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WWE Network finally happening


flyonthewall2983

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  Bix said:
  mookeighana said:
  Bix said:
  JNLister said:

I hope somebody clues WWE into the PS3 browser having outdated Flash support which the user can't update.

If there's no PS3 app I'd be shocked.

 

They just got online with PS3 for WWE PPVs in Q3 this year, so it would seem natural that supporting that console would be part of the roll-out plan.

 

That's actually via a Sony app (Live Events Viewer), though the PS3 is one of the devices WWE absolutely needs to develop for to make the network work.

 

Annoyingly that's not on Playstation Network outside North America. Got to assume WWE will be gung ho about rolling this out internationally as that may make a significant difference to the chances of this being profitable.

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On last night's Observer Radio, Dave mentioned that about 3% of WWE's and UFC's PPV buys are bought online, with the other 97% coming from cable and satellite providers. That suggests that people would rather not watch the PPVs online if it isn't necessary.

 

That makes me wonder about the number of subscribers the network will get at first. If it turns out that people have to subscribe for six months in order to watch WrestleMania on the network, will they be willing to sign up for the price? Yes, it's cheaper than watching it in HD, and there will be a ton of "free" content (including all of the PPVs up to SummerSlam), but is there a lot of people that value that content, and will they be willing to go online to watch it?

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  David said:

On last night's Observer Radio, Dave mentioned that about 3% of WWE's and UFC's PPV buys are bought online, with the other 97% coming from cable and satellite providers. That suggests that people would rather not watch the PPVs online if it isn't necessary.

 

That makes me wonder about the number of subscribers the network will get at first. If it turns out that people have to subscribe for six months in order to watch WrestleMania on the network, will they be willing to sign up for the price? Yes, it's cheaper than watching it in HD, and there will be a ton of "free" content (including all of the PPVs up to SummerSlam), but is there a lot of people that value that content, and will they be willing to go online to watch it?

There's no reason the streams for new content wouldn't be in HD.

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  Migs said:
  David said:

On last night's Observer Radio, Dave mentioned that about 3% of WWE's and UFC's PPV buys are bought online, with the other 97% coming from cable and satellite providers. That suggests that people would rather not watch the PPVs online if it isn't necessary.

 

That makes me wonder about the number of subscribers the network will get at first. If it turns out that people have to subscribe for six months in order to watch WrestleMania on the network, will they be willing to sign up for the price? Yes, it's cheaper than watching it in HD, and there will be a ton of "free" content (including all of the PPVs up to SummerSlam), but is there a lot of people that value that content, and will they be willing to go online to watch it?

There's no reason the streams for new content wouldn't be in HD.

 

I meant to say that it will be cheaper to watch Mania online through the network (with the option to watch it in HD) than paying $70 to watch it in HD through cable or satellite.

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  Kevin Ridge said:
  Bix said:
  Kevin Ridge said:

I'm going to have to figure out to hook my TV up to the internet finally as still can't watch more than a match or so on my computer. Can't imagine watching 3 or 4 hour shows. I'll probably give this a shot especially if they open the archives though I hope stuff doesn't expire within a certain time frame like 24/7 and On Demand where I may not get around to watching something in time.

You understand that's not what you'd have to do, right? Get a Chromecast or Roku or use a game console.

 

Never heard of those first two things but I do have a PS3. I don't have a wireless set up though or a router. So, I'd still need to research and figure out what is best option.

 

Just pick up a wireless router and you'll be good to go, no matter if your device is a PS3 or something else.
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  David said:

On last night's Observer Radio, Dave mentioned that about 3% of WWE's and UFC's PPV buys are bought online, with the other 97% coming from cable and satellite providers. That suggests that people would rather not watch the PPVs online if it isn't necessary.

 

That makes me wonder about the number of subscribers the network will get at first. If it turns out that people have to subscribe for six months in order to watch WrestleMania on the network, will they be willing to sign up for the price? Yes, it's cheaper than watching it in HD, and there will be a ton of "free" content (including all of the PPVs up to SummerSlam), but is there a lot of people that value that content, and will they be willing to go online to watch it?

