To make new U.S. broadcast TV series valuable to streaming services, it would be wise for the studios to fully license them internationally first, instead of immediately folding them into their international subscription services.

In my opinion, it doesn’t pay for U.S. studios to weaken their broadcast operations with fewer quality programs for several reasons. First of all, a well-watched broadcast network helps the studios’ own streaming platforms with promotion. In a sea of streaming options, keeping the brand in front of consumers is a great marketing tool. This is because soliciting new subscribers using a promotion within their SVoD platforms is like preaching to the choir.

The second reason is that, by keeping their broadcast divisions relevant, the studios have more of a chance to develop hits that could later be successfully carried on their streaming services once they achieve bingeing status (at least 20 episodes).

The third reason is that offering some financial stability to the creative community by way of residuals could yield big rewards. This concept is something that was lost with the advent of streaming media’s flat fee productions.

The fourth reason has to do with not losing the large revenues from international sales, which, until recently, amounted to over $3 billion per studio. In the excitement over the introduction of various streaming platforms, the studios lost track of the riches derived from international sales, in order to make sure that Wall Street investors were enthusiastic about the launches of the streaming services with an abundance of content and predictions of huge profits in the future.

Indeed, it took just two years to realize that streaming platforms would not be making profits anytime soon, and that losing revenue from international sales was going to hurt the bottom line.

The most interesting aspect of this losing studio proposition was that the new U.S. broadcast TV shows –– pulled out of the international market to feed the studios’ international streaming services –– did not bring in new subscribers since the new series were untested and unknown. On the other hand, well-tested, branded, and popular broadcast TV series like Friends were used to lure subscribers first by Netflix, and then HBO. Produced by Warner Bros., the 236 episodes of Friends debuted on NBC TV Network in 1994. In 2015, Netflix acquired their streaming rights for $100 million. Upon renewal, Warner Bros –– then Warner Media –– outbid Netflix to secure the series for its HBO for $500 million.

It is doubtful that without the NBC broadcast and the subsequent popularity of the series in the international market, now-iconic comedy series Friends could have become so valuable to streaming services.

Finally, streaming broadcast (or cable) content that has been previously licensed internationally will help determine its value to advertisers, now that most streamers are adding ad-supported services for lower SVoD subscription fees.

(By Dom Serafini)

Audio Version (a DV Works service)

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