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How WarnerMedia Will Differentiate Its SVOD

AT&T’s WarnerMedia has released more details about its strategy for its still-unnamed SVOD service, set to soft-launch in Q4 2019, according to new comments by TBS/TNT programming chief Kevin Reilly, who will head the company’s direct-to-consumer content business, per Variety.


Reilly doesn’t expect to beat Netflix, and doesn’t plan to go head-to-head with Disney+ — but acknowledged the need to differentiate the service as a new entrant. To that end, Reilly outlined two key elements of WarnerMedia’s streaming strategy:

  • Retain ‘destination content’. The service will prioritize retaining what Reilly called “destination content,” meaning high-value shows like “Friends,” which will likely attract subscribers. Reilly also said they will stop “sharing” such content with other streamers — licensing core content while it lives on its own platform risks diluting a service’s value proposition. That will mean forgoing hundreds of millions of dollars in licensing revenue: WarnerMedia recently earned almost $100 million in a one-year deal to license “Friends” to Netflix, for example. Exclusive content will be a crucial driver of uptake and a key differentiator for SVOD entrants: While consumers said that content variety was the most desirable factor for Netflix, Amazon Prime Video, and Hulu, consumers ranked content exclusivity as the most important factor for HBO Now, per Business Insider Intelligence 2018 survey data. SVOD giants have thrived by spending billions on licensed acquisitions and to create brand new original content, but legacy media is more likely to rely on IP they already own to build up services. To that end, Reilly said that the “crown jewels” of Warner Bros. will end up on the service.
  • Dynamic windowing.WarnerMedia’s SVOD may also pursue what Reilly called “dynamic windowing,” meaning “putting the right product on the right platform at the right time,” with content assets being evaluated accordingly across the WarnerMedia portfolio. Though it’s unclear how exactly dynamic windowing will play out on the service, it could mean that shows and movies won’t live permanently on the service, but instead will have a more dynamic existence, based on consumer demand at any given moment or within a set time frame, likely informed by viewer behavior data. Limited choice, informed by data, could theoretically improve the user experience by saving viewers the grief of too much choice. People waste a lot of time trying to find something to watch: About 23 percent of the total time viewers spend on Netflix is spent searching through titles, according to an Ericsson study. But the tactic could backfire and produce a more confusing or frustrating user experience if subscribers are expecting to find something on the platform and find that it’s “dynamically” disappeared.―Business Insider
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