I thought Bix had a great counterargument that he posted over on the Wrestling Observer board in the thread about this radio show (link to WO msg board).

 

Hopefully he won't mind if I quote him:

 

  \ said:

I don't think Dave understands the online video market well enough if he thinks WWE and UFC's internet PPV buys have any real relevance to how an internet-only WWE Network will do. WWE and UFC's internet PPV numbers in the current marketplace have absolutely nothing to do with how well an internet-only WWE network will do.

 

The contracts with the cable/satellite companies (and how are they getting around that by including the PPVs on the network, anyway?) require them to charge to same price as they do for traditional PPV. If someone has cable/satellite service, then the traditional PPV is easier to get and you can record it with a DVR when you can't do that to the online PPV. Right now, for WWE, online PPV is exclusively for cord cutter fans who want to legitimately buy the major PPVs/see them in HD and a handful of other outliers, like people who are traveling/in hotels/whatever during PPVs.

 

UFC may get some fans who have cable/satellite because they offer the big customized experience with the switchable camera angles, multiple audio tracks including from the corners, etc. Still, that's only available in web browsers that support Flash. The version on Roku, XBox 360, etc. is just the straight up broadcast PPV. Device support for the PPVs right now is also not nearly as good as it will be (should be?) for the network. WWE and UFC just have presences on game consoles plus UFC's Roku channel.

 

The WWE Network will likely be on all connected game consoles, Roku, Apple TV, and Google's Chromecast, as those are the big players you need at this point. It wouldn't shock me if it's also on Sony's connected Blu-Ray players and TVs, Samsung's Smart TV's, Western Digital's WDTV boxes, etc. They need to take Netflix's plan of making support as much of a ubiquitous checkbox for it to work. Right now it's an afterthought, but it's not necessarily a problem for the regular PPVs.

 

Why? The reason nobody buys the online versions of the UFC and WWE PPVs is that right now, the market for them is almost 100% people without cable/satellite service. These are people who either dropped it or younger people who never picked it up when they moved out on their own because it's too expensive. The PPV costs about half the price of a month of mixed TV/internet/phone service at the "triple play" promotional prices $90 to $110) for new subscribers. The new network will, at $9.95, in the standard range for similar services, have WWE PPVs in HD for 72.9% off the current $54.95 price before you even factor in the additional content.

I do concur with Bix -- the internet-only #s for WWE/UFC are not relevantly going to predict the success of the WWE Network.

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My instinct is that a WWE online network would fail big time. Having said that, there is proof with the likes of Netflix that this type of presentation can work, especially for people with smart televisions and consoles. Nobody is going to pay big money to watch wrestling all day on their laptop, but if it is all wired up to their television anyway then what is the difference between that and a traditional channel, especially with the uniformly great broadband speeds these days.

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  Lust Hogan said:

Quick question: I have been reading that the price point will be $10 - $12 per month. Is that too high considering Netflix and Hulu are $7.99 per month? Should that price point be compared to a different online streaming service? Just curious.....

I really don't think so. I honestly believe you're competing against purchasing Wrestling Content (i.e. PPVs and DVD/BluRays) through traditional channels of Cable/Satellite or Stores. $9.99 is a steal -- I spend that on lunch regularly.

You're not really offering the same thing as Hulu or Netflix -- you're selling wrestling matches and wrestling TV shows. Yes, there are some wrestling documentaries on Netflix, but if that was what WWE was really banking on, this network is going to be nothing more than Classics on Demand v2.0. Instead, they're trying to offer something bigger - new content (mainly PPVs, but also the historical archives) and now there is the added lure of on-demand old content (if that really pans out).

 

I love the idea of 6 months @ $10 = $60 up-front in a package that includes Wrestlemania.

