Too Much TV: Your TV Talking Points For Thursday, September 12th, 2024

About that new Warner Bros. Discovery and Charter deal

Here's everything you need to know about the world of television for Thursday, September 12th, 2024:

BUNDLING TALK, PART 236
I've mentioned in the past that big media CEOs like Warner Bros. Discovery head David Zaslav prefer to speak to the the public and investors via appearances at investor conferences because they are able to deliver their preferred message without having to deal with a lot of pesky questions from reporters.

The problem with that approach is that investors and reporters aren't able to get some of the details that would provide insight into company strategy. And, to be blunt, media executives - like all executives of major corporations - will tend to only deliver the rosiest of news. Which may or may not be entirely accurate, depending on the situation.

David Zaslav was at the Goldman Sachs investor conference this morning and he used the occasion to announce that WBD had signed a new carriage agreement with Charter Communications a year ahead of the expiration of the current deal. 

According to Zaslav, the deal provides for an "overall" increase in carriage fees and did not allow Charter to drop any WBD linear networks. The deal will also provide Charter’s Spectrum TV Select package subscribers the ad-supported version of Max, including HBO content and Discovery+, for no extra charge. It marks the first time that HBO programming will be available in a standard cable bundle, and not sold as an add-on.

Zaslav touted the deal as a way to strengthen the existing cable bundle and he discussed how the future of streaming is bundling, an argument he has been aggressively making for more than two years.

But what matters in this deal are some of the details the CEO glossed over.

One of WBD's biggest near-term challenges is the company's loss of the NBA. The company reportedly receives around $3 per subscriber per month in carriage fees for TNT and sports also helps prop up the fees for TBS and truTV. The loss of the NBA was expected to result in a substantial reduction in what cable and satellite TV providers were willing to pay for a reduced sports lineup, even if WBD has been nabbing some other live sports events in order to beef up the offerings for TNT.

This Charter deal is Zaslav's answer to that problem, and I have to admit that it's clever albeit terrible for consumers and the industry as a whole. Sources tell me the new deal provides for what is essentially an unchanged carriage fee for TNT, in conjunction with a small increase for its other networks. 

That does a couple of things. It allows Zaslav to tout that he was able to negotiate an increase in carriage fees, even if it's only a modest increase for the non-TNT linear networks. But it also allows WBD to go into upcoming negotiations with Comcast and other pay TV providers with a newly-signed deal that sets the TNT carriage fee at around the same price as they are receiving now. And thanks to the favored nations clause in every carriage deal, WBD will be able to use this deal to demand that Comcast match the price Charter agreed to. That can potentially mean billions of dollars in fees that WBD would have otherwise stood to lose if the new TNT carriage fee matched a fair market value for a non-NBA linear network.

But this deal also provides a large number of potential subscribers for Max at a fairly low customer acquisition cost. And given that it's the ad-supported tier, that will also boost Max's ad availability and revenue. In the second quarter of 2024, Charter had around 12.7 million residential pay TV subscribers and while not every Charter subscriber will take advantage of the free Max, it will no doubt add millions of new subscribers to the service.

However, there are a couple of problems with this approach. WBD is forgoing whatever revenue it is currently receiving from Charter subscribers who currently subscribe to HBO through the pay TV provider. And while Charter is likely paying WBD some per-subscriber fee, it will be some discounted amount that is much less than Max would generate with a stand-alone subscription. So the question is whether the reduced fee is worth it, even with WBD spending less on customer acquisition. 

The biggest gamble of this deal is that David Zaslav and other WBD executives are betting that the current lawsuit with Fubo over the proposed sports streamer Venu won't end with the company being forced to break up the current cable bundle in some fashion. This deal doubles down on the long-term viability of the cable bundle and given what we're seeing right now in the industry, it's a near life-or-death gamble for the company.

Unfortunately, a lot of the industry press isn't digging too deeply into the details of the deal and so we're seeing headlines today like "Zaz Pizazz."

THE STREAMERS LOOK TOWARDS THE END OF THE QUARTER
The third quarter will be ending in a couple of weeks and the way we know that is the various streamers are offering deeply discounted deals that will end in three months. Disney+ and Max are both offering new subscriptions for a couple of bucks a month and industry experts will tell you that discounted price is likely to appeal to people who either don't believe the service is worth the full price. Which means those subscribers are a lot less likely to stick around. So we shall see what happens.

ODDS AND SODS
* MSNBC host Chris Hayes' new book The Sirens’ Call will be published on January 28th. The book explores how attention has become the most important resource of our time, and how the constant extraction of attention impacts us.

* The latest Dateline clip show, Dateline: The Smoking Gun, will premiere Thursday, October 3rd on Oxygen.

* Season nine of The Real Housewives Of The Potomac premieres on Sunday, October 6th. 

* The Max Original film Salem's Lot will premiere Thursday, October 3rd. 

WHAT'S NEW TONIGHT AND TOMORROW

THURSDAY, SEPTEMBER 12TH, 2024:
AI And The Future Of Us: An Oprah Winfrey Special (ABC)
Ángel Di María: Breaking Down the Wall (Netflix)
Billionaire Island Series Premiere (Netflix)
Colin Jost And Michael Che Present: New York After Dark (Peacock)
Emily In Paris Season Four Part Two Premiere (Netflix)
Into The Fire: The Lost Daughter (Netflix)
Midnight At The Pera Palace (Netflix)
Mommy's Stolen Memories (LMN)
The Old Man Season Two Premiere (FX)
The Tailor Of Sin City Series Premiere (Sundance TV)

FRIDAY, SEPTEMBER 13TH:
Dora Season Premiere (Paramount+)
First Time Buyer's Club Season Premiere (OWN)
How To Die Alone Series Premiere (Hulu)
In Vogue: The 90s Series Premiere (Hulu)
Lego Star Wars Rebuild The Galaxy Series Premiere (Disney+)
Officer Black Belt (Netflix)
The Grand Tour: One For The Road (Prime Video)
Three Women Series Premiere (Starz)
UFO Cowboys Season Premiere (The Roku Channel)
Uglies (Netflix)
WWE Smackdown Season Premiere (USA)

SEE YOU ON FRIDAY!