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It's still like a $750 million business and you compare that to Disney Plus which is already you know- in the region of $10 billion but what they did from the get-go with Peacock was have an advertising-funded tier. Now, obviously, with the mix of streaming services and the fact that everyone's got a strategy now, it's going to have mixed results, but it's interesting in your note you said that NBC actually looks pretty smart and what Comcast is doing over there, why?ĪLEX WEBB: Well, the original strategy with Peacock- now I'm not saying for a second that they've smashed it out of the park with Peacock, they haven't.
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So when you look at the ROI of a series like that compared to one-off direct-to-streaming releases, you could make the case that it's a far better bet to invest in a TV series.īRIAN CHEUNG: Now, what about the actual revenue stream in terms of traditional? Because one interesting thing is that at the end of the day, you still have a decent amount of people subscribing to cable. And the cost per hour is significantly higher. If you look at "Batgirl," which was presumably a sort of 90-minute film and had an $80 million budget, and is a one-off release, you're not keeping subscribers sticking around for more than it takes to see that particular film. If you have a show that runs out over the course of several weeks or indeed months, and you're looking at the cost of production per hour, a show like this is probably $10 to $15 million per hour of content. And the reason being that it is more conducive to promoting stickiness. I mean, this huge investment in these shows HBO Max, and now under David Zaslav, I mean, the idea seems to be to not put that kind of money, or is it? I mean, what do you think this premiere says about where the strategy should be?ĪLEX WEBB: So I think there's a massive difference between a show like this compared to a film such as "Batgirl," which is one of the productions that they canceled. I mean, certainly, a lot of people saying, look, this was a huge premiere but this was not something that was planned under David Zaslav, right? I mean, this is- the impact coming from Game of Thrones which is where HBO was. They've canceled that release completely now in order to focus on a proper it seems streaming bundle, CNN Plus was of course another victim of that strategy.ĪKIKO FUJITA: So Alex, let's just take "House of Dragon" as an example. So that is also something we're seeing at HBO, that actually Warner Brothers Discovery are tamping back on some of the ambitions that the old WarnerMedia management had, and they're saying, well, we've canceled a few shows, a few films in fact that they were almost completely made and were going to release on HBO Max, not give them a cinematic release. And in fact, Netflix itself is pivoting, it's going into advertising as it sees revenue opportunities plateauing. Since then, of course, we've seen the valuation of Netflix fall through the floor. That's when we started to see HBO Max come out with gusto, Disney doubling down on Disney Plus. And investors sort of said, well, maybe you other guys should be doing some of this as well. They saw that investors saw the multiples of which Netflix was trading, it peaked at around 53 times its forward earnings. As we were in the middle of lockdowns there was a lot of pressure on companies that maybe hadn't gone as hard and fast into streaming. How impactful do you think this is for Warner Brothers Discovery, which has had let's just say a very busy last few months?ĪLEX WEBB: There's certainly been some heavy pivots within this space. Again, everyone's buzzing about it, a lot of "Game of Thrones" fans may be reluctantly going back into this journey again.
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Video transcriptīRIAN CHEUNG: Well, the streaming wars have been in full swing for quite some time now, and HBO currently dominating the narrative with the debut of its "Game of Thrones" prequel, "House of Dragon." The question now, could Warner Brothers Discovery take command as the go-to streaming service? For more on this, let's bring in Alex Webb, Bloomberg "Quicktake" correspondent.Īlex, great to have you on the program this morning. Bloomberg Quicktake Correspondent Alex Webb joins Yahoo Finance Live to discuss the outlook for streaming players such as Netflix, Warner Bros.
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