Grabbing a huge upfront group prevents a massive drop-off following their one mega-event (though the subscription #s might look terrible come Survivor Series 2014), it gives them more time to keep a large base of people to experiment with for several months and it still offers a value to the consumer (deliver many PPVs and other goodies in HD for less than one single mega-PPV). Honestly, I think they could get away with a higher price like $15 (it's a niche product and that lowers the # of subscribers they have to snag to break-even), but I believe they see the $10 mark online as an artificial price ceiling so it seems unlikely they'll do that.

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  mookeighana said:

I love the idea of 6 months @ $10 = $60 up-front in a package that includes Wrestlemania.

Grabbing a huge upfront group prevents a massive drop-off following their one mega-event (though the subscription #s might look terrible come Survivor Series 2014), it gives them more time to keep a large base of people to experiment with for several months and it still offers a value to the consumer (deliver many PPVs and other goodies in HD for less than one single mega-PPV). Honestly, I think they could get away with a higher price like $15 (it's a niche product and that lowers the # of subscribers they have to snag to break-even), but I believe they see the $10 mark online as an artificial price ceiling so it seems unlikely they'll do that.

I think they're smart to leave it at $10 - while I could certainly afford the $15, $10 makes it a lot easier for people on the border to keep it. I think it's a likely mental cut off between "Eh, whatever, its only $10" and "Do I really need to spend $15 a month on wrestling?"

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  Matt D said:

We should start a pool about how successful or not this will be.

I just don't see where it's going to pull in fans aside from the Netflix crowd(Well done on that explanation, Bix) or international viewers(who will get blacked out anyway). I think the people who don't pay for it are going to continue to do so and I think the usual people who buy it are going to also continue to do so. Honestly, this whole thing feels like they are trying to undercut themselves.

 

People don't mention it either but you have to factor in the economy these days. There's hardly a bright outlook for most of America right now and people are finding it really easy to cut out media. Obviously this will be cheaper than the current PPV model, but I don't think people are looking to add any more unnecessary monthly bills. I really also have no idea how anyone with a job and kids could possibly ever find time these days to watch shows.

 

The only real pro that I see here is that it should be pretty cheap for them to pull off. They just need to pay for the set up and the server bills.

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  anarchistxx said:

My instinct is that a WWE online network would fail big time. Having said that, there is proof with the likes of Netflix that this type of presentation can work, especially for people with smart televisions and consoles. Nobody is going to pay big money to watch wrestling all day on their laptop, but if it is all wired up to their television anyway then what is the difference between that and a traditional channel, especially with the uniformly great broadband speeds these days.

Can we please, please stop pretending this is a thing? They're working with MLB Advanced Media. MLB.TV is on almost every connected device that matters: http://mlb.mlb.com/mlb/subscriptions/index...ts&c_id=mlb

 

Plus, as long as they have at least one supported device, anyone who is already planning on buying WrestleMania would be dumb to not buy the WWE Network launch bundle. For the standard definition WrestleMania price, you get WrestleMania in HD and several months' worth of subsequent PPVs. Don't have a supported device? Get a Roku LT for halfway between the SD and HD price for the other PPVs and you get months worth of PPVs. That's before you even factor in the other content and who it appeals to. They will HAMMER this into everyone's heads. These are people who air a segment about how to download their smartphone/tablet app on every show.

 

If what we're hearing is accurate, the network bombing would have nothing to do with a lack of effort on WWE's part.

 

The biggest question mark is that they're trying to rope in older fans who the archival content would appeal to and/or who just watch the shows around WM each year. Do they have game consoles or other potentially supported devices?

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  rzombie1988 said:
  Matt D said:

We should start a pool about how successful or not this will be.

I just don't see where it's going to pull in fans aside from the Netflix crowd(Well done on that explanation, Bix) or international viewers(who will get blacked out anyway). I think the people who don't pay for it are going to continue to do so and I think the usual people who buy it are going to also continue to do so. Honestly, this whole thing feels like they are trying to undercut themselves.

 

People don't mention it either but you have to factor in the economy these days. There's hardly a bright outlook for most of America right now and people are finding it really easy to cut out media. Obviously this will be cheaper than the current PPV model, but I don't think people are looking to add any more unnecessary monthly bills. I really also have no idea how anyone with a job and kids could possibly ever find time these days to watch shows.

