Too Much TV: Your TV Talking Points For Thursday, January 5th, 2023

Here's to having reporters asking tough questions.

Here's everything you need to know about the world of television for Thursday, January 5th, 2023.

A shorter newsletter today. My son is a senior in high school and this afternoon/evening was school-oriented. Back to normal tomorrow.

HERE'S HOPING THE WARNER BROS. DISCOVERY CFO WILL DO AN ACTUAL INTERVIEW
I think it's fair to say that most media industry executives hate doing one-on-one interviews. There are so many things that can go wrong - ranging from reporters who don't have a strong grasp of the business to those who focus on the questions most likely to bring a "clicky" answer. And then there is always the chance the executive will misspeak or say the quiet thing out loud in a way that can impact the company's stock price.

But with all of those caveats, I'd argue that media industry executives would be better off if they allowed themselves to be put in more situations in which they are forced to answer follow-up questions or discuss strategy beyond their chose talking points. Like it or not, the stock price of publicly traded companies depends as much on emotion and perception of expertise as actual strategy and execution. An executive who can passionately argue their case in one interview is worth ten tightly-produced conference appearances.

One prime example of that comes by way of Warner Bros. Discovery CFO Gunnar Wiedenfels. He spoke at Citi’s 2023 Communications, Media & Entertainment Conference on Thursday and he delivered his trademark selection of carefully worded thoughts on the company and its strategy. He didn't say anything you probably hadn't heard at any of his previous conference appearances. And because of the way these events are structured, he's never asked the difficult follow-up questions that seem like the kind of thing investors would like to know. 

For instance, his comments about the company's belief that streaming subscription fees are priced too low:

So I feel very, very good about the – let’s call it the infrastructure and cost side of the business, but to get to the core of your question, there's no doubt that these products are priced way too low.

I think JB or David maybe on one of our earnings calls. When they do the detail here saying, look, the idea of collapsing seven windows into one and selling it at the lowest possible price doesn't sound like a very smart strategy, and I think you know there was this partly capital market fuel phase of land grabbing. You couldn't lose enough money and couldn't grow subscribers fast enough. I think that's behind us.

And if you look at trend lines over the past 24, 36 months a number of the players have started gradually bringing up prices. So I think there is a there is a there is a building consensus that you know this phase of dumping pricing is over. And again, I think we're bringing something to the market. We will with the combined product bring something to the market that I have no doubt is going to be the best streaming product in the marketplace and we're not priced at that level right now in the U.S. more so internationally.

Again, a lot of the initial push when HBO Max was rolled out internationally was strive for the largest number of subscribers, not necessarily value. So there's a lot of, opportunity, I think, as deals come up to adjust pricing on the positive side. And then as you know ARPU is more than just pricing. The ad monetization for the ad like tier I think is a major factor with a number of elements. We'll get more engagement, more subscribers, but then importantly pricing power, CPM upside from better reach, better scale, better data, better targeting. So I think there's a lot of upside opportunity from an ARPU perspective in the industry.

The obvious follow-up is "Hey, between HBO Max and Discovery+, subscribers are paying around $20 a month. Are you saying you believe this new combined service is worth that and/or more? And given the experience that other streaming services have had in recent years when they boosted prices, are you concerned about possibly boosting the price on what would already be the most expensive consumer-based streaming service in the market?"

It's also not clear to me how the company can thread the needle with subscribers who are faced with a price increase at the same time they see more and more content moving off of the premium HBO Max/Discovery+ platform. I know from speaking with people at the company that there is a belief that combining the two services will lessen churn and the addition of what is left of the Discovery+ content will make the combined service seem beefy - even in the face of other selected content disappearing. 

I don't anyone knows for sure how that will play out with subscribers, but I am not nearly as convinced of this approach as David Zaslav and his team seem to be. He believes that it is possible to have both a highly profitable consumer streaming service while also create a secondary revenue stream by being a content arms merchant on the side by licensing off selected titles to your competitors.

So far, that approach has proved to be problematical for every company who has tried it, but sure...why not?

TWEET OF THE DAY

WHAT'S NEW FOR THURSDAY:

Battlebots Season Premiere (Discovery)
Call Me Kat (Fox)
Celebrity Jeopardy Season Premiere (ABC)
Christian Series Premiere (Topic)
Copenhagen Cowboy (Netflix)
CSI: Vegas Spring Premiere (CBS)
Death In The Dorms (Hulu)
Ghosts Spring Premiere (CBS)
Ginny & Georgia Season Two Premiere (Netflix)
Growing Up Hip Hop Season Premiere (WE tv)
Hell's Kitchen Season Premiere (Fox)
January 6th (Discovery+) 
Kold x Windy Series Premiere (WE tv)
La Otra Mirada Season Two Premiere (PBS)
Law & Order Spring Premiere (NBC)
Law & Order: Organized Crime Spring Premiere (NBC)
Law & Order: SVU Spring Premiere (NBC)
Mars One (Netflix)
Onimai: I'm Now Your Sister (Crunchyroll)
Revenger (Crunchyroll)
So Help Me Todd Spring Premiere (CBS)
Swamp People (History)
The Chase Season Premiere (NBC)
The Iceblade Sorcerer Shall Rule the World (Crunchyroll)
The Parent Test Spring Premiere (ABC)
Welcome To Flatch Spring Premiere (Fox)
Women Of The Dead (Netflix)
Young Sheldon Spring Premiere (CBS)

Click Here to see the list of all of the upcoming premiere dates for the next few months.

SEE YOU FRIDAY!

If you have any feedback, send it along to Rick@AllYourScreens.com and follow me on Twitter @aysrick.