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Streaming media expert Dan Rayburn explains why he's focused on packaging, bundling and distribution of content services (0:30) Netflix understands what consumers want (11:45) Disney earnings; digital business getting a lot harder to track (16:30) Fubo playing the long game (23:50) WBD definitely one to keep an eye on (27:10) Sports viewership data and methodology (37:30)

Transcript

Rena Sherbill: Dan Rayburn, media expert extraordinaire. Always great to talk to you on Investing Experts. Thanks for coming on.

Dan Rayburn: Appreciate you having me back on. You know I love talking about my industry, streaming, and everything that's going on and that changes what seems like every single day.

Rena Sherbill: And you know we love an expert, so win-win as we like to say and as we like to experience.

So talk to us, you're looking out at the media landscape, what are you most focused on these days?

Dan Rayburn: Packaging, bundling and distribution of content services. That's really where this whole industry is going.

Everybody wants to sit around and argue about a lot of things that consumers are not looking at on the technology end. I say all the time, people look at pictures, not pixels. And I'm not the first one to say that. That dates back when still photography was just getting started in the world, really.

But it all comes down to frictionless consumer sign up for things that are easy, simple to use, has the content they want in the business model that they want, whether that's AVOD, SVOD, FAST, those are just types of business models, those aren't services.

But I'm always looking at how everything is being packaged and bundled and sold to the consumer, even though I'm tracking all the technology nerd stuff on the back end.

Rena Sherbill: So when you're looking at specific companies, what are you looking at or who are you looking at to begin with?

Dan Rayburn: Well, I'm covering everybody in the ecosystem that's actually delivering the services behind the scenes that consumers don't know about.

So yes, they know the hyperscalers of Amazon (AMZN) and Microsoft (MSFT) and Google (GOOG) (GOOGL), but there's hundreds, if not thousands of companies behind the scenes that are doing ingestion, transcoding, storage, media management, content protection.

So I'm tracking the vendor landscape on one side and then flip side, I'm tracking all the services in the market available to consumers from a pay TV standpoint, pay to own, pay to rent, pay to download, subscription services, free services like FAST.

I'm tracking that side of it as well. So it's a lot of different companies of which there's about 50 that I track that are public that are tied into video in some way, or form, but they all look very different in the sense that Netflix (NFLX) gets its revenue from a content service that it delivers via stream media technology.

That looks very different than a company like Disney (DIS) that has parks and other lines of business. So comparing the numbers and the services from company to company, it's very important you do that in a way that's factual as opposed to opinion-based.

Rena Sherbill: Facts over opinion. We also love that. It's a good place to be focused.

Dan Rayburn: I'm always focused on that. Yes. And I always say facts over fear.

Rena Sherbill: That's even better actually. I've never heard that. I like that a lot.

Dan Rayburn: Well, there's a lot of investors out there that don't really understand the market. Even on the Wall Street side, PEs, VCs, institutional money managers who I deal with a lot, most of them are not specialists. So they're tracking dozens, in some cases, a hundred different companies.

I remember as an example, when Disney announced Disney Plus, all these different institutional money managers reaching out to me and saying, uh-oh, we better drop our Netflix stock because Disney is going to put Netflix out of business. I was like, guys, just chill out here. These are two different services.

Here's the difference between them. Here's who there's targeting. So a lot of it is just based on how the investment model works out there. There's very few individuals who are really specialists in any one particular industry. So it just means you have to do a lot of education in the market.

Rena Sherbill: The last couple of times you've been on something that I've thought about subsequent to those conversations has been that you've addressed the fact that each streamer has or each content hub, be it Disney, be it Netflix, be it Amazon, be it YouTube, has its own personality. And that's how they're purveying or that's how they're seeing the that's the lens that they're seeing their content through.

When you're looking at those companies, are you thinking about them in terms of the fact that they can contain sports, they can contain content, they can contain parks? Are you looking at those separate columns? Are you looking at them as companies? Is that a question that's understood?

Dan Rayburn: Yes, I'm always breaking it out based on what are the lines of the business. Companies break out businesses differently in terms of what they call it. And I don't care about terms like enterprise. What does that mean? I don't know.

Everybody finds it differently or the word premium. We see that in the market sometimes. What's premium? Well, your version of premium and mine might be different, but we're both accurate in our definitions because consumers have different habits. We define quality differently.

So words have meaning. That's why every time I'm writing for on LinkedIn or my podcast or talking, I'm always trying to make sure I'm using words that have a concrete definition. know, words that end in probably, likely, usually, I see people use those words all the time.

There's no concrete definition. So when you're looking at companies' business lines, when you're looking at how they report metrics, when you're looking at how they report numbers to Wall Street, I think it's really important you get that accurate in particular because of everything going on with AI.

