They’re at it again. Warner Bros. Discovery has let one of their dogs off the chain in the form of their CFO Gunnar Wiedenfels, who had some very strong opinions about you and what you’ve been paying for when itcomes to streaming.
But is he right? Do people get too much for too little? Let’s look at the system as it was, as it is, and how it might look going forward.
Wait, What Did He Say?
It seems like every time news comes out from Warner Bros. Discovery, it is something controversial. Whether they are thinking of shutting down TCM, removing popularcontent from their Max platform, or shutting down movies for tax purposes, the company hasn’t been making friends.
This week, they had another uncomfortable moment when CFO Gunnar Wiedenfels made a statement at an investor conference about pricing structures:
Although these statements are meant to appease investors, and they often do, the reality of the situation can be quite different. Gunnar Wiedenfels may simply come off as blustery unless he can back up his statements with results.
Both Gunnar Wiedenfelsand CEO David Zaslav have been making similar pronouncements over the past year in the hopes of making sure revenue streams stay open and money starts truly flowing into the organization.
Whether it has been working or will work is an entirely different story.
Is Pricing the Real Issue?
There are plenty of reasons why people gravitate towards different streaming services. The main factor will always be content. The exclusivity of content is what sets different streamers apart from one another.
Another issue is pricing. When prices go up, people typically walk out. But now, we are seeing what could be a bubble in terms of streaming content. There are now the big seven: Netflix, Max, Prime Video, Hulu, AppleTV, Paramount+, and Disney+. Of course, there are others as well, but they are often considerably more narrow in terms of content. An example is Shudder, which is a horror-only streaming service with both mainstream and original content.
Related:What the Warner Bros Discovery Merger Has Meant for Moviegoers
Depending on interest, people are often willing to pay whatever price is necessary for specificity. But when it comes to general content, streaming services are feeling the pinch. But so are consumers. Unfortunately, streaming has largely become the only game in town. Like the internet, people are unwilling to give up their entertainment even when money runs low.
Companies bank on this and assure investors that people will pay; they just don’t know it yet. But with price hikes announced by nearly every streaming service in the past year and a half, consumers have yet to balk. They complain but shrug and pay the extra five dollars, not realizing that when all the services are combined, they could be dropping an extra $75-100 a month.
Warner Bros. Discovery owns a lot of content. Far more than the average consumer realizes. And Warner Bros. Discovery is very aware of just how much of the market they have cornered. But this does not mean they must put all their content out in the open. In fact, they are toying with a concept that other streamers have already put in place: Tiered paywalls.
What Happens Next?
With all the talk of content and pricing, the eventual end of the road may be twofold. The first piece is the possible collapse of diversification of streaming services. At the moment, many platforms, such as Peacock, have limited amounts of preexisting content. However, thebig guys like Disneyand Warner Bros. Discovery have been gobbling up properties at a record pace. Sometimes to the point of being a detriment to the overall company.
Disney recently talked about how it is slashing proposed Star Wars and Marvel projects due to the thinning of the brands through overwhelming their audience. The concept of superhero fatigue is a direct result of Marvel throwing up a new movie or TV show every few months. Disney realizes that they are putting out too much money to make too much media that makes too little. Their attempt at remedying this is to ensure that they curb projects and raise prices.
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The second eventuality is that the tiered systems become so untenable that streamers require everyone to return to commercials. They will essentially return us to the days of network TV but with a much heftier bill.
Regardless of when or how this happens, Gunnar Wiedenfelshopesg it happens soon.Warner Bros. Discoveryneeds the money, and they know that they can get it from you.
