The Strategy Behind Owning Content Across Multiple Streaming Services

There's a strategic reason behind why certain streaming platforms like WarnerMedia and Disney don't bundle all their content in one place. This approach, while seemingly counterintuitive, is designed to maximize revenue and maintain a competitive edge. Let's delve into the rationale and the business philosophies behind this strategy.

Why Licensing Catalog Content Matters

WarnerMedia, for example, has a robust content catalog that includes both exclusive and non-exclusive titles. By licensing the catalog content to other streaming services, Warner earns additional revenue. Exclusive content or content that experiences an exclusive window can generate even more significant revenues. This method of content distribution serves multiple purposes:

Maximizing Revenue: Exclusive content can be leased at a higher rate, allowing Warner to increase its earnings from a single title. Creating Excitement: Exclusive content helps to create a sense of exclusivity and urgency, encouraging viewers to watch the content as soon as it becomes available. This is akin to the strategy employed by brands to create excitement around limited-time offers. Building Engaged Audiences: When content returns, there's a renewed sense of anticipation, and viewers are more likely to binge-watch or revisit the content.

For instance, take the example of McD, McDonald's shamrock shake. They create immense excitement around the green shake by making it available only during St. Patrick's Day, even though the product itself is already available year-round. The limited-time offer creates a sense of urgency and exclusivity, making it highly appealing to their audience.

Content Quality and the Value Proposition

Another critical aspect of this strategy is the value of content in the marketplace. Content is king, and it also costs. These streaming platforms want to monetize their content as much as possible, and leasing these films to other services is one way to do that. While Warner and Disney may own their content, they also have to consider their audience's preferences and where they're most likely to find the content they want.

If everything was put on one platform, it would lose its value. WarnerMedia, Disney, and other major studios understand this. They don't put all their content on one platform because they want to maintain a competitive edge by being available on multiple platforms. This approach ensures that their content remains valuable and attractive to a wider audience.

Strategic Distribution with Syndication Agreements

It's not an accident that you'll find content from multiple platforms across different services. For example, Disney content on HBO Max, WarnerMedia content on Peacock, and Universal content on Peacock and Disney among others. This scatter distribution through various services is a strategic move:

Maximizing Reach: By distributing their content across multiple platforms, these studios increase their reach and exposure to a broader audience. Adjusting to Audience Preferences: Each platform has its demographic. WarnerMedia may offer exclusive windows to bring in viewers who are more likely to pay for exclusive content. Ensuring Revenue Streams: Syndication agreements allow these studios to generate revenue from their content on multiple platforms, thereby ensuring diverse revenue streams.

The idea is not to hoard content but to distribute it strategically. For instance, the TBS/TNT has the syndication air rights to Disney's Star Wars and shares Marvel rights with Comcast's SYFY/USA. USA/SYFY also has access to the Wizarding World films. This sharing of content not only keeps the value of the content high but also creates a collaborative and inclusive ecosystem in the entertainment industry.

The Business of Content Licensing

The phrase "show business" is often used to describe the entertainment industry, and it rings true. Content licensing is a part of the business strategy, much like a bustling marketplace where content brokers constantly trade and transact. Keeping content stagnant within a single platform would diminish its value, just as a shopkeeper would lose out on trade by never bringing in new products.

So, WarnerMedia and other major studios license their content to various platforms, creating value and ensuring that their content remains relevant and exciting to their audience. This approach ensures that their content continues to be a key driver of revenue and audience engagement.

Conclusion

In conclusion, the strategy behind owning content across multiple streaming services is a smart business move. It maximizes revenue, creates excitement, and ensures a wider reach for content. By understanding this strategy, content creators and distributors can better position their content to succeed in the ever-evolving landscape of entertainment and media.