There's three or four things I see every single day that I'm correcting on LinkedIn where, and this is at the Wall Street Journal, New York Times, pick whoever you want, where they state things as facts, but then they don't say what the source is and they're implying it's accurate. We see this all the time when people say Netflix's turn is 2%.

The Wall Street Journal recently did an article on that and I reached out to the author and said Netflix and the history of their company has never defined their turn. Where do you get that from? Well, it's from third party data from antenna. Well, you don't say it's an estimate and you don't say it's from a third party and you don't source it anywhere in your article.

So people just run with it. So that's a big problem I see in my space. I don't know about other industries because I don't track them. just it's incredible how many people can't even report to the market the actual numbers that these companies are putting out.

And I see this all the time with Disney when people say, well, Disney Plus had X volume of revenue this quarter. That's not how Disney breaks out their revenue. They break it out D2C. D2C encompasses more than just Disney Plus.

I think in the age of AI, accuracy is everything and as an analyst in the space, the only thing anyone has, the only thing you're ever building in what I've focused on for 30 years is trust. That's it. Trust with readers, trust with listeners. They have to trust where you're getting your information and you have to be able to source it properly.

Rena Sherbill: Yeah, couldn't agree more. And to your point about fear over facts, I think many times the point of the media that you're consuming is to get you scared or to get you agitated or to get you clicking through something and it is not to inform. So, yeah, double down on the people that are truly wanting to inform, which I feel about your content. So appreciate you being trustworthy, especially today.

So let me ask you this, when you look at the publicly traded companies, let's say Netflix, for example, do you ever see them getting into something like theme parks? Is that something that you envision for them down the line or are going to be strictly content?

Dan Rayburn: So I have no opinion on that because it would not be based on any data of any kind.

Rena Sherbill: That was quite the segue that I put you through, wasn't it? From facts to speculation.

Dan Rayburn: No, it's fine. People ask me questions all the time. Now what I always say is I don't guess and make educated decisions based off of data.

Also, some of the companies we might be talking about, just keep in mind, I might be under NDA with. So what they're working on or what their future plans are, can't release.

Now why would I be under NDA? Well, in many cases, you know, I'm not a website that's trying to break news. I'm not selling ads. That's not what I do. I have relationships with companies over 30 years and they trust me. Sometimes when we're talking financials or future plans.

Or in many cases, I get to test new versions of streaming services before they hit the market, devices as well. That has to be done under an NDA. But it's really just a handshake that they trust you and agree you're not going to put out the information.

Netflix's future plans, I couldn't say in terms of if they're going to do something in person. I think what people would say is, well, know, Dan, they said they would never get into live and they did. Yeah, they always said they were never going to do ads and they did. Yeah, they're absolutely right.

But also Netflix, like any good company out there, has to change their business model and adapt it based on what's going on in the market at the time.

When you're talking about physical, now they do own some movie theaters, they're already in the business of having some physical infrastructure. But when you're talking about theme parks and things like that, that's a completely different business obviously than they're used to running where they're getting the majority of the revenue from an online service. I don't know if they would stray that far.

The question I get more asked more often on Netflix is just when are they going to get a full year of NFL games because people always say, well, they said they would never do live sports and now they're, they're doing baseball. They're doing football. They're bringing other sports into the platform. True.

But I think the key point to take away on that question is that Netflix is co-CEO said just a few months ago when they were at, when he was asked on stage, will you get just what really you're asking is will you expand your business when you get into doing an entire season of the NFL?

And what he said was they didn't have a way to measure the success of what it means to their platform if they went out and spent billions of dollars to get an entire season of NFL if it was something similar like YouTube TV NFL Sunday ticket. So he's saying we don't even know how to measure if we had that, if that would be beneficial to our business.

And I thought that was a fascinating answer because it wasn't yes or no. It was, we don't have the data to even make an educated decision if that's something we should look at. That still shows you just how early we are in the market.

A lot of listeners won't know this, but streaming media technology was first developed in 1994. Some of the first live events that myself and others worked on with Apple was in 1995. So we've actually been streaming content, OK, audio only back then, really poor quality.

But the technology is 32 years old. The industry itself, know, industry is kind of a broad term, you know, that's 28, 29 years old. So it's incredible three decades later where we're just getting to the point now of really figuring out as an industry, how do consumers really want to consume content and for a Disney, Netflix, (WBD), Paramount (PSKY), their core business is figuring out how do you price, package, productize, market and sell a service?

And is it best to do that standalone to certain customer bundle aggregator? What type of device device might impact price based on screen size as we've seen in other countries. That's really where the business is going right now is just what do consumers want and what's the best way to package it for them.

Rena Sherbill: So what would you say about Netflix if you're putting facts to the narrative or to the depiction of the stock? What would you say about Netflix these days?

