As Streaming Accelerates, Will Traditional Licensing Deals Change?

In the wake of rising TV/movie content production -- especially for needy streaming platforms -- what happens to the big legacy TV revenue-producing licensing revenue?

With major efforts to promote homegrown premium video platforms -- which can be easily exported internationally -- what does this mean for TV networks/stations looking for individual pieces of programming content around the world?

Multiple markets have always existed for licensing and syndicating programming. For years, this has been the case in the U.S. on TV stations and cable networks -- some exclusive, some not. Shows like “Friends” and “Seinfeld” started on TV stations then morphed to a coexistence on cable networks — and later to streaming. Now, some arrangements are exclusive.

But plenty of nonexclusive agreements continue. Consider the first-run afternoon NBCUniversal talker “The Kelly Clarkson Show,” which airs on U.S. TV stations. It also has a run on Peacock, NBCU’s streamer.

Then again, some shows are too popular for nonexclusive airings. Think about competing streaming services, and all the press Netflix got for losing highly viewed shows, such as “Friends,'' now at WarnerMedia and HBO Max, and “The Office,'' now at NBCUniversal and its Peacock streaming service.

Consider ViacomCBS, which generates $6 billion in content licensing. It produces 900 shows annually. MoffettNathanson Research is asking what happens to its high-margin licensing period down the road.

What’s the answer?

Perhaps what TV media companies have done in the recent past: Offer program deals on a nonexclusive basis. MoffettNathanson believes it can do this in the rapidly homegrown streaming world -- especially in non-U.S. territories.
No surprise that new premium video streaming platforms need to rely on premium programming. ViacomCBS, like many big U.S.-based media companies, spends billions on content.

MoffettNathanson estimates $15 billion was spent in 2020 overall for traditional TV network and theatrical outlets; and $1 billion devoted specifically for its streaming platforms, growing to $4 billion to $5 billion in three years.

In turn, all this means advertising revenues, for the same content, can typically be shared. Many U.S.-based media companies are able to extract deals through different types of revenue-sharing arrangements.

The streaming business is exponentially growing. But at the same time, what kind of cannibalization -- ad revenue, content or otherwise -- is just down the road?

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