The company announced Wednesday that it
has recently decided to license certain HBO and HBO Max original programming to third party FAST services to be part of a packaged offering which will drive new, expanded audiences for these series. As we prepare for this transition, these series will be coming off of the HBO Max service in the coming days.So what the heck are FAST services? FAST stands for “free, ad-supported streaming TV”. Examples include Amazon’s Freevee and the Roku Channel. And will the WBD shows stay there? Not necessarily. In a news release, the company said it
will announce additional details about its own long-term WBD FAST offering in 2023.
Since WarnerMedia and Discovery Inc. merged into WBD in April, the company has been culling shows and films, as well as making plans to take entire series catalogs off HBO Max, as cost-cutting measures under new CEO David Zaslav. By taking programs like Westworld off the platform, the company avoids having to pay residuals to the cast and crew. It also makes money by licensing the titles to third-party services.
Westworld, once a celebrated HBO flagship series, was the most high-profile of the shows getting pulled from HBO Max. WBD canceled the sci-fi drama earlier this year after the season 4 finale.
Nick Romano
Guess I should be glad I watched the fourth season of Westworld when I did. I was planning to rewatch its first season to refresh it in my memory, but it seems that is now out of the question for the foreseeable future.
With everyone glued to the loud and public Twitter drama lately, a similar story of corporate degradation is unfolding at WBD, and for similar reasons as well: a newly founded – or acquired – entity saddled with unsustainable levels of debt in the merger, and with a CEO lacking any vision for growth and expansion. As much as some people praise David Zaslav, WBD’s CEO, for his prior experience in the TV space, he doesn’t understand the streaming business, and appears intent to fight against prevailing consumer trends in the space.
Consumers churn in and out.
Right now, we can get 30 million people with Euphoria, but they can come on for two months, watch Euphoria and then leave. Do we want to create incentives for people to be there? There are a lot of companies that have a business where the majority of people are there for the year.
Jill Goldsmith
Our whole library went on HBO Max. We weren’t selling any of it. But it was all on there. We looked, and we said, most of that is not being watched, or we don’t think anyone is subscribing because of this. We could sell it non-exclusively to someone else.
Complaining about consumer churn and then removing your own exclusive content from your flagship service is a bold choice if I may say so – also, a very dumb one. Having less content will simply encourage people to cancel their subscriptions quicker and switch to a competitor. And why would people subscribe to the premium service in the first place if they know you are planning to sell your shows non-exclusively as soon as they’re done? And don’t get me started on this gem: Subscribers today are like clicks in the ‘90s. People were running around buying companies and aggregating clicks
. Yeah, but a subscriber today pays $10–15 a month; how much did a click earn in the ‘90s? A fraction of a cent?
Fact is, consumers prefer having massive content libraries and watching the shows they like at their own pace; consumers prefer the Netflix model of releasing entire seasons at once, not a trickle of one-episode a week; consumers loathe ads and are generally willing the pay the premium to remove them entirely – for instance, as Netflix is introducing their ad-supported tier, few people are actually choosing that plan (it accounted for only 9% of new signups in the U.S. in November). Companies who keep their customers happy tend to succeed in the long term, those who don’t watch them leave for their competition.
Zaslav doesn’t appear to have any strategy to boost revenues and customers in the long run, just short term penny-pinching maneuvers and reviving relic business models from the cable TV days. What’s next? Running episodes on fixed timeslots to maximize advertiser targeting and revenue, with limited re-runs? Sending subscribers printed TV guides by mail?
His statements are vague about international distribution as well, another blind spot of his apparently. Netflix was so successful partly because of the lack of competition and a long period of abnormally low interest rates, but also because it invested in international growth, both by attracting subscribers and by financing shows in other countries. Would this supposed WBD FAST service be available outside the US? Nobody knows! Will shows be licensed to other international distributors, or are they only put on sale in the US? Again, who knows. This constant uncertainty will erode consumer trust in the brand, and sooner or later people will move on to other, more reliable streamers. Hopefully at that point Zaslav will be content to have saved his few dollars on residuals…
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