 

The only real pro that I see here is that it should be pretty cheap for them to pull off. They just need to pay for the set up and the server bills.

 

I disagree, because while all of the historic PPV prices say otherwise, there was a very real sense of "no mas" when they started with the current pricing scheme. The results of that extensive survey Bryan Alvarez did in F4W a few years ago was heavy on this:

 

"Many people noted the WWE price increase as a major deterrent. It was noted that paying $44.95 or $54.95 for WrestleMania or even Royal Rumble could be justified, but paying that for pretty much any other B-show was out of the question (and for the record, based on responses a B-show is now anything outside Royal Rumble or WrestleMania, with a few people adding SummerSlam and No Way Out). Nearly everyone, to a person, suggested a tiered pricing structure, where the current prices would be in effect for Mania and maybe Rumble, and all other shows would be priced significantly lower."

 

Granted, as hardcore fans they'd be more likely to buy the PPVs anyway, but I think it's a legitimate issue. When the pricing flew past DVDs, Blu-Rays, etc. and entered new release video game territory, it ceased being anything resembling value for your money.

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I hook up my laptop to the TV with a HDMI cable if I want to watch something off of it, generally. That said, we just cancelled our premium channels that we only got because it was basically free due to a gift card from Verizon two years ago, just to save $15 a month. I don't think we spend much of anything for "entertainment" on a monthly level past cable. Granted, we use my father-in-law's netflix occasionally and visit the redbox maybe once a month. I'm not sure how many people in our boat. When I was in college I would have jumped at $10 a month though.

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"The contracts with the cable/satellite companies (and how are they getting around that by including the PPVs on the network, anyway?) require them to charge to same price as they do for traditional PPV."

 

I've never heard of this rule. Could you please provide me a source for it, Bix?

 

Also, isn't it fair to say that it's more difficult to get a million subscribers through a streaming service than it is for a premium channel? I know that it doesn't matter for the people on this forum, but online streaming will be less familiar to the general fanbase, since people still tend to watch content through cable or satellite (there was a study that came out a few months ago that showed this was the case, but I can't find it for some reason).

 

Also, for what it's worth, according to Michael Weitz, the reason why the PPVs aren't priced at $15 is because they don't believe there would be enough buys to get the same amount of revenue.

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  David said:

"The contracts with the cable/satellite companies (and how are they getting around that by including the PPVs on the network, anyway?) require them to charge to same price as they do for traditional PPV."

 

I've never heard of this rule. Could you please provide me a source for it, Bix?

 

Also, isn't it fair to say that it's more difficult to get a million subscribers through a streaming service than it is for a premium channel? I know that it doesn't matter for the people on this forum, but online streaming will be less familiar to the general fanbase, since people still tend to watch content through cable or satellite (there was a study that came out a few months ago that showed this was the case, but I can't find it for some reason).

 

Also, for what it's worth, according to Michael Weitz, the reason why the PPVs aren't priced at $15 is because they don't believe there would be enough buys to get the same amount of revenue.

WWE would LOVE to try charging less online. At $30 they'd net more than they would on cable/satellite. It's their contracts that force them into charging the cable/satellite price online. Again, nobody has explained how the WWE Network gets around this. There can be other terms, like how UFC PPV fights are restricted to PPV replays for 60 days normally (UFC got this waived so they could show Jones-Gustafsson on FS1).

 

Regardless of what's been said before, they are going to effectively be charging $10 for PPVs now.

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  David said:

Was the "charge the same price online" stipulation added recently? I'd have to check archive.org, but I definitely remember the prices through wwe.com being lower than the cable/satellite prices years ago.

It was lower in the early years, yes. It's been the same for a long time, going back to before the quality was comparable.
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  Quote

Also, isn't it fair to say that it's more difficult to get a million subscribers through a streaming service than it is for a premium channel?

Within a single market, absolutely. However, that difficulty isn't as severe if going online means you can take it worldwide rather than be restricted to the US or North America until you work out country-by-country cable deals.

