Wed. Dec 25th, 2024

Warner Bros.  Discovery CFO on streaming prices: “Quality content has been given away well below fair market value”<!-- wp:html --><p><a href="https://whatsnew2day.com/">WhatsNew2Day - Latest News And Breaking Headlines</a></p> <div> <p class="paragraph larva // a-font-body-m "> </p><p> Retaining all content from entertainment giant Warner Bros. Discovery for its streaming service Max alone was “incomprehensible” and streaming prices would continue to rise because valuable content was “given away too cheaply” for too long, CFO Gunnar Wiedenfels told the Bank of America Securities Media, Communications and Entertainment Conference on Thursday. </p> <p class="paragraph larva // a-font-body-m "> </p><p> “For a decade, streaming has been giving away a hugely valuable amount of quality content well below fair market value, and I think this is currently being corrected,” he said. “We have seen price increases across virtually the entire league. We have increased prices, especially internationally, where many of the HBO Max launches have been very, very focused on the maximum possible subscriber count, and not necessarily on the maximum possible economic benefits of the launch.”</p> <p class="paragraph larva // a-font-body-m "> </p><p> Because he has COVID, the executive also said in a virtual session that the company is trying to use streaming pricing to reduce churn and get more consumers to commit to annual instead of monthly subscriptions, which could hurt WBD’s financial performance good thing comes. streaming company. He also highlighted the benefit of growth in advertising-based service levels.</p> <p class="paragraph larva // a-font-body-m "> </p><p> He also called the time since closing the mega-merger that created the company in April 2022 “the most intense 17 months of my career,” saying management has done a lot of work to streamline the company and prepare it for the future. “We are ready to seize the opportunities,” he promised. </p> <p class="paragraph larva // a-font-body-m "> </p><p> Among other things, Wiedenfels said the new sector giant has changed its culture to “a more cash-oriented mindset” and cited areas such as merchandising and consumer products, gaming and “franchise management” as key growth areas for the future. </p> <p class="paragraph larva // a-font-body-m "> </p><p> Content is still an asset, the CFO emphasizes. “As we bring together our back-office processes, our post-production processes, content management systems, etc., there will be very significant efficiency potential on the content side… without any impact on the quality of the creative and the opportunity on the creative side,” he pointed out.</p> <p class="paragraph larva // a-font-body-m "> </p><p> Asked about changes to the substantive decision-making process, he said that historically, content around different parts and regions of the business was often managed in isolation or in silos, but now the emphasis is on a coordinated and planned approach. “To really get the best value out of every piece of content we create, we have to use all those checkouts and all those windows, and we have to do that in a well-orchestrated and optimized way. And that starts with the content investment process.” </p> <p class="paragraph larva // a-font-body-m "> </p><p> He added: “There are certain projects that we have walked away from in the past because it was driven out of one individual unit, and it didn’t seem like it made much sense for that particular unit. We can now take that to the next level and look at these projects at a cross-WBD level, and there are many more monetization opportunities if you apply that broader lens.”</p> <p class="paragraph larva // a-font-body-m "> </p><p> Part of the decision-making is also about windowing, or “how do we put our content into those different monetization windows,” the CFO noted. “What types of content do we keep exclusively versus potentially selling to third parties?”</p> <p class="paragraph larva // a-font-body-m "> </p><p> When asked how WBD makes such licensing decisions, Wiedenfels said the company collects and looks at a lot of data, which gives it a good idea of ​​what consumers like and what works. “This whole idea of ​​storing content on Max, on a streaming platform, is incomprehensible in retrospect,” he said, because “a small percentage of titles really drive the vast majority of viewership and engagement,” meaning management teams must think about what to do. with other programming to properly monetize it. </p> <p class="paragraph larva // a-font-body-m "> </p><p> “Content needs oxygen to stay alive and vibrant,” he argued, noting that bringing programs to other outlets could revive interest in them on the company’s own platforms. </p> <p class="paragraph larva // a-font-body-m "> </p><p> Discussing the new Walt Disney-Charter Communications carriage deal, whose impact on the companies and broader industry analysts has been dissected, Wiedenfels said: “We have very, very strong and friendly relationships” with pay-TV distributors, arguing that the company was driving more value to partners than relative share of revenue. He added that in recent years, “agreements have been struck with all affiliates that essentially give premium cable subscribers authenticated access to what is now Max, a multi-billion dollar premium content offering that is incredibly valuable from a the consumer’s perspective.”</p> <p class="paragraph larva // a-font-body-m "> </p><p> Wiedenfels also called this year’s TV advertising season Thursday “a little more challenging” than in the past, but said he was happy with the company’s results. “I’m feeling really good going into the fourth quarter” and the next 12 months, he said. </p> <p class="paragraph larva // a-font-body-m "> </p><p> Asked about advertising trends in the fourth quarter, he said there were still “mixed signals” but that volume commitments were up ahead of time. “Cautiously optimistic,” he said when asked about his overall view on the prospects for the advertising market.</p> <p class="paragraph larva // a-font-body-m "> </p><p> Wiedenfels discussed the dual Hollywood strikes of writers and actors, calling them an “unfortunate situation” and saying “there is very, very little content production going on right now,” but adding, “We are confident that there will be a resolution . Once that happens, we will be ready to return to a normal production rhythm as quickly as possible.”</p> <p class="paragraph larva // a-font-body-m "> </p><p> Earlier this month, WBD cut its 2023 forecast before interest, taxes, depreciation and amortization (EBITDA) to $10.5 billion to $11.0 billion, a hit of $300 million to $500 million, “primarily due to the impact of the strikes ” from Hollywood. actors and writers. In a filing with regulators, the company — led by CEO David Zaslav, who was deeply involved in negotiations with Hollywood unions to end the work stoppage — did not indicate when it expects the strikes could begin. end.</p> <p class="paragraph larva // a-font-body-m "> </p><p> In its update, the conglomerate also raised its full-year free cash flow expectations to at least $5 billion and said it expects to “exceed $1.7 billion in free cash flow for the third quarter of 2023, partly due to the strong performance of <em>Barbie</em> as well as the increasing impact of strike-related factors.” </p> <p class="paragraph larva // a-font-body-m "> </p><p> Wiedenfels also discussed the possibilities of WBD intellectual property theme parks on Thursday. When asked if there was any opportunity to expand with Barbie World or similar offerings, he said, “The short answer is yes.” He highlighted that the company “just opened the Harry Potter making of studio tour in Tokyo in June this year and it is on fire.” The CFO added: “We have already achieved the milestone we set for the year in terms of visitor numbers. You currently have to wait months to get tickets. It was a phenomenal launch.” His conclusion on theme parks and similar opportunities: “We definitely want to do more in this area,” which will provide a good return on investment.</p> <p class="paragraph larva // a-font-body-m "> </p><p> Asked about potential asset sales including joint venture production company All3Media, the executive said there are “not a huge amount of dormant assets” within the company, but said the company was “exploring” a deal for the “fantastic” All3Media that was strong out there. interest in it. </p> <p class="paragraph larva // a-font-body-m "> </p><p> Overall, WBD approaches potential asset sales with “a purely rational mindset”, adding: “There may be other areas where we can look at some type of monetization and where we want to maintain control. So that makes things a little more complicated, but we are also looking at a number of things.”</p> </div> <p><a href="https://whatsnew2day.com/warner-bros-discovery-cfo-on-streaming-prices-quality-content-has-been-given-away-well-below-fair-market-value/">Warner Bros. Discovery CFO on streaming prices: “Quality content has been given away well below fair market value”</a></p><!-- /wp:html -->

