Streaming services asked the Illinois attorney general to weigh in on the constitutionality of the state's Cable and Video Competition Law, they told the U.S. District Court in East St. Louis in a notice of constitutional question Tuesday. East St. Louis sued, seeking franchise fees from the streamers under the CVCL. In the docket 3:21-cv-561 filing, the services said the city's proposed application of the CVCL violates the First Amendment by creating a prior restraint on speech and imposing an unconstitutionally excessive fee. Outside counsel for the city didn't comment.

Staggered releases of popular TV series could prop up the subscriber count at Netflix, Wedbush Securities analyst Michael Pachter wrote investors Monday, upgrading the stock to "outperform." The analyst believes Netflix will exceed guidance for Q2 due to the staggered release date for Ozark, and it believes the same approach for Stranger Things in Q3 could also reduce churn. “Netflix is positioned to grow,” as the subscription VOD service “gradually” raises prices and rolls out an ad-supported option, Pachter said; he doesn’t believe Netflix’s share price will approach 2021 levels “for many years.” Wedbush sees recent Netflix losses as the result of “deep saturation” in the U.S. and Canada. The company’s plans to crack down on password sharing -- which Netflix estimates at 30 million households in those two markets and 100 million globally -- will bring it a “few million new customers.” But its plan to offer an advertising-supported tier “has great potential to drive significant revenue,” he said. Raising prices in mature markets would allow Netflix to drive up its average revenue per user, and its level of profitability, allowing it to reinvest profits to continue growing in Latin America and Asia-Pacific, he said.

Reno's appeal of a lower court's rejection of its suit seeking franchise fees from Hulu and Netflix (see 2202080088) could go to oral argument in San Francisco the week of Aug. 29 or Sept. 19, the 9th U.S. Circuit Court of Appeals said in a docket 21-16560 docket notation Friday.

The Redbox Entertainment “legacy business” of 38,000 DVD-rental kiosks “still has tremendous reach and power for consumers looking for the ultimate value,” said CEO Galen Smith, appearing on Thursday’s Q1 earnings call of Chicken Soup for the Soul Entertainment to discuss its proposed $375 million Redbox buy (see 2205110051). Redbox has been “investing heavily” in recent years to transform the company into a “multi-window multifaceted digital entertainment company,” said Smith. But COVID-19 “severely impacted” the Redbox kiosk business when it forced studios to release content on streaming platforms or delay movies “completely outright,” he said. The expected recovery has taken “longer than we expected,” and has “hampered our ability to invest in the digital transformation,” he said. “Joining forces” with CSSE will give Redbox “much needed scale,” plus access to capital, to “power” the digital transformation, “something we couldn’t do on our own,” he said.

Google withdrew its UHD Alliance membership, as did human interface components supplier Synaptics and Chinese semiconductor maker Beijing Eswin Computing Technology, the association told DOJ and the FTC in simultaneous “written notifications” March 21, says a notice for Friday’s Federal Register. UHDA membership "remains open," and the association "intends to file additional written notifications disclosing all changes," said Suzanne Morris, chief-premerger and division statistics in DOJ’s Antitrust Division. The notifications are required to extend UHDA members antitrust protections under the 1993 National Cooperative Research and Production Act, said Morris.

YouTube's subscription VOD service YouTube TV is adding a pair of Spanish-language packages, Spanish Plan and Spanish Plus, it blogged Tuesday. The $35/month Spanish Plan has more than two dozen Spanish language channels and doesn't require subscription to the YouTube TV base plan. The $15/month Spanish Plus add-on to the base plan also features close to two dozen Spanish language channels.