Dan Rayburn: Netflix understands what consumers want. I think it's interesting when people want to argue that they don't like Netflix because it doesn't have the content they want. Well, they're not wrong. Some people, Netflix is not going to be a fit, but neither is Disney or WBD with HBO Max.

Consumers have different preferences. They have different price points. They focus on quality differently. Some care about live on demand. Some care about sports. Some don't.

It's not a one size fits all model. And that's the most difficult part for all of these content owners and broadcasters is where do they invest their money in creating or licensing content? How much do they invest and how do they spread that out across different genres over the course of the year?

I like looking at Netflix from a financial standpoint because their balance sheet is very clear. They reported their Q1 results last month in April. Revenue year over year was up 16%. Net income was 5.28 billion. We have to look at which businesses are profitable and which aren't now.

The 5.28 billion, that was obviously boosting significantly by the $2.8 billion windfall from the terminated Warner Bros. deal. So you got to take that into context. But they also talked about their ad business, expecting it to double this year, reaching 3 billion in revenue.

That's really important. Also, the number they gave out that in countries where the advertising plan is offered, more than 60 % of new signups in countries with that tier are going for the ad plan.

And Netflix is clearly playing the long game here on the ad side. If revenue on the ad side is three billion this year, just think of where that business is going to go over time as they get more targeted with their ads.

They also released a number in earnings that they said they're now working with over 4,000 advertisers, which is up 70 % year over year. So it's ad businesses really starting to grow. Starting to get traction in the US, they raised prices again, between one to $3 that kicked off on March 26th, which is going to help them with total revenue, which means they're going to invest more in the business, create more content, pick and choose the right live, large scale live events to go after.

So I think they understand their business very well. Now flip side, someone on Wall Street would say, their ad business isn't growing fast enough, we want it to grow faster.

They no longer break out ARPU, so that's very hard to track across their business now. They no longer break out the number of subs that they're gaining or losing every quarter. Almost nobody's doing that anymore. WBD just removed that from their earnings, this Q1 reporting as well.

But I think Netflix is very well understood. I don't think anybody should be confused by Netflix's business. It's very clear who they are, what they do, and how focused they are in the market.

Rena Sherbill: When you were on the past couple of times, you were counseling us to take the, to the point about, you know, the promise of headlines that aren't necessarily factual, that everybody was convinced that Netflix and WBD, that the deal would be done. And now it's not anything of note to add to that fact that, you know, that what ended up happening with Netflix and WBD, anything to note there?

Dan Rayburn: I would just say I love what Netflix came out and said. If anyone's a Netflix shareholder, I'm sure they saw it, which they said, the deal would have been a nice to have, but not a must to have.

The smartest people in the business world are the ones who know when to walk away, the ones who know when to say no. It doesn't work for a balance sheet. This is not a good investment for shareholders. We're not just going to buy whatever at any price.

If you can remove emotions from your decision, you're going to make smarter decisions. I think that's the hardest thing we all have to do in life and in business, right? Remove emotions from decisions.

Netflix was really clear, if it's above this price point, it doesn't make sense for us. Okay, it's above that price point, we're out. It's not a good fit. And so I love the fact that they're that disciplined.

Rena Sherbill: I feel like anybody that was bullish on Netflix really got to double down on that bullishness. I feel like when that news came out, was switching to Disney. Is that a good place to switch? They had earnings recently. Should we get into Disney?

Dan Rayburn: Sure, so Disney did have earnings. They also have a new CEO. Disney's business is getting on the digital side, direct to consumer, whichever term you want to use there, is getting a lot harder to track. Like other companies that have a direct to consumer streaming business, Disney no longer breaks out ARPU, Average Admin per User.

They no longer break out subscriber numbers for Disney Plus and Hulu. They, in their earnings and in the call afterwards, they gave out no subscriber data for ESPN Unlimited.

So it's very hard to track with any real clarity quarter to quarter just what their digital business is doing.

Also remember that recently the deal's finally gone through where Hulu plus live subscribers are now where we're at Fubo (FUBO). And with Fubo's earnings, they stopped breaking out how many of their subs are Fubo or Hulu plus live TV.

So we can no longer track which one of those services between the two of them are growing or losing subs because they combine the number together.

Rena Sherbill: What is your sense of why they did that?

Dan Rayburn: Well...the biggest reason they did that is because every single one of these companies is following what Apple (AAPL) very smartly did many years ago.

Apple stock was getting crushed at times because the number of iPhones sold didn't hit estimates that Wall Street would put out there.

And what Apple was very clearly trying to tell Wall Street was we could sell fewer iPhones one quarter, but have better margins. And you should really look at our business as a whole, as opposed to just looking at the number of phones we sell.

