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Issue link: https://digital.macdirectory.com/i/1481697
And it was probably necessary given WBD has a gross debt of $53B in addition to his annual compensation package of $246M and an employment contract through 2027. The effort for the near term is to free cash flow to support the stock and pay off the debt. The large cuts throughout the company, especially those in the content creation/production area, have created serious doubts in Hollywood and the movie/TV production marketplace. It will be interesting to see how the company brings together HBO Max (unscripted content) and Discovery + (largely nonfiction) as they shift away from heavily discounted promotions and rely on a subscription fee that is already the highest in the industry, $14.99. While the wholesale changes may be alarming; as one executive noted, hope springs eternal at WBD. However, paving over that much history is dangerous for the company … any company. We’ll just have to see what the new streaming entity looks like and is received when it really rolls out mid-next year. Until then, established streaming services (Netflix, Disney, Freevee, Paramount, Peacock and others) are shifting their attention from subscriber wins/loses to something more meaningful – ARPU (average revenue per user). The first to focus on ARPU has been Netflix, which is by far the most mature firm in the subscription video arena. In the last quarter, they reported the highest ARPU with 73M subscribers (North America) of $15.95 per member, EMEA - $11.17, APAC - $8.83, LatAm - $8.67. Disney +, on the other hand, reported $4.35 per subscriber. The monthly ARPU will add value to the streaming services’ advertising value (cost), while improving their revenue/cash flow growth. To continue to increase their ARPU, streaming services should probably consider things like annual subscription options. It has worked for years for the mobile device folks. Maybe sign up for a year and get 1-2 months free. After all, it costs more to get a new subscriber than to keep an existing one. And as long as the annual fee is “modest,” folks will stick out of habit just as they have with your mobile phone company … switching is such a pain. All the streaming bosses have to do is follow Zelda’s advice - “That's good. Keep that up. Lookin' like you don't know anything.” – and things will roll along smoothly.