Daddy Zaslav, Netflix not eye-to-eye

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Bob Jersey

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Dec 10, 2022, 8:21:05 AM12/10/22
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Suddenly, sources tell Deadline, he's gotten his shorts in a bunch over the way the streamer pays, f'rinstance, WB Television for content... even delaying, they say, delivery of finished shows for weeks...
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Adam Bowie

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Dec 10, 2022, 12:33:21 PM12/10/22
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From what I can see, Zaslav should be directing his ire towards his own executives who made the deals with Netflix if he's not happy with the payment terms. It's not as though deficit financing is unusual in the TV industry!

Under the old network model, a TV network would only pay a licencing fee which represented a proportion of the overall cost of production. The remainder of the cost would be made up by the producer selling those rights globally and in separate windows to cable providers and streamers.

Because Netflix generally asks for exclusivity, they pay a premium over the cost of production to the studio making the series. So a network like NBC might only pay 50% of the production cost of an episode of Manifest, Netflix is paying perhaps 125% of that cost. That removes a lot of the risk to a studio like Warners who might ordinarily be left with a dud should the network cancel the show after a few episodes (The downside of course is that a show that's a massive hit has no real upside beyond that original 25% profit. BTW, I'm making up these percentages).

But this just feels like accounting.


Adam



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PGage

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Dec 10, 2022, 8:21:09 PM12/10/22
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Agreed, though I don’t think Zas is really pissed over standard accounting. His whole deal is letting everyone know there is a new sheriff in town, who will be doings things differently going forward. 

Even if this current tantrum changes nothing in current arrangements, he wants peers, subordinates and contractors to know that he will have a ready supply of the good, dirty stuff that millions of eyeballs get addicted to, and those who want those eyeballs are going to have to pay more, and more upfront, than they used to.

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Tom Wolper

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Dec 12, 2022, 2:17:54 PM12/12/22
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However much an egomaniac Zaslav might be, he still can’t act with the impunity that, say, Elon Musk does at Twitter. Zaslav has to answer to a board of directors and shareholders as well as investors in general. He has to continually show he’s taking steps to make WBD profitable no matter whose favorite series gets trampled in the process.

When streaming started investors were on board with platforms spending a ton of money to bring in as many new subscribers as possible without regard to profit. We’re now in a transition to the next phase where investors are demanding profits. We have no idea how it’s going to shake out but the model we’ve gotten used to, lots of prestige series at a cheap subscription rate, is going away and it’s not David Zaslav’s fault.

Kevin M.

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Dec 12, 2022, 2:26:50 PM12/12/22
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Agreed. This is akin to the Dot Com Bubble that burst around the dawn of the millennium. In the 1990s everybody had to have a flashy website filled with unnecessary features, and the absurdity of companies that made laundry detergent or snow tires having to spend millions to drive traffic to their websites quickly got out of hand. Eventually things calmed down and cooler heads dictated what did and didn’t need to have heavy online investments. 

All the streamers will be scaling back over the next several years, though I suspect few will do so as visibly and egregiously as HBO/Discovery. I suspect the current state of Twitter will also allow media companies to scale back on social networking too, or at least rethink the strategy. 

The hardest to deal with are legitimate news agencies whose stories are shared all over the internet without adequate compensation. For reporters to do their jobs well, they need the support of well-run news gathering organizations, and those are not handling the world of streaming very well. 

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Kevin M. (RPCV)
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