Reports of a potential licensing deal between HBO and Netflix rival have sparked mixed reactions. While some industry experts consider the move as a step towards streaming profitability and increasing residuals for creatives, others see it as the sale of crown jewels by Warner Bros. Discovery boss David Zaslav to hit his savings targets. The non-exclusive deal, which has not been signed yet, will include popular titles such as Band of Brothers, The Pacific, Ballers, and Six Feet Under in addition to Issa Rae’s Insecure. These titles were first reported by Vulture.
Until a few years ago, it was common for Hollywood studios to license their library content to streaming services. Netflix acquired a lot of library content, and it was a boon for the studios’ distribution arms. HBO had a similar arrangement with Amazon, signed in 2014, that saw several series stream on its Prime Video service. However, the introduction of several streaming services such as HBO Max, Disney+, Peacock, and Paramount+ has resulted in these companies putting up walled gardens to house their content.
Non-exclusive deals, like the potential one between HBO and its rival, allow a studio to make money on library titles, open up opportunities for a new audience, and increase streaming residuals, a key facet of the WGA’s fight with the AMPTP, for creatives. Given that Zaslav is looking to come up with up to $5B in cost savings following the merger between Warner Bros. and Discovery, a few extra dollars for older series that are likely little watched on Max, makes sense from a financial point of view.
Controversy Surrounding the Deal
Despite the potential benefits, certain factions within HBO were unhappy with the deal. HBO has a reputation for its high-quality content, and some believed that licensing its library titles to a rival streaming service would tarnish the brand. However, it could have been worse for those hoping to keep the HBO brand as a Tiffany brand if Zaslav’s team had started shopping the rights to recent gold-standard titles such as Game of Thrones or Succession.
Disney Also Considering Licensing Titles to Rivals
Warner Bros. Discovery is not the only studio considering licensing its library titles to rivals. Disney is also exploring opportunities outside the Mouse House. In April, CEO Bob Iger stated that “on occasion” it would consider licensing some titles to rivals. However, don’t expect the core Marvel, Disney, Pixar, or Star Wars product to land on third-party streaming services anytime soon.
Ted Hope, the former co-head of movies at Amazon Studios, has suggested that the streamers have adopted the wrong group think. He believes that all the streamers killed or generally injured theatrical runs, non-exclusive media sequencing, and territorial licensing. Hope argues that returning to the old wisdom, which worked and made money, could be a more viable option for streaming services.
The potential licensing deal between HBO and its rival may open the doors to streaming profitability and increase residuals for creatives. While some may view the move negatively, citing concerns over tarnishing the HBO brand, it could provide financial benefits for the company. Other studios, including Disney, are also considering licensing their library content to rivals, indicating a shift in the streaming industry’s dynamics.