Interesting documentaries to widen your horizon

I have watched a few interesting documentaries during this long weekend and I want to share with you what I think of them.

Gobekli Tepe

This documentary is called “The Cradle of the Gods” on Disney Plus. It’s about an ancient site in Turkey called Gobekli Tepe. The discovery of Gobekli Tepe, according to the documentary, turned what we thought we understood about human history and civilizations on its head. Before this discovery, we thought agriculture was the catalyst for religion and arts. Once people settled down and had more food produced and stored, they could finally have time and security to think about and develop religion.

Not in the case of Gobekli Tepe. The site consists of many structures on top of a steep hill that are made of stones weighing dozens or hundreds of tons. What makes Gobekli Tepe interesting is that scientists estimate the structures were made around the end of the last Ice Age, when humans were still hunters and gatherers, and there was no language, metal tools or even wheels to help move supremely heavy stones up the hill. Yet, the structures were still miraculously built. Scientists’ theory for why people, thousands of years ago, went through all that trouble to build the structure is that they want to have a place to celebrate their belief: humans are superior to savage animals. Such a belief banded hunters and gatherers together to achieve a monumental feat. Later, they settled on the lands at the bottom of the hill and started their journey towards agriculture and an early stage of civilization.

The theory proposed by scientists who discovered Gobekli Tepe meant that religion came before agriculture, not the other way around, at least in this case. I think it’s a fascinating documentary. Fortunately, it seems you can watch it on YouTube in full here:

The Lost City of Machu Picchu

Another documentary on Disney Plus is called “The Lost City of Machu Picchu”, featuring arguably the most intact archaeological site of the Inca. The Inca rule in South America in the 1400s and 1500s lasted only 100 years and was full of mysteries before it was brutally ended by the Spanish conquerors. The Spaniards destroyed every Inca city that they invaded, yet somehow Machu Picchu wasn’t discovered and fortunately survived. More than 100 years ago, an explorer named Hiram Bingham came across Machu Picchu and wrote a piece published on National Geographic about what he thought was the purpose of Machu Picchu.

What the scientists in this documentary found out; however, largely debunked Bingham’s theory. Moreover, they went in details on what builders did several hundred years ago to construct this monumental site. Machu Picchu was built on a treacherous ground. First of all, it’s on top of a mountain ridge; which poses a tremendous challenge in bringing heavy stones up from quarry sites nearby. Secondly and more importantly, Machu Picchu site has a lot of rain during the year. Without a sophisticated drainage system, the soil would have been eroded and the stones would have been washed away. By digging into the ground at Machu Picchu, the scientists learned about a magnificent construction feat by the Inca builders that not only effectively carries rain water away from the site and keep the soil from being eroded, but also directs drinkable water throughout the small city for allegedly a thousand inhabitants.

It blows my mind to watch the documentary and see how the Inca people made such an engineering and architecture achievement without sophisticated tools that we have nowadays. If you are interested in the Inca and Macu Picchu, you should check it out

Renovation
Source: The Habitatilist

All or Nothing on Tottenham

If you are a football/soccer fan, you’ll likely enjoy this one. The documentary chronicled the last season at Tottenham Hotspur, one of the biggest clubs in London and England in general. The Amazon Prime crew was given exclusive access to the players, the coaches, the manager, the Head of Recruitment, the staff, the Chairman and so on. They even secured permission to be present in some of the most sensitive conversations at a football club. For instance, viewers could see the conversation between Chairman Daniel Levy and Manager Jose Mourinho on Christian Eriksen, who had had only a few months on his contract and been on his way out of the club. Audience could also listen to a candid exchange between the manager and Dany Rose, who had been at the club for 12 years and demanded to play or he would prefer to leave; which he did.

There are a few things that fascinate me. First, the filming crew had to be very aware of the situations they were in. Imagine that as a manager, you were about to have a tough conversation with your players during half time and your team was down. I can imagine having someone else film the whole thing could be very irritating. Hence, the ability to blend in situations without being a disruption or annoyance is pretty admirable.

