Streaming platform distribution is a valuable media
business addition of Warner Bros. Discovery’s long-term, multi-year renewal deal for its linear TV networks with Comcast’s U.S. Xfinity video service in the U.S.
Is this enough to
counter nonstop cord-cutting anytime soon?
For its part, Comcast
will distribute WBD’s Max and Discovery+ streaming platforms.
While terms were not disclosed, it will probably include some ad-share revenue efforts, according to some
analysts.
For WBD, the deal continues carriage for its U.S. linear TV networks including TNT, TBS, CNN, Discovery, Food Network, HGTV, TLC, and Investigation Discovery.
The
distribution deal also includes carriage of those networks with Comcast's Sky UK platform, which also included Ireland.
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Michael Morris, media analyst for Guggenheim Securities, estimated
WBD’s highly scrutinized TNT network did not get a distribution rate increase for WBD -- partly because the network did not add NBA content for future years.
Still, he estimates overall
average revenues per subscriber for the entire package were higher.
This comes as similar industry deals have been made between other legacy pay TV distribution companies and media content
companies -- Charter/Walt Disney and Charter/Paramount -- including future streaming platforms.
But new efforts to build business will be a long road to travel.
For example, the
September 2023 Charter-Disney ground-breaking deal to have its Disney+ -- and possibly also Hulu and ESPN -- added to future bundles has yet to see any meaningful revenue uplift, according to
reports.
Compounding this, Charter has not yet seen a slowdown in overall industry-wide cord-cutting trends.
A sizable portion of pay TV consumers still want the freedom to pick and
choose individual streamers, or other video services.
Why would consumers looking to make a major change for their at-home entertainment consumption want to sign up for any new video bundles
that include old-school video services?
Morris projects revenue trends for both distributors and content owners will decline.
For Comcast, he says that means revenue estimates of $10.0
billion and $9.1 billion in 2025 and 2026.
Analysts are unsure whether there are any long-term -- or short term -- remedies for linear TV in deals like this.
How many more deals will
continue to be structured in this way?