And I completely agree. You can sell fewer phones at a higher price and make more money. So all of the streaming services moved, almost every single one, have moved to that model over the last few years of we now have blended ARPU.

Look at Netflix as an example. They only had a subscription service. The moment you add in advertising, that definitely changes your revenue mix. And you should start looking at the overall business, not just how many subscribers, because you could have more subscribers come in, but at a lower price point, and it's going to impact your numbers or vice versa.

So I'm not surprised that everybody followed the Apple model here of let's focus on the business and the margins and the profitability as opposed to just how many subs did we gain or lose?

Also, many of these companies are looking at this business over a multi-year period. So if they gain or lose 1 million or 2 million or 3 million or even 5 million subs in a quarter, for many of them, that's not a big deal.

In particular, since they call out to Wall Street all the time, this quarter happens to be a quarter we expect low subscriber growth because we don't have March Madness or the Super Bowl or some of the other, these other things that we know drive subscribers or season two or three or four of a show that's super popular.

There are ebbs and flows in content. So I think that's smarter than to do that on the flip side as an analyst in the space. I want as much data as I can get. I want ARPU. I want to know what the average CPM is. I want to know what churn rate is.

Now, some of these companies will discuss that off the record that I then can't publish. And I should probably also just throw out there. There's a lot of companies that we're talking about today whose stock I cannot own and do not own because of the information I get.

I should put that out there. But Disney to me is a pretty straightforward story of what they're doing on the digital side. Disney Plus and Hulu's revenue was up 13 % year over year.

But more importantly, its operating income was 582 million. That's a big deal. Because anyone who follows Disney will know at one point its DTC business was losing $100 million a day. They lost 1.1 billion in one quarter on their DTC business.

So it's great to see them make that pivot to where operating income was 582 million a quarter.

But keep in mind that doesn't include ESPN Unlimited. That falls under a different bucket of how they report their revenue to Wall Street. And then you have a new CEO. We don't really have much from him yet as far as major changes he's thinking about. Maybe he's not thinking of many there.

There was a little information about content spending where they did say that the increase in content spending they're going to do this year, a greater volume of that is going to go to international content and local originals.

That makes a lot of sense considering Disney Plus has really expanded outside the U.S. very well over the last couple of years. And then just looking at the stock, in the past 12 months, it's down about 5%. So it's been pretty flat, but in the past five years it's down almost 40%. So many are still waiting for that stock to recover.

Rena Sherbill: Do you have a sense of what would make it recover?

Dan Rayburn: No, and the reason I say that is I don't give out information or pretend to be a Wall Street analyst, institutional money manager saying, well, if the company just corrected this, the stock would go up or down. I leave that to those people who do that for a living.

I will say that overall, we've seen in the market for many years ago, right after COVID, what did we see? We saw all these companies being rewarded just for growing subs. The model was Get Big Fast.

Who cares if you're losing money? Just continue to grow. And then at one point, all of a sudden, it seemed like overnight, but within two quarters, Wall Street said, stop. You're losing too much money. We want profitability from these direct to consumer services.

And that really changed a lot of what these companies were doing with their services. And you also notice that's when we saw the highest rate of increase of pricing going up across the board across pretty much every single service out there and more frequently as well because they had to offset the losses.

So if you're looking at Disney or any other company, naturally you're always looking at the balance sheet. But the other reason not to answer that question is everyone has a different approach when it comes to investing.

Short term, long term, are you playing quarter to quarter? Are you looking more at the parks business? Disney just had a great Q1 in terms of the parks business.

But then we've also known there's been times where the parks business hasn't done well. So certain pieces of their business certainly fluctuate more than others. Some are more stable than others. You have a new CEO in there. Sometimes that scares investors.

Other times, investors are very excited. That's something else too that's hard to weigh. But I'm always looking at a company's balance sheet and where they're spending money, where they're investing, and what gains they're getting from those investments.

Rena Sherbill: You mentioned FUBO also reporting. What other earnings, happy to hear more about them in depth and also what other earnings you've been looking at recently.

Dan Rayburn: Sure, so Fubo is a pretty straightforward one. Their revenue in Q1 was pretty much flat. It only up 1 % over a year. The key thing for Fubo is that they had a net loss of $6.2 million. And that's down from $40.9 million year over year.

So Fubo has done a great job, that management team over the last, call it two to two and a half years, of really fixing their balance sheet because they were losing far too much money every quarter.

They lost 200,000 North American subscribers, but that includes Hulu plus live TV subs. So we don't know whether that came more from Hulu or more from Fubo. They lost just over quarter million subs in what they call rest of world as well.

I think the way to look at Fubo is really the long term here. Because they will start selling Hulu plus live TV packages on their website and Fubo Sports is going to be included in ESPN's funnel next year. Fubo is playing the long game here.

