Warner Bros. CFO Thinks You Deadbeats Have Been on a Free Ride for Way Too Long
gizmodo.com
gizmodo.com
> For a decade, in streaming, an enormously valuable amount of quality content has been given away well below fair market value, and I think that’s in the process of being corrected.
He did not say anything about deadbeats, free rides, etc.
I think it's valid to say that the streaming services have been focused on growth rather than profits for the past several years, and that's changing as the era of cheap money ends.
FWIW, FMV is agnostic of cost.
> "Warner Bros. CFO Thinks You Deadbeats Have Been on a Free Ride for Way Too Long"
and rewrite it as
> "It has come to our attention that a significant portion of our consumer base has been leveraging our content without contributing to its monetization. We believe it's time to reevaluate this unsustainable model to ensure long-term value creation for all stakeholders involved."
It can further rewrite that as
> "Enough freeloaders. Time to pay up if you want to keep enjoying our content."
A more dispassionate (and informative) newsletter I like about the economics of Hollywood is https://entertainment.substack.com
Or to put differently, now that a majority of the audience has been pulled into the streaming world by years of loss-leading pricing, it's time to let the trap snap shut.
Actually, it’s the other way around. The studios have gotten away with charging way too much for sub par content. Let’s be honest, the pie is limited in both user spending and attention. You can raise the prices all you want, but you’ll end up going back to revenues you generated in early-mid 2000s because not everyone will watch your shows and pay as much as you’re asking for.
Because a lot of the content out there is from shows made in the 20th century. And a lot of the better content imo...
If I want some sort of trashy drama to watch, there's no shortage of freely available stuff on YouTube; the reason I paid money was because I wanted, you know, actual TV shows, and they decided to get rid of most of the ones I liked.
EDIT:
Just to ward off the pedants, I know reality shows cost more than $40 to produce. I still believe the sentiment stands though; they're cheaper than good TV.
This is the first time I've seen an exec explicitly argue to make streaming cable again. Good luck with that.
I mean he is competing with not just other streaming services but everything i could spend my attention on. My attention is the scares resource here, not content.
Same here. I'm waiting for the inevitable email saying that only 5Gbps plans will get free Max
They have two tiers of video offerings that I think are anti-competitive:
1) They give away access to some stuff ad-free as part of the prime bundle.
2) The more premium part of their catalog has ads (Freevee)
(They also have a very expensive, non-differentiated service where you can buy/rent stuff, but their prices and selection are similar to other services.)
Prime Video is a standard monopolistic dumping scheme: They're providing it for free to depress streaming plan prices and starve competitors.
With Freevee, they use account data they gathered from their online shopping monopoly to provide better streaming ad targeting than anyone else can.
I got a Prime membership years ago to get low-cost fast shipping and at that time, Netflix was far superior to Prime Video. As it's gone up in price, I can justify that because I also get streaming movies & music (although I keep forgetting about the music). All in all it's a good enough deal to the point where I honestly don't even know how much I'm paying for it anymore.
enough people do this, and then the streaming services will try to fix that by insisting on long-term contracts for short-term life for the content on the service. At which point, it is not worth subscribing.
Occasionally, I play the Netflix game. I lose so often that I'm surprised when I win and find something I want to watch.
Infinite LaGrange and BG3 are much more entertaining games...
*Click, click, click, Wikipedia, last episode = 12 Dec 2023; click, click, click; Google Calendar :: New Event, 12 Dec :: FRASIER REBOOT S1 READY TO VIEW*
Am not going to pay 4 months when I can pay 1.
Re: Yearly plans to curb stream jumping? HA HA HA. No.
Pretty much sums it up.
The near-disappearance of piracy for many relatively-well-off people happened _because_ it was in many ways cheaper (in terms of time too) to just subscribe to all three streaming services there were out there.
Now, with... fifteen? or so? out there, if there's a _single_ show out there I'm interested in on a platform I'm not paying for, let me tell you, I will not be subscribing to another one.
Now each service wants to own and control their own content and we have just a new version of cable tv that is streaming based, with less commercials, but is going to cost more overall due to lack of ad revenue subsidies.
