In what may be an unusual approach, AT&T’s WarnerMedia is looking for ways to work with NBCUniversal when it comes new OTT businesses, according to one report.
Although WarnerMedia and NBCU are competitors, some of this makes sense. Walt Disney is already ramping up efforts for its direct-to-consumer service, Disney+, all in an effort to compete with Netflix.
But Disney isn’t looking for help -- especially when it comes to content. It has a lot of it; all of which is homegrown. But AT&T’s WarnerMedia seems to need more. That’s where NBCU comes in.
NBCU has also been figuring out its position in the OTT space, and both it and AT&T are already partners when it comes to Hulu -- NBCU owns 30% and AT&T owns 10%. Disney, upon the completion of its deal with Fox, will have a 60% ownership in Hulu.
Reports suggest Comcast may consider selling its Hulu stake to Disney. That means NBCU will be looking for a big play in the OTT space -- and not just with a broad service like Hulu. In additional to its video on-demand service, it also has a new service of live, linear networks.
Now, AT&T may be looking to add content to its proposed WarnerMedia OTT platform through a simple license agreement, leaving aside a bigger equity partnership arrangement with NBCU.
Whatever deals are made, the bigger picture is this: All media companies want their own brand stamped on their own digital media platforms. That is what Disney+ is about.
The new streaming digital world isn’t a one-size-fits-all formula for legacy media companies -- or for consumers.
What exactly will they be buying for their future streaming needs?
Perhaps three or four services, such as an ad-supported video-on-demand service (Hulu); a non-ad supported video service (Netflix, Amazon); and/or an ad-supported live, linear TV network service (DirectTV Now, Sling, or Hulu).
For big traditional media companies, none of these new businesses will be big moneymakers -- profit margins will be slim to none even in the years to come. Big program development costs will see to this.
Still, big media companies will continue to jump in, with the understanding they have to be in the game with a number of equity partners, paid distributors, and/or in-house owned brand operations to see some future promise.