Analyst: WarnerMedia pivots to streaming ahead of HBO Max launch | Media Analysis | Business
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As the launch of WarnerMedia’s HBO Max direct-to-consumer service approaches, the company is doubling its overall commissioning activity but has begun to row back from its broadcast cable network commissioning activity says research firm Ampere Analysis.
Warner commissioni 14Feb2020
Indeed the analyst says that Warner — the third largest commissioner of new titles among US cable groups, behind only Discovery and Viacom CBS, and second in the US scripted space — is making significant strategic adjustments ahead of the launch of HBO Max this May, diverting resources from its cable networks and investing instead in a rapidly growing number of HBO Max original commissions.

Ampere calculates that by the fourth quarter of 2019, streaming commissions represented 73% of WarnerMedia’s new TV projects and that in Q4 2019, just over a quarter of commissioning activity was from its cable networks, down from over 90% in Q4 2018. This rapid change said Ampere illustrates the relegation of Warner’s cable networks to second place behind the strategically important streaming services. Streaming has grown from 7% of commissions in Q4 2018 to 73% in Q4 2019.

In addition, Warner’s overall content investment is ratcheting up, as cable network commissions slide. Cable properties were a top five US cable network commissioner in each quarter of 2019, yet during the year the number of cable commissions declined each quarter as activity was ramped up at HBO Max. Cable commissions were down 37% in Q4 2019 versus Q4 2018.

The company was also stepping up overall investment in new content. Commissioning activity for Warner’s streaming channels (HBO Max and DC Universe) matched its cable networks for the first time in August 2019 at four apiece. Overall, Warner was investing heavily in content and made more than double the number of commissions in Q4 2019 (63 titles) as it did in Q4 2018 (29 titles). Warner was the largest cable commissioner of scripted Comedy and second largest cable commissioner of documentaries in 2019.

Commenting on the shift he detected in the company, Fred Black, Analyst at Ampere Analysis said: “Warner’s pivot towards an increasingly HBO Max-first approach to commissioning is not only apparent in the number of new projects in development, but also in the types of content being commissioned. Warner’s cable properties commissioned only four Sci-Fi & Fantasy titles in 2019, all at HBO, while its streaming properties greenlit 12. This is the clearest sign yet that the home of the juggernaut Game of Thrones will in the future play second fiddle to HBO Max when it comes to some of Warner’s highest-profile genre commissions.”