The main reason that I subscribed to it was for its broad range of exclusive animated content, like Close Enough, Final Space, Infinity Train, and Adventure Time: Distant Lands. All but one of those have been removed from Max now (I guess for tax writeoffs and avoiding royalties?), and with their recent price increase for a bunch of awful reality TV shows, I'm done.
I do not know that there's anything I care about less than "My 600 Pound Life", and no matter how much they try and get me to watch that or "Pawn Stars", I find it unlikely that that's going to change no matter how many times they try and convince me otherwise.
I'm generally all for paying for my media (I have a lot of blu-rays, I own the entire series of Adventure Time and Adventure Time: Distant Lands on blu-ray), but I almost feel like piracy is kind of a civic duty at this point. If these corporations are going to make it impossible to watch their media legitimately, then the community needs to step and preserve the shows themselves.
And maybe we should resist programs that are "exclusive to streaming".
The depressing US tradition of animation (especially the 2D variety) being treated as third-rate or worse continues.
I'm not sure how they managed to get it past all the recent cuts, but Adventure Time: Fiona and Cake is genuinely pretty good thus far; clearly there's still a lot of smart and talented people at Cartoon Network and Warner Bros who just want make entertaining media and are being treated as "lesser" because they work with cartoons.
I thought Infinity Train, for example, was fantastic, particularly season 2. It was a great show that used animation to showcase a lot of interesting art, while also working in metaphors about the frustrating nature of introspection and themes about individualism and personhood. Now they've replaced it with a TV show about a bunch of ostensibly "hot" mothers hitting on younger guys in a beach house.
The power relationship between consumers and producers of entertainment has changed and things may not work out the way he expects.
I think someone with a History background should inform them how going to war on multiple fronts won't work.
We’ve been binging “Best Ever Food Review Show” and it pretty much destroys any travel food show on any paid streaming platform.
I also don’t understand the comment about increasing prices reduces churn. I canceled paramount plus and Hulu because of price increases and didn’t see the value in their content. AppleTv+ is under $10/m and their content is amazing. I am about cancel Netflix because their content has been declining and they keep raising rates. And it’s going to get bad when we start feeling the effects of the writers strike.
Disney differentiated with some pre-releases/theater times with $$ ups like Jungle Cruise during Covid, -- and should probably do more of that. But with the catalog system, I had 0 desire to see Ant Man and the Wasp knowing I could watch it at home in ~ 1 month.
Amazon / Fandango / Apple are struggling to keep their high margin rental models precisely because every other vendor gives you the whole catalog; and the user just has to rotate.
Giving the whole catalog (the HBO/Netflix) model is a subscription as a service -- which just as in software is attractive until you realize that your marginal income per user based on usage (and support/infrastructure) is below your revenue per user -- much more, below your previous income per user.
This isn't true for any of the services you mentioned, though there's substantial consumer confusion about what is and is not included.
Studies have shown that people will simply pirate content that isn't readily commercially available. I suspect that this result generalizes to situations where the customer paid for access to a catalog, but something from the catalog is missing from the streaming service.
I'm not sure where the cliff is, exactly, but to the extent that the services withhold some content from their catalogs they encourage people to just pirate the thing they thought they already paid for.
The list of big name "content" I think I really should watch/finish/whatever seems ever-increasing.
In reality I spend most of my screen time watching undemanding random and niche vids on YouTube made by individuals with fairly small followings.
It's what I don't get about these sites; I mean I do, but it baffles me. They have the perfect opportunity to re-invent and broaden consumption of their product except they dig their claws deeper into the media business of the 1980s refusing to imagine a world other than multi-year cable contracts with channel upsells.
These companies, especially Disney, should just have a yearly Day 1 Streaming pass that gives you release day streaming access like they were doing during COVID. I don't recall but I remember the single movie passes were pretty steep, like $30 per movie and apparently it worked.
Anyone who buys such a pass is already unlikely to go to the theater, so they aren't cannibalizing. What they would do is bring them into the movie sooner so you have more time to market to them from that movie (buy our plushies, buy a copy, come to the park, etc)
I'm not sure they understand how fair market value works.