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  JNLister said:
  Quote

Also, isn't it fair to say that it's more difficult to get a million subscribers through a streaming service than it is for a premium channel?

Within a single market, absolutely. However, that difficulty isn't as severe if going online means you can take it worldwide rather than be restricted to the US or North America until you work out country-by-country cable deals.

 

Very true, though I can see them having trouble with enabling worldwide access, due to their current international deals.

 

 

 

Yesterday, George Barrios spoke at the UBS 41st Annual Global Media and Communications Conference (http://seekingalpha.com/article/1890451-world-wrestling-entertainments-management-presents-at-ubs-41st-annual-global-media-and-communications-conference-transcript?part=single). He essentially stated the WWE Network will be over-the-top (though he declined to confirm it):

 

"We’ve been working with the MVPDs, the same pitch I just gave you here, let's transform the pay-per-view business together, grow the business for both of us. Quite frankly it's been a bit of a slog, having those discussions but we continue to have them.

 

One of the things that happened over the last 12 months has been happening for quite a while and we have been monitoring it for quite a while, is the consumption of long form video over-the-top and we all have Netflix to thank for this. They have done the spade work of creating the environment and the consumption habit of consumers to watch long form video over-the-top. So this, earlier this year we said where two years ago we didn't think there was enough of that happening to make a network viable over-the-top, we now believe it is viable over-the-top.

 

We continue to work with the MVPDs, see if we can knockout a deal in traditional distribution. If not, we have that option which fundamentally is unilateral. We could do it at our own discretion."

 

And while WWE will get all of the revenue instead of a cut of it, they expect their costs to be higher under an over-the-top network (though Barrios believes the economics will end up being the same as a premium channel):

 

"Run rate today is probably close to 15 million. So we haven't done 15 million in any one year, but if you look at where we are today and extrapolate it you'd say about 15 million. I'd say there is one other slug of costs that is similar whether it's traditional or over-the-top and that's marketing dollars and that's a big part of -- I mean obviously we are not going to have the cost of acquisition like Netflix and HBO because they are an accumulation of brands and content that they have to market. We have a brand and we have a powerful platform to market.

 

So we are not going to do that kind of customer acquisition cost but we are going to have to do some third party costs and it won't be insignificant. So that's -- that will come once a launch date is established and then announced.

 

And then the other part of the costs stack really depends on whether you do traditional or over-the-top. If you go over-the-top you have significantly more costs, you have to do things like CDN costs, credit card fees, customer service. If you go traditional that essentially is covered up in the split that you are paying the MVPDs. What I would say is all those costs, in either model that I described are embedded in that $50 million to $150 million incremental OIBDA that's up there."

 

100% of the revenue, 100% of the problems.

 

 

On a side note, I thought this was pretty amusing:

 

"What I will say is I have not understood and still do not understand why the pay-per-view transition to a subscription service delivered by the MVPDs did not make sense, I still don't understand it."

 

WWE has a vision for something, and outside companies won't go along with it. Isn't that essentially what happens whenever they've tried to rebrand themselves or get others to agree with their viewpoints?

 

(Thanks to Chris for the link.)

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  David said:
  JNLister said:
  Quote

Also, isn't it fair to say that it's more difficult to get a million subscribers through a streaming service than it is for a premium channel?

Within a single market, absolutely. However, that difficulty isn't as severe if going online means you can take it worldwide rather than be restricted to the US or North America until you work out country-by-country cable deals.

 

Very true, though I can see them having trouble with enabling worldwide access, due to their current international deals.

 

Yesterday, George Barrios spoke at the UBS 41st Annual Global Media and Communications Conference (http://seekingalpha.com/article/1890451-world-wrestling-entertainments-management-presents-at-ubs-41st-annual-global-media-and-communications-conference-transcript?part=single). He essentially stated the WWE Network will be over-the-top (though he declined to confirm it):

 

"We’ve been working with the MVPDs, the same pitch I just gave you here, let's transform the pay-per-view business together, grow the business for both of us. Quite frankly it's been a bit of a slog, having those discussions but we continue to have them.

