WarnerMedia appears to be reconsidering the logic behind nonexclusive licensing deals for some of its top library content ahead of the launch of a WarnerMedia streaming service.
Kevin Reilly, president of TBS and TNT and chief creative officer at Turner, who was also recently named head of content for WarnerMedia’s direct-to-consumer streaming service, doesn’t like the idea of loaning out the “crown jewels.” That’s according to The Hollywood Reporter, which was present on Monday when Reilly addressed a crowd of reporters.
"Sharing destination assets like that, it's not a good model to share," he said, according to the publication. "They should be exclusive to the service."
Reilly’s take on the rights for big WarnerMedia properties like “Friends” strays from what other AT&T executives have said. Last year, WarnerMedia sold another year of nonexclusive rights for “Friends” to Netflix for approximately $100 million. AT&T CEO Randall Stephenson said that, while that identical deal structure can’t be applied to licensing deals for all of WarnerMedia’s IP, “Friends” stood out as a series that could still live on third-party platforms.
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"But that was one we said exclusivity is probably not that critical on that type of content, but it's critical to have on our platform. So, we did license it to Netflix as you saw, but on a nonexclusive basis,” said Stephenson during AT&T’s most recent earnings call, according to a Seeking Alpha transcript. “And so, each of these decisions on significant content like that are going to be evaluated in terms of how critical is it to our platform to have it as exclusive versus you know the economics of licensing it to others.”
That balancing act of harmonizing new incoming subscription revenue (and in some cases advertising revenue) with the loss of content licensing revenue is something that WarnerMedia’s competitors are struggling with too.
Disney made the decision to pull back its content from streaming services like Netflix in favor of housing it on its upcoming Disney+ streaming service. As a result, the company is expecting to miss out on $150 million in licensing revenue this fiscal year.
Comcast/NBCUniversal is also doing its best to be calculated about licensing as it prepares to launch its own streaming service in 2020. The company said it will continue licensing its content to other studios and platforms, though it plans to retain some of its TV shows and films for the platform.