show that our business with them is much more productive than the noise suggests.”