Friends, HBO Max, Sandman Show, a Cheap Netflix, and a Dark Crystal
|M.G. Siegler||Jul 12, 2019|| 3|
Back for round 2 of the newsletter reboot and I’m already going to miss the 5pm hour. That’s why 5ish works so well, I suppose :)
One quick continuing PSA: I still don’t think the betas of iOS 13 are stable enough for regular use yet. I’m on the third release of the dev build (and the second iteration of that, no less), which I believe is the second public beta build, and it’s still quite buggy with a lot of app crashes — Pocket being a key one for me. Still surprised Apple is doing what they deem to be public betas this early. Hopefully it improves quickly.
Unlike, First Draught, I won’t always have a beer to share here, but I’m having one now, and so a shout out to Modern Times (a San Diego-based brewery) doing a tap takeover at a Whole Foods Steep Brew in San Francisco. I’m having the Ice Pilsner. Good, refreshing stuff. 🍻
Netflix is currently paying WarnerMedia about $80 million for exclusive streaming rights to “Friends” this year, according to people familiar with the matter, and $100 million to NBCUniversal for its current multiyear deal for “The Office.” HBO Max will pay $425 million to carry “Friends” for five years starting in 2020, a person familiar with the terms said, in what is essentially a transaction inside WarnerMedia. Similarly, NBCUniversal’s five-year deal for “The Office” is valued at around $500 million, according to people familiar with the matter.
This comes as absolutely no surprise and, as noted, follows a similar move to pull back The Office from Netflix (in 2021, when the current contract is up) as well. The numbers are a little surprising as they’re massive — especially for a company to be paying for its own content. But as the article explains, this is the cost of doing business in our current environment. Could you imagine telling all the various in-the-money players on Friends or The Office that the streaming money was going away? That would ensure the next Friends or The Office has no shot of going to NBC.
The bigger issue may be: are the next Friends or The Office likely to go to network TV anyway? Streaming is so rapidly taking over the landscape. A show like The Office is so much more popular on Netflix than it ever way when it was on broadcast TV (I was an OG fan, FWIW). (Friends is still likely a slightly different story in terms of scale.)
Although WarnerMedia is reclaiming a lot of content from Netflix, the company continues to make shows for the streaming giant as well. Last week, Netflix struck a deal with Warner Bros. for “Sandman,” a series based on the DC Comics property.
“We loved it, but there were other people in the marketplace that really wanted it,” Mr. Greenblatt said, adding that in this scenario it made more sense for the company to sell to Netflix. “We don’t want to be the only outlet for Warner Bros. Television,” he said.
Now that is interesting and sort of surprising. Again, the market probably dictates this, but do you think Netflix is going to be giving their shows to HBO Max? Lol.
Speaking of ‘HBO Max’ — yes, it’s really called that — here’s Chris Welch:
There’s HBO Go, HBO Now, and soon, there will be HBO Max. For WarnerMedia and parent company AT&T, the latter is most important, as it will become the subscription video service that they position against Netflix, Hulu, the upcoming Disney+, and a range of other paid video offerings.
Which suggests that HBO Go/Now are going to continue to exist. I can see ‘Go’ (which allows subscribers of HBO through cable to watch on the go), but Now? Presumably that’s to offer different price options? ‘Now’ is already expensive at $14.99/month (Netflix is $13/month for most people and Disney+ is going to be $7/month!), and they’re clearly going to try to price ‘Max’ more than that.
This seems like a mistake on both fronts. I’d have one direct-to-consumer offering. And I’d price it competitively (I think $15/month should be the — wait for it — MAX). But hey, this isn’t TV, it’s:
“Anchored with and inspired by the legacy of HBO’s excellence and award-winning storytelling, the new service will be ‘Maximized’ with an extensive collection of exclusive original programming (Max Originals) and the best-of-the-best from WarnerMedia’s enormous portfolio of beloved brands and libraries,” the company wrote in a press release today.
(The emphasis there is from WarnerMedia, of course.)
So glad they clarified what ‘Max’ stands for. I thought for a second it would be all Max Hedroom content, all the time. Actually, that may be worth more than $15/month. With each passing week I’m growing more and more worried about the future of HBO.
Speaking of those Warner properties still being sold to Netflix, here’s Lesley Goldberg on a massive one:
Sources say Warners, which controls the IP, took the Sandman TV pitch to multiple outlets, including corporate sibling HBO. The premium cable network did not make a play for the series given the massive price tag attached (and likely number of other big world shows in the works) and Netflix snapped it up as the streamer continues to make an active play for massive IP that could be turned into subscriber-friendly franchises a la Amazon's Lord of the Rings and HBO's Game of Thrones.
Did I mention that I was worried about HBO?
The Sandman deal will provide a financial windfall to Warners, which is in final negotiations for a new film and TV pact with J.J. Abrams that could be worth north of $500 million. Sources note that the studio opted to sell it to a third party in a bid to bring additional revenue to the company rather than placing it at its forthcoming streaming service.
There’s a famous proverb about having your cake and eating it too…
May as well continue on this storyline... Here’s Martha Josephson with some details on Netflix also getting more cost-conscious?
In the meeting, Mr. Sarandos cited “Triple Frontier”—a Netflix-made action drama starring Ben Affleck—as a film that was too expensive given how many viewers it attracted, according to people familiar with the meeting. The film cost $115 million.
I mean, let’s be clear, the main issue with Triple Frontier wasn’t the cost. It was the cost and that it wasn’t very good. (It was fine. A complete throw-away.) Rather than the cost, I think you should to focus on creating great content; content people value and are happy paying for (even if indirectly with their Netflix subscription). I know that’s subjective, but come on, Triple Frontier wasn’t great.
Netflix has anticipated the competition by ramping up production of its own shows over the past few years, fueling an explosion in its programming spending to $12 billion last year from $4.6 billion in 2015. Netflix still spends less than many traditional companies: Disney spent $13.3 billion on film and TV shows in fiscal 2018 while NBCUniversal spent $16.6 billion on programming and production last year, corporate filings show.
This feels like some important context that is often left out of the pieces highlighting how much Netflix is spending.
It’s also interesting to hear that they’re thinking about doing backend deals with talent and doing some pilots. Netflix is maturing… (Their “Efficiency Score” metric — basically, a show’s budget versus its adjusted viewing share — is fascinating as well.)
Speaking of Netflix… this brings back memories. Haunting memories…