 

One of the things that happened over the last 12 months has been happening for quite a while and we have been monitoring it for quite a while, is the consumption of long form video over-the-top and we all have Netflix to thank for this. They have done the spade work of creating the environment and the consumption habit of consumers to watch long form video over-the-top. So this, earlier this year we said where two years ago we didn't think there was enough of that happening to make a network viable over-the-top, we now believe it is viable over-the-top.

 

We continue to work with the MVPDs, see if we can knockout a deal in traditional distribution. If not, we have that option which fundamentally is unilateral. We could do it at our own discretion."

 

And while WWE will get all of the revenue instead of a cut of it, they expect their costs to be higher under an over-the-top network (though Barrios believes the economics will end up being the same as a premium channel):

 

"Run rate today is probably close to 15 million. So we haven't done 15 million in any one year, but if you look at where we are today and extrapolate it you'd say about 15 million. I'd say there is one other slug of costs that is similar whether it's traditional or over-the-top and that's marketing dollars and that's a big part of -- I mean obviously we are not going to have the cost of acquisition like Netflix and HBO because they are an accumulation of brands and content that they have to market. We have a brand and we have a powerful platform to market

 

So we are not going to do that kind of customer acquisition cost but we are going to have to do some third party costs and it won't be insignificant. So that's -- that will come once a launch date is established and then announced.

 

And then the other part of the costs stack really depends on whether you do traditional or over-the-top. If you go over-the-top you have significantly more costs, you have to do things like CDN costs, credit card fees, customer service. If you go traditional that essentially is covered up in the split that you are paying the MVPDs. What I would say is all those costs, in either model that I described are embedded in that $50 million to $150 million incremental OIBDA that's up there."

 

100% of the revenue, 100% of the problems.

 

On a side note, I thought this was pretty amusing:

 

"What I will say is I have not understood and still do not understand why the pay-per-view transition to a subscription service delivered by the MVPDs did not make sense, I still don't understand it."

 

WWE has a vision for something, and outside companies won't go along with it. Isn't that essentially what happens whenever they've tried to rebrand themselves or get others to agree with their viewpoints?

 

(Thanks to Chris for the link.)

 

I wrote up a longer analysis of the presentation on my blog: http://indeedwrestling.blogspot.com/2013/1...-financial.html

 

David hit the high-points regarding the WWE Network that were spoken. Only other thing I learned was that WWE invested in Hero Ventures (probably because WWE BOD Basil DeVito is on their board).

 

Also, I found a nice Nielsen summary of how people are watching "over-the-top" video:

 

How do people watch streaming services?

* Directly on a computer (48% of Netflix users, 61% Hulu Plus users - increases from last year)

* On Mobile Phone (11% of Netflix users, 10% of Hulu Plus users - large drop from last year)

* Wii (26% of Netflix users, 12% of Hulu Plus users)

* Internet-Enabled TV (12% of Netflix users, 9% of Hulu Plus users - down from last year)

* Connecting Computer to TV (11% of Netflix users, 18% of Hulu Plus users)

* On PS3 (12% of Netflix users, 12% of Hulu Plus users)

* On iPad (5% of Netflix users, 12% of Hulu Plus users - down from last year)

* On other Tablet (6% of Netflix users, 7% of Hulu Plus users)

* Internet-connected BluRay Player (14% of Netflix users, 12% of Hulu Plus users)

* XBox Live (13% of Netflix users, 16% of Hulu Plus users)

* Roku Box (12% of Netflix users, 23% of Hulu Plus users)

Source: 2013 Nielsen "Over-the-Top Video Analysis"

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My own take, though Chris's is probably better. :)

 

Emailed and left a message for Nielsen's media relations department asking if they have non-overlapping "watches on a TV" and "watches on a mobile device" figures for Netflix/Hulu Plus to go along with their "watches directly on a computer" and more device specific figures listed in the article. Fingers crossed...

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