They're still saying that positive free cash flow is expected in fiscal 2027 and fiscal 2028 under their current operating plan, obviously that could change. And they ended the quarter with 244 million in cash, cash equivalents, restricted cash, all that kind of stuff.

So they don't have a cash problem. Their burn is really low. What they've got to do is figure out how do they grow this business? How do they scale it? How do they double in size in terms of the number of subs? And I think what they're really playing on there and something they've talked a lot about is just what they get from the deal with Disney brand, the marketing reach, the advertising sales.

They're playing long term with their business. That said, again, I don't own any Fubo stock, but in the past five years, our stock's down almost 95%. Past 12 months, it's down 71%. Wall Street really wants to see Fubo prove that they can execute on the plan that they've outlined.

I think they now have all the pieces really try and get there, but I'm not going to handicap whether they can reach their objectives in the next two or three years.

Rena Sherbill: Any other companies you would add to the earnings conversation?

Dan Rayburn: Well, you have to always look at WBD, especially since we're talking about potentially a merger with Paramount Skydance, which again, that deal's not going through, even though headlines say otherwise. It's not been approved by regulators.

The DOJ is still looking at it. European regulatory agencies are still looking at it. There was shareholders vote on April 23rd. They did overwhelmingly approve the adoption merger.

But it's not a done deal. The latest numbers we have from WBD is they're saying they expect the deal to go through by the end of Q3. So that would be, you know, last day in September. Their filings, that's what they're talking about in terms of they believe they can get through all the regulatory hurdles they need to by then.

WBD is definitely one to keep an eye on.

In Q1 for the first time ever they didn't break out their streaming subs. So again, another data point removed from the market. They did say that they have more than 140 million global streaming subscribers and they're still on track to surpass 150 million by the end of 2026.

Their streaming revenue is only up 7 % year over year. But the key thing here is their earnings EBITDA, I should say adjusted EBITDA for D2C was 438 million. That's important because again, you you look back years ago, these guys were losing a lot of money on their D2C business.

Similar to Netflix, interesting that they put out a number saying 50 % of new global subscribers on the retail side are taking the ad-supported tier. And advertising revenue is up 19 % year-over-year. Well, not surprising. If you're getting more ad-lite subscribers, you're definitely going to get more streaming revenue. They also raised pricing. They said they saw quote limited churn. That was the term they used from the price increase.

So one thing that we always have in my industry is pricing goes up and everybody throws up their hands and it's like, all these consumers are going to cancel. Nobody likes price increases. And yet then on earnings calls from these public companies, they talk about how little churn they've seen.

So what we're watching in the industry is what is the threshold when customers finally say, I'm not just going to complain about it, I'm actually going to cancel.

That's really what we're watching. Now at the same time their advertising business did very well, they also talked about the visibility in the advertising market remains limited given all those broader macro uncertainty issues taking place in the market.

Linear advertising revenues are down 12%. Well, that's not going to surprise anyone listening who follows the pay TV business because that's the trend we're seeing. on one side, pay TV related revenue from linear is going down, but digital is making up for that. But at some point, it's got to go to where digital is doing more than just making up for linear declines.

It really has to be the overall growth of the business moving forward. Their stock past 12 months, it's up 197%. Now that of course is coming from the excitement of the acquisition and the offer price and everything else. So that's not surprising.

But if you look at the business outside of that in the last five years, the stock's down almost 24 % because you have a legacy business. And we know how Wall Street looks at legacy pay TV businesses. I should be more specific, a legacy pay TV business, a linear business.

We know how Wall Street looks at that. So it's an interesting time in the market for Wall Street to putting valuations on companies like Disney, WBD, and Paramount who have some or a large portion of their businesses from the legacy linear space.

Others that I look at, I look at quite a few others, sometimes a little more specific just in terms of obviously Paramount Skydance.

I look at Apple, I look at others where it's tied to Roku (ROKU), Fox (FOX).

A lot of those companies, however, don't put out really any data. For instance, Fox just had earnings, but they put out no data on Fox One. They didn't mention how many subs they have. They didn't say anything about if it was growing or not. They gave out no revenue information on Pluto TV. They gave out no CPM data.

So while I track all those companies, a lot of them don't put out any or useful data in the market quarter to quarter.

Rena Sherbill: And I feel like I've asked you this before, but my sense is if they had something to celebrate, it would be celebrated.

Dan Rayburn: Not necessarily. You you would think that. However, what we've seen in the market, let me give the example of the Super Bowl. Super Bowl has been streamed online 15 years, I believe it is. If you go to superbowlstreaming.com, I don't know how I still own that domain, but you can see a chart broken out of viewership over the last 15 years.