WhatsNew2Day – Latest News And Breaking Headlines

Retaining all content from entertainment giant Warner Bros. Discovery for its streaming service Max alone was “incomprehensible” and streaming prices would continue to rise because valuable content was “given away too cheaply” for too long, CFO Gunnar Wiedenfels told the Bank of America Securities Media, Communications and Entertainment Conference on Thursday.

“For a decade, streaming has been giving away a hugely valuable amount of quality content well below fair market value, and I think this is currently being corrected,” he said. “We have seen price increases across virtually the entire league. We have increased prices, especially internationally, where many of the HBO Max launches have been very, very focused on the maximum possible subscriber count, and not necessarily on the maximum possible economic benefits of the launch.”

Because he has COVID, the executive also said in a virtual session that the company is trying to use streaming pricing to reduce churn and get more consumers to commit to annual instead of monthly subscriptions, which could hurt WBD’s financial performance good thing comes. streaming company. He also highlighted the benefit of growth in advertising-based service levels.

He also called the time since closing the mega-merger that created the company in April 2022 “the most intense 17 months of my career,” saying management has done a lot of work to streamline the company and prepare it for the future. “We are ready to seize the opportunities,” he promised.

Among other things, Wiedenfels said the new sector giant has changed its culture to “a more cash-oriented mindset” and cited areas such as merchandising and consumer products, gaming and “franchise management” as key growth areas for the future.

