THB #528: Triggered
I have written about a lot of people over a lot of years chicken-littling, which is to say being in a near-permanent mode of watching the skies for it falling completely.
But that doesn’t mean that I am not susceptible to those feelings sometimes.
I felt the urge to scream, “The sky is falling!” earlier this week when I saw the news on Monday that Comcast/NBC/Universal/Peacock were pushing to take over the NBA pact that Warners has had for decades, with cable arm TNT as its primary outlet. The price tag would be double what the last deal was, $2.5 billion a year over $1.25 billion a year.
What was it about this deal that rang my bell like a Mike Tyson hook, circa the 1980s?
Well… Warner Bros Discovery has been moribund on the Wall Street ticker for most of its life. But after settling in at a price in the low teens for almost 2 years, this is a kick in the gonads that could turn it into bait… which some have predicted for a while, but didn’t completely make sense to me.
WBD has a lot of good stuff to offer… but their inflexibly linear side, the cable nets, rely heavily on that NBA deal. With due respect to “March Madness,” it’s MARCH Madness. One month a year.
No matter how many times people say, “well… linear is dead, right?,” linear is still a key - if not THE key - to these companies staying afloat for now. You can see… “networks” is the biggest revenue producer and the the most profitable part of WBD right now.
The future of MAX and really, of all the Legacy-based Streamers, is mixing the Networks line and the DTC line without losing much in revenues. No one on the money side really cares how the content is distributed… that’s all stuff that the media loves to endlessly bloviate about. The insiders care about the bottom line(s). And for now, those bottom lines are still heavily reliant on linear.
Netflix, obviously, is the entity that doesn’t rely on linear TV in any way. But when media and others conflate the 6-year head start that Netflix had in streaming (a choice by Legacy companies) and their sub counts and their first years of reasonable profitability into “Netflix won streaming,” I can only shake my head in embarrassment for them… not because Netflix isn’t a great company with amazing accomplishments, but because nothing has ended… except perhaps the idea that any other company would become like Netflix. But none of them need or should want to be Netflix. All of these companies are still bigger, in terms of revenues and in many cases in reach, than Netflix.
Sorry, but when someone tells you that Linear is dead, feel free to remind them that over 50% of all viewing is still Linear.
Keep reading with a 7-day free trial
Subscribe to The Hot Button to keep reading this post and get 7 days of free access to the full post archives.