Chicken Soup for the Soul Entertainment, owner of the Crackle video streaming service, agreed to buy Redbox Entertainment in a deal designed around scale, said the companies Wednesday. The combination will create an “independent, integrated direct-to-consumer media platform delivering premium entertainment for value conscious consumers,” they said. The combined company will have Redbox’s 38,000-plus kiosks, digital capabilities in ad-based, transactional and premium video-on-demand and free, ad-supported streaming TV channels, plus access to a 40-million Redbox Perks member list. The companies will build a “fully developed AVOD and FAST streaming business: proven branded streaming services, formidable content and production capabilities, and a strong AVOD and FAST ad sales operation,” said Chicken Soup CEO William Rouhana. Redbox CEO Galen Smith said the purchase will “accelerate Redbox’s transition from a physical to high growth digital media company.” Ad spending on connected TV platforms grew 57% from 2020 to 2021 and is expected to grow another 39% this year, they said, citing Interactive Advertising Bureau figures. The deal, valued at $375 million, includes $50 million in Chicken Soup stock and the assumption of $325 million in Redbox debt. Upon closing, expected in the second half, Chicken Soup for the Soul stockholders will own about 76.5% of the combined company, Redbox stockholders 23.5%, they said.

AMC Entertainment won’t stop trying to "convince" some of the major streaming services to introduce their movies theatrically, said CEO Adam Aron on a Q1 earnings call Monday. “We have had conversations over the years with Netflix, Amazon and Apple,” he said. “We continue to make it very clear that we would be very pleased to show some of their bigger, better movies. But in doing so, we have to respect our long-standing industry partners, the major studios. We can't have one set of rules for the major studios and a separate set of rules for streamers.” The $187.4 million domestic opening last weekend of Disney's Doctor Strange in the Multiverse of Madness is proof “all those who doubted the consumer appeal of movie theaters” were wrong, said Aron. “We can say to our shareholders with some glee and delight that the resilience of movie theaters is right now on clear display and that the future of the cinema is bright,” he said. Some on Wall Street and in the media “have been filling our heads for two years now about the rise of streaming and the corresponding end of theaters,” he said. “This won't be the first time or the last time that conventional wisdom will be proven to be filled with so much folly.”

After two years of COVID-19 impact, artist services and expanded-rights revenue increased 19.5% at Warner Music Group in fiscal Q2 2022, reflecting increases in merchandising and concert promotion revenue, said the company’s Tuesday earnings report. Performance revenue rose 9% “as bars, restaurants, concerts and live events continue to recover from COVID disruption,” said Chief Financial Officer Eric Levin on the company's earnings call. Streaming revenue from emerging platforms grew to $345 million for the quarter ended March 31; digital revenue, 70.1% of the company’s total recorded music revenue, was $931 million, up 8%; physical revenue grew 3.4% on “increasing demand for vinyl,” said CEO Steve Cooper. The music company continued international expansion, acquiring Qanawat Music, a distributor in the Middle East/North Africa market, expanding WMG’s presence in Dubai, Cairo and Casablanca, it said. It also partnered with Bollywood artists in India, where it grew share over the past 24 months, Cooper said. He positioned WMG at the “intersection of gaming, social and entertainment" with brands including Roblox, Fortnite and The Sandbox. An area of incremental revenue is digital fitness: WMG was the music launch partner for Peloton’s gaming-inspired fitness experience, Lanebreak, Cooper said. The company continues to build its presence in podcasting, launching in April Interval Presents, an in-house podcast network covering music, pop culture and social impact. WMG expects music to remain “resilient” amid macroeconomic challenges, Levin said. In video streaming, people generally subscribe to multiple services, he said, vs. audio where they generally subscribe to one service with their music aggregated in one place. Levin called digital music a very “fairly priced, if not even low-priced, high-value service that's central to people's lives.” Shares hit a 52-week low Tuesday at $25.35 before closing 5.46% down at $25.78.

Advertising and affiliate revenue growth led to an overall 7% year-over-year revenue jump at Fox Corp. to $3.46 billion, it announced Tuesday in its latest quarterly results. CEO Lachlan Murdoch said in a call with analysts cable advertising was up 20%, driven by Fox News' increased ratings, while streaming service Tubi drove a 6% TV ad growth. He said the subscription base for the Fox Nation streaming service had more than tripled over the past 18 months and retention rates were above industry averages.