Content is still an asset, the CFO emphasizes. “As we bring together our back-office processes, our post-production processes, content management systems, etc., there will be very significant efficiency potential on the content side… without any impact on the quality of the creative and the opportunity on the creative side,” he pointed out.

Asked about changes to the substantive decision-making process, he said that historically, content around different parts and regions of the business was often managed in isolation or in silos, but now the emphasis is on a coordinated and planned approach. “To really get the best value out of every piece of content we create, we have to use all those checkouts and all those windows, and we have to do that in a well-orchestrated and optimized way. And that starts with the content investment process.”

He added: “There are certain projects that we have walked away from in the past because it was driven out of one individual unit, and it didn’t seem like it made much sense for that particular unit. We can now take that to the next level and look at these projects at a cross-WBD level, and there are many more monetization opportunities if you apply that broader lens.”

Part of the decision-making is also about windowing, or “how do we put our content into those different monetization windows,” the CFO noted. “What types of content do we keep exclusively versus potentially selling to third parties?”

When asked how WBD makes such licensing decisions, Wiedenfels said the company collects and looks at a lot of data, which gives it a good idea of ​​what consumers like and what works. “This whole idea of ​​storing content on Max, on a streaming platform, is incomprehensible in retrospect,” he said, because “a small percentage of titles really drive the vast majority of viewership and engagement,” meaning management teams must think about what to do. with other programming to properly monetize it.

“Content needs oxygen to stay alive and vibrant,” he argued, noting that bringing programs to other outlets could revive interest in them on the company’s own platforms.

Discussing the new Walt Disney-Charter Communications carriage deal, whose impact on the companies and broader industry analysts has been dissected, Wiedenfels said: “We have very, very strong and friendly relationships” with pay-TV distributors, arguing that the company was driving more value to partners than relative share of revenue. He added that in recent years, “agreements have been struck with all affiliates that essentially give premium cable subscribers authenticated access to what is now Max, a multi-billion dollar premium content offering that is incredibly valuable from a the consumer’s perspective.”

Wiedenfels also called this year’s TV advertising season Thursday “a little more challenging” than in the past, but said he was happy with the company’s results. “I’m feeling really good going into the fourth quarter” and the next 12 months, he said.

Asked about advertising trends in the fourth quarter, he said there were still “mixed signals” but that volume commitments were up ahead of time. “Cautiously optimistic,” he said when asked about his overall view on the prospects for the advertising market.

Wiedenfels discussed the dual Hollywood strikes of writers and actors, calling them an “unfortunate situation” and saying “there is very, very little content production going on right now,” but adding, “We are confident that there will be a resolution . Once that happens, we will be ready to return to a normal production rhythm as quickly as possible.”

Earlier this month, WBD cut its 2023 forecast before interest, taxes, depreciation and amortization (EBITDA) to $10.5 billion to $11.0 billion, a hit of $300 million to $500 million, “primarily due to the impact of the strikes ” from Hollywood. actors and writers. In a filing with regulators, the company — led by CEO David Zaslav, who was deeply involved in negotiations with Hollywood unions to end the work stoppage — did not indicate when it expects the strikes could begin. end.

In its update, the conglomerate also raised its full-year free cash flow expectations to at least $5 billion and said it expects to “exceed $1.7 billion in free cash flow for the third quarter of 2023, partly due to the strong performance of Barbie as well as the increasing impact of strike-related factors.”

Wiedenfels also discussed the possibilities of WBD intellectual property theme parks on Thursday. When asked if there was any opportunity to expand with Barbie World or similar offerings, he said, “The short answer is yes.” He highlighted that the company “just opened the Harry Potter making of studio tour in Tokyo in June this year and it is on fire.” The CFO added: “We have already achieved the milestone we set for the year in terms of visitor numbers. You currently have to wait months to get tickets. It was a phenomenal launch.” His conclusion on theme parks and similar opportunities: “We definitely want to do more in this area,” which will provide a good return on investment.

Asked about potential asset sales including joint venture production company All3Media, the executive said there are “not a huge amount of dormant assets” within the company, but said the company was “exploring” a deal for the “fantastic” All3Media that was strong out there. interest in it.

Overall, WBD approaches potential asset sales with “a purely rational mindset”, adding: “There may be other areas where we can look at some type of monetization and where we want to maintain control. So that makes things a little more complicated, but we are also looking at a number of things.”

Warner Bros. Discovery CFO on streaming prices: “Quality content has been given away well below fair market value”

By