Second, as I mentioned above, the crew recorded some highly confidential and sensitive conversations at the club. There must have been a great deal of trust and professionalism between the club and the production crew. Otherwise, the whole thing would have been a catastrophe. Imagine what would have happened if the names of starting players for an important match had been leaked or transfer issues had been improperly disclosed to the press.

Third, the documentary, which has new episodes every week, pulls the curtain on what goes on behind the scenes at a football club: how they are treated physically, the training, the process before a match, the team hurdle, the psychological change, the struggle with injuries and so on. For me as a football fan, I am highly fascinated what I have seen so far. It’s available on Amazon Prime, you really should check it out.

Notes from Disney’s Q1 2020 earnings call

Today, Disney announced its Q1 2020 results. There are a lot to unpack as the business is pretty diverse. I am just covering some of the stuff I mainly care about.

Overall, revenue increased 36% year over year. The effect from investments in Disney+ is reflected on operating income which increased only by 9% compared to last year

Parks made up 35% of Disney’s revenue, but more than 58% of its operating income. Parks also provided the largest margin at 32% among Disney’s segments, followed by Media Networks.

Subscribers

  • Disney+: 28.6 million paid subscribers as of 3rd February 2020 from US, Canada, Netherlands, Australia and New Zealand
  • ESPN+ 7.6 million paid subscribers as of 3rd February 2020
  • Hulu has 30.7 million paid subscribers as of 3rd February 2020

Given that Disney publicly set a target of 60-90 million paid subscribers worldwide and of profitability in 2024, it is a promising start to reach the 28-million mark already just a few months after launch. Bob Iger wisely tried to play down any enthusiasm from the figures by citing the inability to point out the reason for the growth and uncertainty in the key international markets where Disney+ will debut soon.

Average Revenue Per User

The dip in ESPN+ and Hulu SVOD APRU was attributed to the bundle that offers Disney+, ESPN+ and Hulu Ad Supported for $12.99/month. Regarding the Hulu APRU, it’s even higher the non-ads subscription of $11.99/month. Christine McCarthy, Disney’s CFO, had the following comment:

The ad supported, the product is priced at $5.99. And but the ad-supported part of the equation makes the ARPU come out even higher than the ad-free. Most of the subscribers subscribe to the ad-supported. So that’s a good balance of the ARPUs when you stack them up next to each other.

Source: Atom Finance

Regarding the APRU of Disney+, since the service is offered at different pricing tiers including the promotion with Verizon, the 3-year plan last year, the bundle and full price, it’s difficult as to what to make out of the figure. Below are a few things from the earnings call:

  • 50% subscribers came directly from disney.com
  • Bob Iger mentioned “20% of those subscribers” came from Verizon. The comment in the earnings call wasn’t clear, but he clarified it in this interview with CNBC
  • Most subscribers came from the US
  • Conversion from free-to-pay and churn rates were better than what Disney had expected
  • No significant churn after Mandalorian Season 1 ended

Other notes

  • “It was 65% of the people who watch Mandalorian watch at least 10 other things”
  • Each Disney+ subscriber spent 6-7 hours every week on the service
  • 18-22% guests to parks were international guests
  • “Attendance at our domestic parks was up 2% in the first quarter, and per capita guest spending was up 10% on higher admissions, merchandise and food and beverage spending. Per room spending at our domestic hotels was up 4%, and occupancy was 92%. So far this quarter, domestic resort reservations are pacing up 4% compared to this time last year, and booked rates at our domestic hotels are currently pacing up 10%.”
  • The fight between McGregor and Tyrone brough “1 million pay-per-view purchases and 0.5 million new subscribers”

Disclosure: I own Disney stocks in my personal portfolio

Netflix’s change in view accounting and a misleading use of Google Trends

This week, Netflix dropped its latest earnings report. There are a lot of positive announcements from Netflix and kudos to them for weathering the rising competition from a plethora of streamers, so far. Nonetheless, there are a couple of notable points that I am either intrigued by or in disagreement with.

How a view is counted

Netflix used to register a view whenever a user passed a 70% of a show or a movie. Recently, the company changed that policy. According to the latest earnings report, whenever a viewer reaches a two-minute mark, it counts a view.

Source: Netflix

Netflix communicated the change in a tricky and inconspicuous manner. The explanation on the two-minute mark only came in the footer; which certainly isn’t where readers’ attention focuses on.

