BearSD said:
Quote:
To be honest, I think they all killed themselves by giving away their IP to Netflix, etc. Sure - there were going to be cord cutters. But if you look at TV today on the networks - there are absolutely zero shows anyone wants to watch except for the news, perhaps, and those who enjoy watching terrible choices on reality TV. It is a wasteland - no wonder no one makes any money. Scripted shows are all on Cable channels - driving whatever revenue is there, and the streaming platforms. Or sports. The only thing that bring eyeballs back to TV network channels is sports.
The legacy companies did make a mistake in licensing all their IP to Netflix and then letting Netflix get so big. The turning point was when they realized Netflix's market cap was larger than Disney's. But they overreacted to that by each launching their own streaming business -- Disney+, Peacock, Paramount+, "max", etc. -- and committing to losing hundreds of millions a year while ramping up their new services to hoped-for future profitability.
Now the companies' solution to the mess they created is to screw writers and actors and then fill up their streaming services with a constant supply of low-cost programming.
I can see that for Disney, Paramount and others.
Netflix, Prime, and to a lesser degree Apple, no long need to play that game. Netflix and Prime (and probably Apple) don't even provide meaningful residuals to writers and were not being subject to the writer's strike, but now are shut down domestically due to the actors out on strike. To avoid a lack of content, these streamers will rely more heavily on international series (using acting talent outside of the SAG membership) or nonscripted reality series content, such as all those docu-series on different sports (e.g., Formal 1: Drive to Survive). This is easier for services like Prime and Netflix to handle, which are well-established overseas and have the non-scripted content well in hand. Apple is somewhat more vulnerable, but still light years ahead of Disney and other traditional brands. They also have cash reserves to do what they want, including college sports.
Disney and other traditional guys are in a far worse position. They are hemorrhaging cash and spending $30 million upward annually per team plus development costs for a weakening college sports conference on streaming seems like a questionable play, when they are all in a gigantic cutting frenzy.
As for Netflix, Prime and Apple, maybe one of them thinks college sports work. But if things are as dire as everyone suggests, the actors and writers are fighting over a diminished pie, and the bigger players are better insulated from the strikes, so the strikes will settle soon enough. Any investment in Pac programming will need to make financial sense on its own.
Let's say it is $35 million annually
per program plus all the costs in starting a sports network (with some help in cutting costs from using defunct Pac 12 network infrstrututre). If it is the Pac 12 (SDSU and SMU), that is $420 million annually, plus annual costs, let's say $150 million (200% of what the Pac 12 network was costing annually) and development, and startup marketing costs of say $300 million (wild arse guess - Wilner said Pac 12 network initially lost $100 million ). So we are talking a $1 billion in the first year or so, and around $500 million annually. Most people think the number will come in around $35 to $40 million per program in say a five year deal (Big 12 is a six year deal), and even that will not be close to sufficient to fend off the B1G in the long run. This is not happening for the traditional media sources not named Fox or ESPN that already have made the investment. So we are asking does this equate to short run profit for streamers in increasing subscriptions in something like a five year period, before the Pac blows-up?
Edit: My comment about the major streamers not being subject to the writers strike was not accurate. I misread a Variety article. They were hit by the writers strike on domestic production.
