First of all, I want to thank all of you who wrote to me with words of encouragement, support and criticism following the last night’s release of the first ever edition of Pink’s Bottom Line on Media, Money and Sports. Please keep those comments coming, and I encourage to share your thoughts with other readers via the comments section.
Here’s today’s edition:
MEDIA: Window to a New World?
The way movies are distributed just might be changing. For most major movies, studios release films in what are called windows. The first window of a movie’s release, and essentially its debut to the public, is almost always to movie theaters. The second window is usually to video-on-demand services some weeks or months later after a film has been in theaters. Then, the movie might go to a streaming service. And so on.
However, that first window is crucial — particularly for the theaters — who get a movie before all other outlets and consequently benefit from the buzz and marketing push behind the film. (Note that in recent years some movies are released first directly to streaming services like Netflix.)
In any case, a disruption of that first window release to theaters happened this week when Disney announced that it was releasing Mulan first to its Disney+ streaming service, and not to cinemas in the United States. Disney will charge an additional $29.99 to Disney+ subscribers to watch the film. Overseas, though, Disney still plans to release Mulan to theaters first in countries where mostly theaters remain open
Pink’s Bottom LineWith domestic movies theaters already struggling mightily due to the Coronavirus pandemic, the release of Mulan directly to Disney+ sends a dire signal for the long-term survival of cinemas. More importantly, it indicates the growing importance and strength of direct-to-consumer content in the United States. Direct to consumer is the most important growth engine for content of all varieties. Look for the direct to consumer trend to accelerate dramatically in the coming months, not just for movies, but for all content.
MONEY: Go With the Flows
Something unusual happened in the arcane world of exchange traded fund flows in July. For those who aren’t familiar with exchange-traded funds (ETFs), they are similar to mutual funds but they trade like individual stocks on stock exchanges.
Here’s what happened: stock ETFs appeared to out of favor in the month of July if you look only at ETF inflow data. According to data from ETF.com, stock ETFs saw the fourth most inflows, behind bonds, metals and commodities funds. It’s a pretty unusual occurrence as one or two domestic ETF equity funds — usually the equivalent of index funds — often lead the inflow tables most months.
Pink’s Bottom LineOne month does not make a trend. However, it bears watching ETF inflow data closely for August, September and the rest of the year to see if a trend does indeed emerge. It could also mean that investors preferred to buy individual stocks for their equity exposure rather than ETFs. That is a potential trend worth watching as well for the rest of the year.
SPORTS: Big Changes Ahead for the NCAA?
The Big Ten, like other major college football conferences in the country, says it plans to play a ten-game regular season schedule with games only among conference opponents. As part of the new schedule, the Ohio State-Michigan game will be in late October, about a month before it’s usually played.
Considering potential health concerns around the Coronavirus, it’s been a tough call for conferences about whether or not to play the season. College football is the big money maker for many athletic departments so playing football this fall is a risk many schools simply had to take.
Pink’s Bottom LineWhat I find interesting is The Big Ten conference made its decision on its own, and that the other Power 5 conferences also made their decisions independently. I think that these decisions portend the beginning of end of the NCAA – or at least a significant change to the way that governing body operates. The NCAA could have marshaled support for a plan to work nationally, but it didn’t do that. As such, I predict major changes down the road for the NCAA… but Ohio State will still beat Michigan.
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