In Canada, it's hard to find ways to stream a lot of 70s, 80s, 90s studio 'classics' (my standards). Because of legacy licensing arrangements with the big 2 and their spinoffs, not even the studio services carry their own movies. So my options are buy it digitally for $20, rent it for 48 hours for $6, or hit the dollar bins at flea markets, garage sales, and the like.
I use the money I save to support film conservators like vinegar syndrome. They've brought me far more compelling releases over the last few years than anything these executives would dream of touching.
I've got a backlog longer than I am tall. And if I need to zone out on brain-dead mindless TV, I've got an unlimited amount of it on YT to keep me going.
Part of the fun is the hunt for something good to consume.
YouTube has made it clear we can pay direct to content creators and cut this executive out of the equation entirely. This is nothing more than the thrashings of a drowning rat.
Something has to give in that equation, either its artists, studio profits in the name of user acquisition, but it never seemed sustainable or very reasonable to me. It was always obvious that at some point they'd switch from subsidizing their platforms to raising prices. It's arguably healthier.
I bought Get Smart to enjoy with my child. IIRC it cost over $100. That was and is ridiculous. If Disney had not bribed so many legislators, it would have been more like $10...
Otherwise, there hasn’t been anything worth paying for to me vs contributing to a few Youtuber’s Patreons.
HBO is the only streaming service I’ve found useful or good.
I'm now cancelling service while this nitwit thinks they should be charging more for it.
I just don't care about their content any more.
he's projecting his own reality outwardly. I'm saying he's saying this because it describes his own subconscious perspective of his own life: he's had it too easy.
but I'm not sure if I'm referring to WB's CFO or to the editors making the headlines
At this very moment my iMessage window is open to a group chat between my business partners (who are all professionals in the music industry) about how much music has been de-valued. People are paying $10/month for Spotify and receive tremendous value. That subscription fee is simply not enough to keep Spotify and the artists afloat. If Spotify doubled their subscription cost tomorrow and it went to the artists I would gladly pay it. Unfortunately I think I may be in the minority and I don't know if casual listeners would be so sympathetic to having their subscription rates raised so dramatically.
In short, I believe we've been a little bit spoiled by the wealth of music and film that's been on offer from these services for the last decade.
We balance each other out, I think?
At the same time, the artist are now capturing a significantly smaller fraction (think 1%) from that same pool of money. And that's being generous. It takes thousands of streaming listens of an artist for that artist to receive the equivalent of one CD purchase from back in the day.
The distribution of value and compensation is massively skewed when it comes to music streaming. Subscribers are getting tremendous upside while the creators are getting massively hosed under the existing model.
1,000 streams on Spotify nets the artist $2.38 in payouts [0]. For an artist to earn $60,000/year that means that they would have to accumulate roughly 25,000,000 streams on Spotify.
And that's assuming that you're a single person with 100% of the publishing and mechanical rights to your record. If you're a band, divide that by the number of band members or songwriters. Less the productions costs, less promotional costs, less expenses for equipment, less your manager's cut, etc. It goes on and on.
In fairness, most artists didn't receive anything from a CD purchase, either, as the costs to make and promote the album are usually deducted from the artist's share of royalties. (Also, said "costs" are often inflated/charged above the label's actual cost).
In a way we're kind of regressing into the scenario that Netflix originally resolved. It sucked having to rent movies a la carte, at movie rental places that often wouldn't even have what you wanted. Now you're basically doing the same thing, except you're renting access to an exclusive catalogue instead of a single movie.
This means that if you try to jack prices, people will substitute existing things they have in their library much more readily.
1,000 streams on Spotify nets the artist $2.38 in payouts [0]. For an artist to earn $60,000/year that means that they would have to accumulate roughly 25,000,000 streams on Spotify.
And that's assuming that you're a single person with 100% of the publishing and mechanical rights to your record. If you're a band, divide that by the number of band members or songwriters. Less the productions costs, less promotional costs, less expenses for equipment, less your manager's cut, less your label's cut. It goes on and on.