In 2026, it was the first year that viewership was not released for the Super Bowl tied to streaming or digital. NBC didn't put it out. Now, the reason they didn't put it out is because it was behind a paywall. It was on Peacock. In 2025, the Super Bowl was free. Fox put it on Tubi.

So Peacock's numbers are gonna be lower than Tubi. We know that, there's nothing wrong with that. One was free and one was behind a paywall. But they didn't put them out. And the reason they didn't put them out is because a lot of people in the industry would say, wow, that wasn't successful. They only had X percentage of what Tubi had.

Well, that's not a fair comparison. Free versus paid, why are you comparing those two? But clearly it scared them enough to where they didn't even put out numbers. And I know the numbers and you know what, the numbers were pretty good considering it was a firewall, or I shouldn't say firewall, it was behind a streaming service where you had to pay to get it. So it's interesting how numbers many times will scare companies because the perception in the market is, wow, that's all they have?

It should have been bigger than that. Why should it been bigger than that? And so I'd rather they put the numbers out and set proper expectations in the market, which is your number one job as a public company with Wall Street, is to set proper expectations.

The whole reason you do full year revenue guidance, or most companies, not everyone does that. You're setting expectations of where the business is going to go, or where you think it's going to go, projecting it's going to go. But we have no numbers from Fox on Fox One, and I think the number is pretty good based on what I know.

But you would have many people in the industry where if they release those numbers would just say, you know, the headlines would be like, Fox One not showing success in the market because the first thing they're going to do is compare it to numbers at Disney Plus.

Well, those are two different services. One is live, one is on demand. One is ten dollars a month. One is thirty dollars a month. One is sports, one doesn't. So it's just, unfortunately, it's what the media industry does is compare one service or one company to another unfairly.

Rena Sherbill: Do you know, is that common like in a burgeoning, I mean, it's funny that we're calling media a burgeoning industry, but it is in terms of its evolution.

Is that particular to have data that's released that it evolves over time or does that come from pressure? Does that come from shareholder pressure? Or does that not change?

Dan Rayburn: It's a good question and I have no way to answer that because companies think of this differently.

Let's look at recently Amazon for the first time broke out the run rate of its chip business. Previously they hadn't given that out. Now why did they decide to give out that information now?

I have no idea. Maybe to them internally they said when it hits this run rate, that's when we drop the number. So companies have different reasons for doing that.

What I always prefer is for companies to get in front of what the message is in the market. If you don't deliver a message, someone else will deliver it for you.

So I say to companies all the time, hey, have you seen all these posts where people think you're gonna do 100 million simultaneous streams for the Super Bowl in three years? And they're like, yeah, that's crazy. And I'm like, it's not crazy because nobody from your company has said the opposite.

So why don't you just do a post that talks about here's the history of streaming, for instance, the Super Bowl and just those are facts. We have some numbers on that day. But most companies don't really do that.

And most in this, in my space, at least the vast majority of them, I hate to say this, but it's factually accurate. The vast majority them are not taking the time to look anything up. They're not looking at 8K filings and they can't read press releases.

It's incredible how many times we do get viewership data on a live sports event. And people who read that press release make up their own terminology or swap out words.

Netflix is a great example. Netflix, NFL games on Christmas did not break out the percentage of viewership that was actually on Netflix.

They combine Netflix with NFL digital platforms outside the US with over the air, all in one number, and yet I would say 90 % of the posts I saw by the media said Netflix had X number of streaming viewers. It's not what the press really said. They didn't use the word streaming. They said viewers. So the media threw the word streaming in there.

So that's a big problem I have in my space is just every single day people were reporting numbers inaccurately and it's really just, it comes down to just laziness. They really don't care. They just want to get something up.

And now I see it very often on LinkedIn where they're using an AI tool just to go and look at something and recap something. It's interesting how many times the tool doesn't know any better. And it swaps out a word like simultaneous with average minute audience with concurrent users with unique devices because they think they're all interchangeable and they're not.

And that just goes back to the trust factor of where you're getting your information and who you're reading it from.

Rena Sherbill: You better make sure that AI is as reliable as a fully, almost fully formed human. Speaking of burgeoning, I mean, there's so many established industries that have burgeoning things coming through them.

Sports wise, we have some NBA playoffs on Amazon, on Peacock, we have the World Cup coming this summer. As you mentioned, we have MLB. What are you looking at? How are you digesting sports?

Dan Rayburn: I'm always looking at the data that's put out from a viewership standpoint and looking at the methodology. The biggest thing for listeners to know is any numbers they're seeing, even when they're directly from NBC Sports, Fox, Amazon, pick whoever you like, they can't be compared to previous years because the methodology has changed.

That's a big problem. So I love the companies and most of them are very good at this. They're putting out numbers.

