Zaslav Touts Disney-Charter Deal, Says Max Could be Bundled With Cable Subscriptions Soon Too
Zaslav says that his fellow WBD executives ‘really believe in linear,’ and that bundling Max with cable plans in the future is an idea that’s good for everyone.
The third quarter of 2023 saw mixed results from Warner Bros. Discovery’s streaming platforms. Max and its corporate sibling discovery+ lost 700,000 subscribers between the two of them during the quarter; on the other hand, the company’s streaming segment turned in a profit of $111 million during the period, a remarkable improvement from the third quarter of 2022, when streaming was losing WBD hundreds of millions of dollars.
- Despite advancements in its streaming segment, WBD CEO David Zaslav says the company still believes in linear TV.
- Zaslav also said that he would be interested in distributing Max alongside cable plans, similar to Disney’s new carriage deal with Spectrum.
- The CEO sees such deals as a way to build scale, lower churn, and bring more stability to linear TV providers.
TBS and TNT Aren’t Going Anywhere
Those subscriber losses could be made good soon if WBD CEO David Zaslav gets his way. Zaslav spoke with analysts in a conference call to discuss his company’s quarterly earnings this week and said that while his streaming segment is definitely on the upswing, linear channels the company owns like TBS, TNT, and truTV are very much in WBD’s long-term plans.
“We’re not giving up,” Zaslav promised. “We really believe in linear.”
The CEO also pointed specifically to Charter's new carriage deal with Disney as a way to extend the life of linear channels, while also helping streaming platforms build their customer bases. As part of the carriage agreement between Disney and Charter, customers of Charter’s Spectrum TV service get no-cost access to Disney+ Basic, and Charter pays a flat rate to Disney encompassing all of those users.
“There was a lot of noise around the Charter deal with Disney,” Zaslav said. “But to [Disney CEO Bob Iger’s] credit, that was a — that deal was structured in a way that’s really favorable for both parties and favorable for the ecosystem. The idea that all of the cable subscribers are now paying a [collective] fee for Disney+ is a positive.”
Is Max Coming to a Cable Bundle Near You?
The arrangement between Disney and Charter was almost certain to spawn similar agreements between cable providers and other streaming services. Zaslav wants in on such partnerships too, if his earnings call comments are any indication.
“You can imagine a world [in which] we’re redoing our deals or even advance of redoing our deals to get Disney+ and Max as an additional benefit to the cable subscribers and to be getting paid on each one of those and being able to sell advertising against each of those and having lower churn on each of those,” he mused.
Zaslav went on to explain that such deals automatically feature low churn rates, because users who are getting a streaming service for free through their cable subscription have no reason to cancel, even if they don’t ever actually watch that service’s content. This creates an incredibly stable customer segment, for which WBD can collect a prorated rate from whichever provider it partners with. Such deals also help customers think of cable as a better value, prompting them to stay signed up for longer and thus helping WBD bring in money through its linear channels.
WBD executives are not the only ones thinking along these lines, either. Paramount Global CEO Bob Bakish also discussed pairing his streaming service Paramount+ with cable providers last week, saying that’s where his company was headed in terms of future distribution and pointing out that it already had some of these types of deals in place, particularly in Europe.
Providers may not have any choice in the matter, as cable companies are willing to take a hard line to ensure their survival. Charter, for example, warned in late October that it may simply drop linear channels from providers who don’t make similar streaming access deals with it in the future. The additional customers that cable outlets can bring to streaming services is a tasty carrot indeed, but such outlets are obviously not afraid to use the stick if necessary.
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