I’m no longer just David Zaslav, CFO Gunnar Wiedenfels, and a roomful of ruthless Warner Bros. Discovery accountants swinging their Excel sheets like guillotines. Stream the series and movies on your wish list (note: 2008’s “The Bucket List” is only available on PVOD) while you still can – content removal is the new power move.
Last month, Paramount+ cleaned up the shows ‘Inside Amy Schumer’, ‘Cradle to Stage’, ‘Tell Me a Story’, ‘Ghislaine: Partner in Crime’, the films ‘Fantasy Football’ and ‘Snow Day’ and a crop of the Nickelodeon series from his archives, a source confirmed to IndieWire. The deletion of the library followed the cancellation of “Grease: Rise of the Pink Ladies”, “Star Trek: Prodigy”, “The Game” and “Queen of the Universe”, which were also removed from service.
In the current stage of the streaming wars, overspending is so tacky. Now it’s all out-Rescue each other. It’s one practice less is more, and math can actually bear that out.
Credit goes to Warner Bros. Discovery as a trendsetter: The then newly merged company cut its teeth last August with its singular farewell to “Batgirl,” a completed direct-to-stream HBO Max film (on a theatrical budget) that went straight to the Trash before anyone could see it. In return, the publicly traded company has seen some relief from its $56 billion debt. (WBD now has only about $47 billion left to make.)
By the end of 2022, dozens and dozens of existing HBO and HBO Max shows and movies have gotten the shot of Thanos. In no time, the idea went from the unthinkable to standard practice. We spoke to a half-dozen stream insiders about this story, and they all agreed: This is the new normal.
About a month ago, Disney did its best WBD impression and dropped 76 titles from Disney+ and Hulu streamers. The following week, a company SEC filing suggested the dump of the contents would not be the last. Case in point: Last week, Hulu pulled two unique ABC series featuring “Alaska Daily” and “The Company You Keep.” (They’re available on PVOD.) Saying goodbye to single-season series and one-time specials will become regular practice for ABC content on Hulu, a person familiar with the plans told IndieWire.
Streamers have always rotated licensed content on and off the platform based on when existing deals ended and new ones started. This one is different – these properties are owned by the streamer and have no expiration dates. However, streaming platforms no longer think of themselves as warehouses with infinite storage space. It’s not that “everything must go,” but not everything can – or should – stay.
Removing content accomplishes a few things. First, if a platform pays rights fees to a producer or studio, it can remove the fees from the balance sheet. And since every piece of content has an amortization schedule, removal speeds it up. It’s like totaling a car that still has years to pay off.
There’s also a psychological effect: it can impart a sense of exclusivity and allow streamers to brag about curation (as they usually do). Several people have told us that with new programming always arriving, so is data about what keeps users engaged; you don’t want the good stuff to be diluted by the bad stuff.
In some cases, a contents impairment charge, defined as the dramatic reduction or loss of an asset’s recoverable value, can be used as a tax deduction to offset capital gains. It’s best leveraged during a restructuring, such as when WarnerMedia merged with Discovery last April.
Paramount’s elimination will create a similar advantage due to Showtime’s merger with Paramount+, a person with knowledge of that new setup told IndieWire. Keep tabs on what Disney and Hulu do late this year or early next; this opportunity is rare and comes with caveats.
WBD has licensed some shows it has removed, creating another revenue stream. Select HBO series – “Insecure,” “Six Feet Under,” “True Blood” (internationally only; currently available in the U.S. on Hulu), “Ballers,” “Band of Brothers,” and “The Pacific” — are either now on or are headed to Netflix, a source familiar with the deal told IndieWire.
“Westworld” is a cornerstone of a WBD-branded FAST (free and ad-supported streaming television) channel packaged for Tubi and Roku. Technically, the series is a devaluation; WBD had to deduct the license fee. (It was a very small fee, we’re told.) Still, “Westworld” can never again live on Warner Bros. Discovery’s platforms without some extravagant charge-backs. Streaming may be the wild west, but CPAs are anything but wild, and no one wants audits.