Warner Bros. Discovery Shoot Themselves in the Foot and Act Like Everything’s Fine

It boggles the mind! At a time when every streaming service is racing to cram as much content as they can afford into their services, one decides to go in the opposite direction.

You’ve not doubt seen the stories; dozens of animated shows disappearing from Warner Bros. Discovery’s streaming services, almost-complete films scrapped, artistic endeavours cast off as mere implements of a tax-avoidance strategy, creators finding out their own shows were yanked via social media. All in all, it’s a series of bad news eminating from the company no matter who you are. And before you ask, no, the company’s stockholders didn’t fare any better either.

The most obvious question (why?) is a bit odious. Numbers were crunched, the costs of merging two companies have to be met, and the results say as much. Except the response is near-universal and the only people that are apparently pleased are those at the very top. The less obvious questions concern the decisions that revolve around the strategy. The company cans a load of content to save a buck; then what?

Well, on the one hand, the company thinks that by slimming down their offerings, they can create growth from a smaller core audience. On the other hand, that’s 20th Century cable network thinking in a 21st Century streaming age. Perhaps it’s no surprise given that HBO pioneered the premium approach in the first place by charging more, but offering the kind of entertainment you couldn’t find anywhere else. That’s a business model that’s over the hill though. Streaming is a winner-take-all game that Hollywood only realised too late when Netflix lapped up streaming rights for basically nothing and locked studios out of their own content for those crucial first years.

You see, with streaming, you either offer everything to everyone, or watch consumers use your competitors. Now everyone is playing catch-up and only Disney, with its exceptionally deep pockets, can lay claim to gaining ground. They did not buy 20th Century FOX just for kicks, they needed that company’s library, production capabilities, and brand to expand Disney+’s offerings to truly cater to everyone.

Where does animation fit into all this? Animation tends to appeal to a wide variety of audiences and tends to remain perennially popular. That makes animation good for a service’s library. Old shows can sit there, waiting to be discovered (or rediscovred). I cannot fathom that the marginal cost of storing and streaming content (compared to producing it) is enough to justify removing it altogether. How easy could it have been for WBD to simply stop producing new shows instead of obliterating them like they did?

The other aspect is that kids like animation. They like it a lot. Kids don’t have control over which streaming services they use, but their parents do. It’s not as emphasised now as much as it used to be, but a key focus of Netlfix’s marketing approach is families and Disney have followed suit. How many parents are re-evaluating their subscription to TWD’s services now? Throw in a cost of living crisis and it’s not hard to see where the trimmings might come from. Fast forward 5-10 years and you have a company that’s broken just about all of the Twenty Two Immutable Laws of Marketing.

So is animation a root cause or merely collatoral damage? I’d say it’s a mixture of both seeing as animation is expensive to produce but also tends to deliver greater long-term value; emphasis on the tends to. One could argue that both Warner Bros. and Discovery have failed to devote enough time, energy, and resources to their animated offerings, saw the writing on the wall, and simply decided to give up.

 

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