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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ In a race at Beat Netflix, studios give billions of profits

In a race at Beat Netflix, studios give billions of profits



As main conglomerates are ready for their own stream services, they will remain lucrative licensing fees on the table to compete for subscriptions to the competition, which is, at least in the short term, likely to be "worth everyone."

On February 10, Epix launched the streaming service, which became the latest network, similar to CBS, Showtime, and HBO. The list will grow when Disney and WarnerMedia release their services in 2019, and NBCUniversal will debute its introduction by 2020.

It's not easy on paper. Netflix has become the $ 152 billion behemoth with the introduction of streaming in 2007 and watching its rocket surprise hold of 8,000 percent since then. What conglomerate for entertainment does not want to follow this success? The problem is that every time the sub comes out alone, he enters the crowded field, and potentially abandoned his share of about $ 5 billion. Netflix spends annual licensing on the content. Then there are about $ 4 billion that Amazon can spend, $ 1

billion from Facebook, and so on. For another year, but Kevin Reilly, a recently established content manager for OTT's WarnerMedia efforts, strongly hinted on February 11th that another such deal was not in the cards. "This is not a very good model for exchange," he said to the participants of the annual meeting organized by the Association of Television Critics. He also said that a service that has not yet been named will be launched from about 42,000 hours of existing programs from Turner, DC, The CW and Warner Bros., but this original content will not come later.

Like WarnerMedia and NBCU, Disney did not disclose pricing or the launch date of its service, although it has it, Disney +. Richard Greenfield, an analyst at BTIG, estimates that he will make his debut on October 1 at $ 7 a month, and by the end of the year will sign 2 million subscribers. But he believes that Disney needs around 7 million customers to offset about $ 500 million that will not receive annual licensing of Netflix content. "He continues to impress that Disney wants to compete with Netflix in order to remain a dealer of weapons who will pay the most for their content," he says. Adults have little or no knowledge that Disney + is on the horizon and is even more unaware of (55 percent) and NBCU (53 percent) of WarnerMedia streaming, recently . On the contrary, only 17% did not hear about Netflix, which already has 58.5 million US stream clients.

In addition, the Big Three, which develop their own streamers, already has one: Hulu, run by General Manager Randy Freer. When Disney and Fox complete their partial merger, Disney will control 60 percent of Hulu, while NBCU Comcast retains 30 percent and AT & T WarnerMedia 10 percent. "Hulu owners would be best placed to license and do business with Hulu," says Michael Pahter, an analyst at Wedbush Securities. "They do not have to build their own stand-alone services, and I think the upcoming streaming wars will cost everyone money."

When Lionsgate reported its latest results on February 7 for its Starz division, it may have unintentionally highlighted how expensive it is to compete with Netflix. Starz completed the last quarter with a further 1.1 million streaming and traditional customers for a total of 25.1 million thanks to the "strong increase in subscribers that exceed the rating," the company said. But, although the cable product has gained $ 136 million, the current business has lost $ 1.4 million. In fact, for the first nine months of the Lionsgate fiscal year, Starz Streamer has exhausted $ 31.1 million in red ink, compared with a profit of $ 346 million for Starz over the cable. – including its ESPN + service, early disloyalty Disney + costs and costs associated with its BAMTech technological asset – amounted to $ 1 billion in its latest fiscal year. "The same credit cards, the same user, the same password … if they want to buy all three, we will give them such an opportunity, potentially at a discount," – he said.

Netflix, of course, responds to competition and to the potential loss of a large number of licensed content, creating exclusive shows and films – in the amount of approximately $ 8 billion a year. Those who cheer on future streamers from Disney, WarnerMedia and NBCU, note that they already have large libraries to fill them, and most of the new content has for the first time earned money in the box office and through traditional TV, so streaming revenue is basically a sauce , which in the long run will be tasty for its own services than licensed to a third party.

What everyone hopes for the newcomer is that consumers will pay for a few streamers, which analyst Bruce Leitman says is an incident of about 43 million American homes. "The only thing is not just creating more revenue, but adapting and experimenting with business models," he says. "Scenario planning their stand-alone services will leave them essentially where they are today, which is not a bad place, but it will not allow them to explore future opportunities."

This story was first reported on February 20th by The Hollywood Reporter. To get the log, click here to subscribe.


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