But with their numbers, they are clearly calling out, hey, by the way, Nielsen didn't include out of home viewing in its estimates until 2020. And it only began doing so in 100 % of their markets a year ago. and by the way, their new methodology that combines its traditional panel with big data from smart TVs and set-top boxes, that's only a few months old.

So some of them literally will say, all of these changes are going to skew any historical comparisons prior to certain years or from last year depending on how they're tracking it.

So we have numbers in the space. The big problem is that they're not really comparable to previous years and many of the companies don't break out what percentage of viewership is digital.

Fox has never broken out anything viewership wise of what was digital versus TV. And yet NBC, shout out to them, for almost every single thing they do, they break out the percentage of viewership that came from Peacock versus NBC linear, which is awesome.

Rena Sherbill: May I ask, are those numbers typically, have they typically been impressive?

Dan Rayburn: All depends on what you define as impressive.

Rena Sherbill: Industry leading?

Dan Rayburn: Again, there's no such thing as industry leading because we have nothing to compare it to. So let's look at the NBA matchup between the 76ers and Celtics. This was this month in May. It had a total audience delivery, what we call a tad of 11 million viewers on NBC and Peacock.

Out of that, Peacock had a 1.8 million AMA, average minute audience. Now NBC says it's the most streamed NBA game on Peacock, 1.8 million viewers. So you tell me, is that big? I don't know. Define big. Is that impressive to you? It might be to you, but not to your friend.

So it all depends on how we value numbers and we value digital. If we look at Prime's regular season schedule, they averaged 1 million US viewers across 67 regular NBA games. A million viewers. So is that big? I don't know.

Now, what Amazon says is across comparable game windows presented on linear networks last season, NBA and Prime averaged just under 1.1 million viewers, okay, well that's down year over year. Now it's down by a very small number, but it's still down.

Opening round NHL Stanley Cup playoffs, it averaged 1.2 million viewers on ESPN's, all their networks and TNT Sports. Now in their press release, I thought it was interesting where they said it was up by some huge percentage number, except that again, the methodology that's being used this year is very different from previous years. Fox is averaging 2.1 million viewers for MLB on TV and digital, but they're not breaking that out.

We move on to Apple with F1. Apple only gave out one reference, not even a number, for the first weekend of F1. And they said viewership was quote, up year over year compared with ESPN's coverage. However, they provided no number and ESPN was using Nielsen's ratings to come up with their number. Apple isn't using Nielsen for methodology for F1.

So what methodology is Apple using when comparing to ESPN? I don't know. We really just, we have no idea. And to put it in perspective.

2025 season of F1 across ESPN, ESPN2, ABC, all their channels, 24 races, they averaged 1.3 million AMA. So the hard part here in terms of comparing viewership numbers is what people value or sorry, what people define as success and it's different in the industry, the measurement is different.

I think the big call out here is Netflix. You were asking before about Netflix and we were talking live sports.

That is the one to look at. If listeners want to hear how confusing it is in the market and viewership, let's look at Netflix's Major League Baseball opening night. So they had three million AMA, average minute audience.

However, Netflix used Nielsen's Big Data Plus panel, Live Plus SD. So what many listeners don't know is it's not just how many people watched the live stream, it's how many people watched it potentially up to 24 hours after the event is over.

Now, Nielsen's big data measurement is new for the 2025-2026 season. So it completely skews viewership comparisons to previous years. However, even though that happened in terms of different methodology,

Netflix came out and said it's the highest primetime opening day viewership among 18 to 49 year olds and 18 to 34 year olds since 2017. The question I would have is why are they comparing a game from nine years ago?

The methodologies changed so many times. And also the 2017 game was available on TV and Netflix's game was only available streaming. The TV game was available in the US. Netflix's game was available globally. That's just one baseball game. And look how confusing it is to look at who watched what when on what platform.

Rena Sherbill: How would you articulate, or is there a place for articulating how you would standardize the industry data?

Dan Rayburn: It's a great question and something the industry has talked about for a long time, but for listeners who don't understand the streaming space, in 31 years of this industry, we've never had a standard bitrate, codec, aspect ratio, player, protocol, format, device, CPM measurement, nothing.

There is no standard in the streaming world. We've started to move to certain protocols for video delivery, HLS, Dash, some of that type of technology, but there is no standard.

And the difference there even with quality is you and I are in different cities and we both turn on Fox and whatever city we're in, we get the exact same quality. There's no deviation in the quality.

Broadcast is a standard. In the streaming world, there is no standard and the devices come from third party companies, not the last mile provider who's providing that cable into your home onto a box that they own and operate. So it's a completely different industry.

And I'm always making the argument that everybody wants to measure streaming like TV. Why? Two completely different types of viewership on different devices and they should really have different measurement.

