1. Sony Strikes A Deal With Netflix

Sony and Netflix struck a very mutually beneficial deal this week, a big win for both parties.

Sony, having let Playstation Vue pass into the great beyond, was lacking any sort of distribution source for its movies, something that rivals Disney, Paramount and Warner all had.

Netflix was lacking much in the way of anything-close-to-current movie options other than movies they’d produced themselves, which tended to be of the art house genre.

Which made it a perfect match.

Why It Matters

Netflix has had an odd journey with movies.

If you recall, they started life as a snail mail DVD delivery service back in the 00s, and were a prime source for all the most recent movies out on DVD.

When they made the switch to streaming, the studios freaked out because they saw how this would kill off their extremely profitable DVD businesses and, way back in 2011, put the screws on Starz, the company that sold Netflix the rights to stream new movies, so that Starz did not renew that deal. 

At which point Netflix was left with a bunch of Z-list movies and thus decided to focus on building up its television offering and the rest is history.

But back to movies.

Netflix’s own movies, like Roma and Mank have been very well received critically but are more art house than blockbuster.

The Sony deal will provide them with first window rights (e.g., immediately after theatrical release) to the sort of more mainstream movies they’ve been lacking, like Spiderman and others from the Marvel world.

This is important because Netflix is working on expanding its appeal beyond the educated coastal audiences that flocked to series like Orange Is The New Black, BoJack Horseman and The Queen’s Gambit.

Appealing to that audience (call them the “HBO Audience”) made sense in the early days because that’s who watched streaming TV, but as the streaming audience expands, Netflix needs to expand its appeal to more mainstream viewers, lest they lose those viewers to one of their eight main rivals.

Bridgerton, the Shonda Rhimes series, is a good example of how they’re looking to expand to a more mainstream audience on TV without sacrificing quality, and the Sony deal is how they’re looking to accomplish the same goals with movies. 

The question is whether they can be all things to all people, e.g, keep the people who want to watch films like Roma as well as the folks who like Spiderman movies. 

We’ll find out soon enough.

What You Need To Do About It

If you’re a rival Flix with a movie studio connection (Max, Paramount+ and Disney) this is actually a good development as it gets consumers even more conditioned to watching recent movies on TV. You’ll just need to think about when (and whether) to charge extra for those movies.

If you’re a rival Flix without a movie studio connection, time to focus on your TV programming and the advantages of specialization or at least being known for a certain genre or category of programming, given that Netflix has the “all things to all people’ category pretty much sewn up.

If you’re a trade journalist, maybe ease back on the “PVOD” acronym. They’re first run movies. On streaming. Some services charge extra for them, some don’t.

If you’re a Marvel fan and you're still leery about going back to a movie theater, this is really good news for you.

2. Majority of US TVs Are Now Smart TVs

A new study from our friends at Hub reveals that just over half (52%) of TVs in use in the US are now smart TVs.

This may seem exceptionally low, given that it’s been all but impossible to buy a TV that’s not a smart TV over the past four or five years, but remember that people hold on to their TVs for an average of around seven years, so it will take some time to get those older TVs out of the house.

Why It Matters

The big three smart TV OEMs--Samsung, Vizio and LG--are creating a new ecosystem on streaming. 

All three have their own good sized FASTs, their own data and measurement arms and their own ad sales teams.

Because people tend to watch the same TV over the course of an evening, they’ve become frequency capping superstars, given that they can account for everything the viewer is watching, whether linear, streaming or on demand.

This also makes them an excellent source of cross-platform viewing data.

Finally, because the smart TV OEMs have done a huge job of stepping up their interface game--and because they haven’t gotten into petty battles with the various Flixes--they’re starting to see more and more people give up their dongles and go straight to the OEM interface, which gives them even more data and ad opportunities.

What You Need To Do About It

If you’re a streaming service of any type--Flix, FAST or Niche, make sure you have a presence on the smart TV OEM’s homescreens and then make sure you update those apps in a timely manner. More and more viewers are heading there first and the OEMs are going to treat you better than Roku and Amazon.

If you’re a viewer and you haven’t checked out your smart TV’s interface, give it a try. I suspect you’ll be pleasantly surprised.

If  you’re an advertiser and you’re worried about people seeing your commercials twenty times over the course of an evening, check out the smart TV OEMs and what they can to to stop that.

If you’re in the industry and you want to know more about this evolving smart TV ecosystem, keep your eyes open for a series of Special Reports and other programming fromTV[R]EV on just this very topic.