Disney, WarnerMedia and NBCU are working to balance the value of cable and streaming

Sunisa Lee (Friday) of the United States celebrates her son’s podium at the medal ceremony of the Tokyo 2020 Olympic Gymnastics Women’s Comprehensive Final held at the Ariake Gymnastics Center in Tokyo on July 29, 2021.

Lionel Biona Venture | AFP | Getty Images

If last year’s biggest corporate media challenge was the launch of subscription streaming services, this year’s unified dilemma is to figure out what to apply to them.

Tensions between streaming video, theatrical releases, and how to balance linear TV have led to some unique choices that must confuse consumers with what is becoming an increasingly confusing landscape. ..

“The challenge that all these companies are addressing-the core issue-is what content goes where, who decides, and why,” said Rich Greenfield, media analyst at LightShed Partners. increase.

Programming decisions will ultimately reform the way the public consumes media. So far, most media companies have sold streaming video as a complement to traditional pay-TV. That’s why so many products are named with the “plus” suffix — Disney+, Viacom CBSParamount +, discover+ Etc.

In the long run, each streaming platform could be home to all the programs of a media company. The “plus” is essentially stripped off. ESPN + can be an ESPN with everything ESPN offers.

But the world isn’t there yet. The results are also increasingly confusing to consumers, as new shows are created specifically for streaming services and the best linear TVs don’t show up in streaming.

Streaming labyrinth

For the Script TV series, media executives have primarily decided that streaming services will be home to the highest quality original programming. Disney, AT & TWarnerMedia, ComcastNBCUniversal and ViacomCBS are all trying to convince Wall Street that they can grow beyond traditional cable TV. They are using new hit shows such as The Mandalorian, Easttown Mare, and Yellowstone as bait to seduce subscribers.result Varies for each serviceHowever, all major new subscription products are growing by millions of customers each quarter.

In the case of movies, there are disagreements at the movie-by-movie level among the different services. Disney released the Pixar movies “Soul” and “Luka” directly to Disney + at no additional charge at the time of release. For Jungle Cruise, Black Widow, and Raya and the Last Dragon, the company decided to spend an additional $ 30 on streaming the movie to its users before finally making it free with a subscription. NBCUniversal has placed “The Boss Baby: Family Business” in the paid “Peacock”, but has released “F9” only in theaters. WarnerMedia has decided to place the entire 2021 movie slate directly on HBO Max, The 2022 blockbuster movie won’t do that.

For news and sports, most media companies broadcast their most valuable programming exclusively on traditional cable television. The most watched prime-time shows on CNN, MSNBC and ESPN are locked within the cable bundle.This allowed executives to oppose Steady but still overwhelming surge in pay TV cancellationsSurvive a highly profitable business that brings billions of dollars each year.

Overload of choices

NBCUniversal is tackling the challenge of delivering valuable programming when broadcasting the Olympic Games. Executives broadcast live and pre-recorded events on NBC’s broadcast channels, NBC’s cable network, NBC’s certified apps for cable subscribers, NBC’s free apps, Peacock’s free slots, and Peacock’s paid slots. You can choose to do it.

Various options Leading to a complex ecosystem NBCUniversal is trying to reach several goals at once. The company promotes Peacock subscriptions, soothes pay-TV distributors who have agreed to a long-standing price increase because they received their own content, and is expensive to attach commercials to exclusive live shows. I want to maintain a good TV advertising fee.

“This is the actual dilemma of innovators,” said one veteran broadcast television executive. “We know that the world of linear TV is collapsing, but we’re trying to stay on the Titanic for as long as possible. At the same time, we’re installing a digitally streaming lifeboat.”

Make the numbers work

Disney is looking at a big business dilemma with “Monday Night Football” soon next year.The company has secured the right to stream the most watched cable series on ESPN + for many years. With a new television rights contract with the National Football League in March. However, Disney and ESPN haven’t said anything about when ESPN + will actually include “Monday Night Football.”

ESPN By far the most expensive network on cable TV.. It gained that distinction by being the only way Americans could see “Monday Night Football” and other popular sporting events. If Disney begins migrating its former exclusive show from ESPN to ESPN +, pay-TV distributors will boost future price increases and millions of consumers will be given another reason to cancel cable TV. increase.

Mathematics makes this calculus tricky. After August 13th, Disney will charge ESPN + $ 6.99 per month After the recent price increase. However, Disney earns over $ 9 per month on ESPN’s cable subscribers. according to Kagan, S & P Global’s Media Research Division, pays for pay-TV distribution.When bundled with other ESPN networks, Disney Channel and ABC, Disney Over $ 16 per month.

In other words, Disney loses over $ 16 per month for every customer who cancels a cable. Further billing must begin for streaming products to reach the break-even point. It does not take into account the loss of advertising associated with linear programming, which puts pressure on the revenue of digital video advertising.

“No one is ready to overtake a linear ecosystem because it brings so much cash,” Greenfield said. “Therefore, they all balance the way they manage legacy assets with future investments where free cash flow is negative, showing that they are all trying on Wall Street. They are all tight. I’m walking on a tight rope. “

News program decision

NBCUniversal and WarnerMedia announced this month that they will hire hundreds of new employees to enhance their streaming news services.

Media companies are taking a different strategy than simply duplicating MSNBC, CNBC, and CNN shows on Peacock and HBO Max. CNN is building a subscription news service, CNN +.. Andrew Morse, CNN Chief Digital Officer, said He plans to hire 450 people to develop and sell new series and news programs.. Cesar Conde, chairman of NBCUniversal NewsGroup, has announced plans to hire nearly 200 new employees across the newsbrand. NBC News Now, The company’s flagship streaming network.

The decision to create a separate show for streaming, some of which may duplicate the content already broadcast on Linear TV, can be viewed in a variety of ways.

Skeptically, it can be seen as a redundant resource waste as a “moment of time” decision to maintain monopoly on cable bundles that may disappear in a few years. ..

But NBC News executives say the investment admits that streaming viewers are not the same as linear viewers. That should lead to programming decisions that recognize that digital viewers tend to be young and diverse.

“We are always thinking about ways to optimize the journalism of each delivery platform,” said Noah Oppenheim, president of NBC News. “How do you attract these new viewers? Answers can lead to different faces on the screen, different approaches to storytelling, different lenses in the world.”

It is unknown if there are actually viewers of the all-streaming news network. In particular, some viewers, like CNN +, which debuts in 2022, require consumers to pay a monthly subscription fee. As video news, the programming concept for young viewers is questionable. Broadcasting, whether streaming or traditional television It may not appeal to people under the age of 25. The decision to increase investment in streaming news may gradually reduce investment in broadcast or cable production if total revenues are declining.

Chris Belend, chief digital officer of NBC News, said he was confident that further investment in NBC Newsnow would be rewarded as he could already see the increase in time spent on existing products. It was released in 2019. NBC News Now is ad-backed, free for consumers.

“We’re very excited about how viewers spend millions of hours on NBC News NOW and how it continues to grow as they continue to invest,” Berend said. .. “That time is included for more than an hour for each visit on some platforms. [like YouTube]Clearly shows that viewers are satisfied on many platforms, each with its own demographic nuances. “

Disclosure: NBC Universal is CNBC’s parent company.

See: Comcast CEO Brian Roberts talks about revenue and streaming business

Disney, WarnerMedia and NBCU are working to balance the value of cable and streaming

Source link Disney, WarnerMedia and NBCU are working to balance the value of cable and streaming

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