Source: Netflix

As you can see in the last sentence in the screenshot above, the change in the view accounting usually results in an increase in view because of obvious reasons. I don’t believe two minutes is enough to determine the intention of the audience. It is not uncommon that viewers watch 20 minutes of a show or a movie before leaving. If Netflix thinks that 70% is too high a standard, 40% or 50% would make more sense than the new implemented policy.

Using Google Trends to compare The Witcher with Mandalorian

In the Competition section of the report, Netflix dropped a Google Trends screenshot that showed interest in its currently flagship show The Witcher, Mandalorian, Jack Ryan and The Morning Show in the last 90 days worldwide

Source: Netflix

First of all, I am not sure this is an apple-to-apple comparison due to the difference in availability. Disney Plus is only available in US, CA, Australia, New Zealand and Netherlands. Even though Prime Video is supposedly accessible worldwide, while I was in Vietnam, I couldn’t watch many shows on the platform despite my membership.

Netflix said that even if Disney+ were global, the results wouldn’t be much different, citing the following result on Google Trends

I wouldn’t make that claim with such a degree of certainty. Netherlands is just a small country in Europe with about 17 millions in population. The viewership and interest in that country doesn’t equal to those worldwide.

Furthermore, the shakiness of the comparison can also come from the selection of keywords. Since The Witcher or Witcher is the name of a video game released in 2017, neither of the two keywords isn’t exclusive to the show on Netflix. Unfortunately, Google Trends doesn’t offer a feature that can clearly separate the show and the video game. The best that we can do is to filter the results by categories. I tested it out by comparing the keywords: Witcher, The Witcher,

As the screenshot shows, there is a big different between “Witcher” and “The Witcher”. The gap is even starker when “Netflix” is added to the search terms. If we set “Art and Entertainment” as the category, the picture will look a bit different

The Witcher/Witcher keywords had a spike on 21st December 2019, one day after the launch of the Netflix show while Mandalorian hit its peak on 28th December 2019, one day after the season finale. The difference between the yellow line and the red line is closer when we look at “Art & Entertainment” alone than when we look at “All categories” which may likely include the effect from The Witcher video game.

Now, the result above still doesn’t offer the full picture thanks to the difference in geographical availability, Let’s look at the US, two markets where every show is available

If we look at the United States alone for All Categories, it looks more favorable for Mandalorian. When “Art & Entertainment” is applied, it fares even better for Mandalorian

Here are the results for Canada

What about Australia?

My point is that there are several factors that affect how the search terms are presented on Google Trends and how results should be interpreted. I don’t have an idea on how the competing shows actually fare. I do believe that the way Netflix presented the information and data in its report is misleading at best.

Disclosure: I have Disney and Apple stocks in my portfolio.

First look at Disney Plus

Disney+, the biggest initiative and priority in the near future of the iconic company, went live today in the US and Canada. I have been using it for 2-3 hours and below is the summary of my experience so far.

The sign-up is pretty standard and smooth. Nothing major. Even though there was some reported difficulty in finding the app on Apple Store

Fairly expectedly, the app encountered some technical issues which users widely reported here. I have had my fair share as well

That led to Disney+ Help twitter page issued the statement below

In addition to the technical mishaps, I was a bit frustrated by the User Interface. While you can download episodes from the mobile app, I couldn’t find the feature on the browser version. I am not sure if that was intended to limit the downloads, but I was under impression that it was possible.

At the end of a movie, you are presented with a suggestion like the screenshot below, but there is no way to get back to the homepage or the category page

There is an “Extras” tab under the main banner of a movie/episode. They can be never-seen-before clips that viewers will appreciate. However, they could have made the tab more visible or added it to the end, in my opinion

There are some Extras clips on the mobile app that are not available on disneyplus.com.

At the bottom of the website, there is a tab called “Interest-based ads”. On that page, you can choose to opt out of behavioral targeting by ads companies on disneyplus.com

In terms of content, I am excited about National Geographic and Marvel. But to succeed, I do think Disney Plus has quite a long way to go and much to improve if they want to augment user experience

Disclaimer: I own Disney stocks in my personal portfolio