I get why advertisers are doing it. I would say for live events, what I think is easy is just everybody should go back to simultaneous streams. In the early days of the internet, after a live event, companies would put out the total number of simultaneous streams at peak that they hit at any given time. It's really today what we call AMA, average minute audience.

And they know those numbers in real time because the content delivery networks, the third party companies are using to deliver it. They're in their dashboards and they can see it. Or if they're delivering it over their own CDN, they can see it.

But nobody uses those numbers anymore. So everything is just tied to how do advertisers want to see it or this is how we want advertisers to get that methodology or that data. But this idea that the industry is going to come together to create some sort of standard, that is never going to happen.

That's just...It sounds great, but that's the same idea of you and I saying, one day all the streaming services will bundle it into one place where you can get everything for one price. That's not happening. It's just not realistic.

Rena Sherbill: One day all the streaming services are going to hold hands and create the biggest rainbow this world has ever seen.

Dan Rayburn: Well, you know what listeners don't know? About 20 years ago, the five major movie studios got together to create a streaming service where you could go and rent or download the own content and it didn't work out too well.

And later on, they were actually sued for getting together to price fix content, charging consumers more.

When you're thinking about what we want as consumers, stop using logic. Because this is not about what's logical. This is about what makes companies the most money, whether they're sports leagues, they're broadcasters, or they're OTT platforms. That's what drives the decisions.

Rena Sherbill: This is your hopeful moment for the day.

Dan, I've been asking guests at the end of conversations if they have a motto that they invest by or live by. Do you have one?

Dan Rayburn: Well, my job as I see it is one thing and one thing only in the industry 30 years later is to inform, educate, and empower others. That's it.

If I put out the right information, you can make an informed decision. My job isn't to tell you here's what you should do based on the information, but to give you the right information to make the right decision.

The other thing I always say in business is I always invest in people, not ideas. Because 30 years in business, I've seen a lot of great ideas come to the market, great technology that comes to the market, but it doesn't get adopted.

And it doesn't get adopted because there's no business use case. It just doesn't make sense. It doesn't help the balance sheet anyway. If you invest in the right people, the right people build the right culture. The right culture will build the right ideas.

So I've always invested, and I learned this early on, not just from the military, but from people who really mentored me early on that people were the most important asset.

In the military, there's a saying, humans are more important than hardware. It all comes down to whoever's behind and running that platform or system in any business. That is your most important asset. So those are two things that I always try and just make every decision based on, including also just trying to remove emotions from conversations.

I also many times when I write about stock, certain companies, I'll put right at the bottom. I've never bought, sold, a single share of stock in this company ever.

Because it's interesting how many people then want to come and argue with me and then I ask, you own the stock? And they're like, yeah. Okay, well, you've lost money on it. Naturally, you're upset. I get that. But that changes how you think or write about companies when you have a, what I would call a conflict of interest. So I stay away from that completely.

Rena Sherbill: Appreciate that. Dan, where can people find your content?

Dan Rayburn: The best way is really on LinkedIn. So I push up a lot of content to LinkedIn, maybe in some weeks, even as 30 posts, especially during earnings. A lot of the information I get that the companies do allow me to push out. It's not enough to turn it into an entire blog post, but I put it up in little snippets on, on LinkedIn. So I would say following me on LinkedIn is one.

Second, DanRayburnPodcast.com. I'm breaking down every week the news you need to know in the streaming space. No fluff, no nonsense. Nobody wants to know what my favorite sports team is or what restaurant I at. It's incredible.

All these podcasts in my industry, they spend 20 minutes talking about things that nobody wants to hear about. I read a thousand headlines a day, so you don't have to. I'm taking all those headlines and figuring out what is the most important information you need to know to make the right decision. I'm condensing that to 30 minutes into a podcast. No fluff.

No AI sourcing. AI doesn't source anything for me. I don't use any AI tools when I write. So I would say the podcast, LinkedIn, my blog at Streamingmediablog.com has more longer form articles. But then just Google. If you just Google Dan Rayburn and then put in say Super Bowl, that'll take you to a post where, okay, here's 15 years worth of data from the Super Bowl.

Same with World Cup. If you go to WorldCupstreaming.com, you're going to see in 2022 when the last World Cup took place, here's the viewership across Fox, which was only 1.28 million. Here's the viewership when compared to TV around the world. So you could also just put my name to Google, type in a topic after that, Paramount, Netflix, Warner Bros. You'll get a lot more content as well.

Rena Sherbill: Appreciate it, Dan. Thanks for being a real one. Appreciate these conversations. Thanks for always giving us so much. Thanks for your time and generosity and talk to you soon, hopefully.

Dan Rayburn: Thank you, appreciate you having me on.