WarnerMedia spend $1Billion+ for 'Friends' and TBBT, how does this make sense?

Quantum Erasure

(Not sure this is the right forum, etc.)


Just reading a bit about WarnerMedia's new streaming service, HBO Max, and John Oliver's reaction to it ("It’s Not HBO, It’s Just TV")
https://www.indiewire.com/2019/10/john-oliver-calls-out-hbo-max-1202181276/

and this paragraph really stood out:

WarnerMedia has been breaking the bank to buy high-demand content for HBO Max. The company spent a reported $425 million to own the streaming rights to “Friends” for five years. The NBC sitcom has called Netflix its home for years but will move to HBO Max in 2020. “The Big Bang Theory” streaming deal was even more massive. HBO Max got the rights to all 12 seasons of the CBS comedy hit in a deal estimated above $600 million.

This must make financial economic sense, I'm just wondering how?

Unearthly

Apparently Friends was one of Netflix's most watched shows along with the likes of The Office. I'd imagine big bang theory is similar. They both have hundreds of episodes which is important for engagement of customers as people tend to stick to a tv show they like from start to finish.

They are good marketing points to launch a platform with but personally I don't get why are they so popular either

banie01

I honestly cannot understand the economic model behind any streaming service , over the past 2 years they have boomed in number with "exclusives" being the differentiation.

In an age where hosters, streamers, Debrid and multiple other media sources are available to end users, with little need for technical knowledge on the part of the end user.
Paying for a subscription streaming service seems like wasted money.

I do have Amazon Prime video, only because it's included in my Prime membership.
Other than that a decent internet connection, Kodi with a few plug ins and scrapers with trakt to manage my show and movie viewing across the whole lot on multiple devices.
Along with a real-debrid sub that costs @€;30 per year, I have access to every single show, series and other media I want.
Usually within an hour or so of actual network release.

Surely the networks know that?
That more and more users are shifting directly to that viewing model rather than even subbing and leaving?
Netflix has plateaued in its core markets, and growth across all pay streaming platforms is stagnant and reliant on churn rather than "new" customers.

Harry Palmr

I was going to say I could see the logic but the Friends deal is only five years, so that is expensive for streaming, esp if the service is free from advertising. tBBT deal I can't explain at all. But it must have enough traction in the USA to justify the 2 million per episode which is cheaper than making it fresh.

riffmongous

Friends has a lot of rewatch-ability, like the Simpsons if you just want to watch something you already know off by heart and enjoy at a very light level it's grand.. good for short evenings after work or putting in 20 minutes at the weekend.. no investment or concentration required

If they want to compete with Netflix it's a good idea to have a show like that, and more importantly take it from Netflix. Whether it's really worth so much money though only time will tell

pixelburp

Shows like Big Bang, Simpsons, The Office and Friends are all still huge audience draws, especially in the US; and with streaming becoming a saturated market you get these big, desperate gestures to buy up shows that are seen as ... I dunno, "background TV". The sort of thing people stick on just for burbling 20 minute distraction. Some forecasters were predicting doom & gloom for Netflix 'cos it was about to lose the license to show The Office, estimated to account for a big percentage of its audience share. The whole industry has lost its mind, and with Apple, Facebook, HBO, and Disney all elbowing into the space, the cracks are starting to show. Someone's going to bite it.

TheIrishGrover

The numbers really are crazy alright and hard to understand. Obviously I'm not a huge mogul and Amazon are not short of a bob or two but the numbers are eye-watering: Amazon paid 250 million for the rights to make a Lord of The Rings TV series. Production will cost another 1 billion dollars...... With a B.

There is very much a streaming arms race in effect and while this is god for consumers because they will be competing for our love by providing more choice and better quality shows/movies/whatever, it also means that there is more fragmentation.

I mentioned this in another post somewhere else: How many streaming services are you going to subscribe to? Netflix and Amazon Prime are here. Apple TV is already advertising on TV here so is just around the corner. Then Disney+. Will HBO be next? Will they pull their shows from Sky? Assuming an average of 12 quid per existing or confirmed coming service (Disney cheaper in the US than Netflix, Apple higher). That is 48 quid a month. over 575 quid a year. Plus whatever you pay for TV. Plus your TV license.

So, I suppose, as I stated earlier, at the moment it's a bit of an arms-race. Each is trying to poach product from the other to make the competition look bare and look them more appealing.

Especially Amazon and Disney. Amazon seem to be spending a huge amount of money buying Sci-~Fi and fantasy series. Disney+.... Well, they own EVERYTHING! So you will see Netflix struggling soon and probably lashing out with crazy purchases soon. If HBO decide NOT to expand outside of the US watch the free-for-all for their IP.

So yeah, tldr: They are out to kill eachother buy buying up as much as they can. But more and more fragmentation of Streaming Services is bad for consumers in the long run.

pixelburp

What also makes the whole industry a bit insane is that the margins of victory are narrowing year on year; time was a decision on a shows future was perhaps taken after a season; maybe during if it was a true ratings disaster but otherwise shows were given time to breath. It was about building an audience, the mythical Nielson ratings to track how many eyes tuned in to your show at 8pm.

I don't believe that exists anymore: I kinda blame Game of Thrones here because it popularised TV as a viral commodity; a series of shocking twists that boosted visibility and popularity by dint of the latest big twist that got Twitter / Facebook chattering. Look at HBO's 'prestige' output since then and it's the same pattern: shows with more pronounced twists, turns or some narrative gimmick. Westworld was most transparent here, a show that fell over itself trying to manufacture those 'hashtag' moments of intentional audience manipulation. IMO you see this with Netflix's apparent scheduling tactic too: if a show isn't a wild viral success immediately, it's binned & so if you're lucky your favourite show might last a couple of seasons.

So it has become a case where a show has maybe two iterations to become the Golden Child of social media, that's a ludicrous market in which ... how many? 6, 7 competing stations are trying to wedge themselves into? Amazon and Disney are probably the only two corporations who have the literal cash to burn after lost causes (IIRC, Jeff Bezos himself got the Iain M. Banks adaptation greenlit, an otherwise very niche, adult and potentially abrasive SciFi series), while the rest scramble to make the new Game of Thrones.

S.M.B.

I don't think the landscape has changed that much over the years. You always had syndication, Friends has been making $1 billion a year for some time. When it's one company buying national or worldwide rights then it's going to be larger than the smaller networks picking them up.

And the water cooler has now been replaced with social media.

I've yet to see anything that's completely out of the ordinary when it comes to streaming vs traditional broadcasting.

Agent Coulson

They added the West Wing as well.