Warner Bros. Discovery travels to Westworld to make a splash in FAST

With $47 billion in Warner Bros. Discovery debt, HBO has many attractive programs that could make more money on free, ad-supported television.

If David Zaslav knows anything, it’s pre-programmed, ad-supported TV channels with a lean-back function. So for its Warner Bros. Discovery, it only makes sense to go on FAST, aka free, ad-supported streaming television. Consider it the method to his insanity given his recent high-profile cleanup of HBO Max’s library, particularly with Westworld.

Warner Bros. Discovery is moving FAST, well, fast. At the company’s most recent quarterly earnings call, Zaslav said that WBD will “aggressively attack the AVOD market with our proprietary FAST offering in 2023.” Between that and the upcoming HBO Max and Discovery+ combo, WBD engineers should probably be planning to get through the holidays.

Zaslav sees his company’s vast film and television library as a “unique opportunity to expand our addressable market and add real value.” Given the mega merger between Discovery and AT&T’s WarnerMedia assets in April, he’s right.

There is “a massive amount of content that isn’t even online [HBO Max/Discovery+] that’s sitting with us that wasn’t launched to monetize. We’re going to sell some of that, which we talked about, and we’ve started selling it,” Zaslav said on the company’s third-quarter earnings call. “But on the FAST side, we have the ability to build a service without buying content. Most players in this space buy content and then try to sell that content and effectively create a vig where they get a return on that content based on what they spent on it.”

The addition of FAST to its existing hybrid AVOD/SVOD platforms (which in turn will become one in the spring) makes Warner Bros. Discovery “full service,” as Zaslav puts it. It is an increasingly necessary concept in a challenging macroeconomic environment, especially outside the US

“All major services are going to need a FAST channel — not so much in the US,” said Alan Wolk, co-founder and lead analyst at TVREV, who coined the acronym FAST in 2018. “I don’t have money for subscription TV services,” he said IndieWire. In these often underdeveloped countries, “they expect heavier ad loads” and “ad banners at the bottom of the screen while the show is on.” For free access, it’s a well-tolerated compromise.

There’s also a “flywheel” effect where a free tier can convert users to paid subscriptions, he said. “Westworld” could be a “lure” for HBO Max in this case. That’s why Westworld, the high-budget, high-concept, highly-rated (for a while!) HBO series with an incredible Season 1 and three more seasons after, will soon be a giveaway.

“In the past, a show like this would have worked never were shown against advertising,” Colin Dixon, founder and principal analyst at NScreenMedia, told IndieWire in a separate call. “So it’s a pretty big step.”

Big but logical. “Once a show has sat in a library for a number of years — no matter how good it is — it doesn’t get watched very often,” Dixon said. “With this type of show, there’s definitely a lot of room to monetize it in other ways.”

Westworld Season 2 Jeffrey Wright

Jeffrey Wright in Westworld Season 2

John P Johnson/HBO

The sci-fi aspect of Westworld’s dystopian future has broad appeal, Wolk said, adding that Warner Bros. Discovery probably felt that “the kind of people who watch a FAST service look at it like that.” something would stand”. There could also have been contractual reasons that made sense.

So FAST isn’t just discarded crap anymore that nobody else wants. That’s why HBO Max can afford to lose a Westworld – even a few of them.

Wolk believes cutting content from HBO Max won’t debase the service, “with the huge asterisk honking that the (remaining) shows have to be good,” he said. HBO and HBO Max earned a combined 14 Golden Globes nominations Monday, earning Netflix the most nominations thanks to “The White Lotus,” “House of the Dragon,” and “Hacks.” So yes, we would say the quality remains.

If you think free Westworld comes as a shock, Dixon wouldn’t be surprised to see HBO’s crown jewel series The Sopranos make an appearance on the upcoming FAST service — at least for a while. High-episode shows are particularly well-suited to FAST because these channels require thousands of hours of programming.

“With $50 billion in debt, your attention is focused on revenue generation like you wouldn’t believe it,” Dixon said of his prediction that everything is at stake. (A great line, but technically the company’s net debt is currently only $47 billion.)

"The sopranos"

Tony Soprano (James Gandolfini) on The Sopranos

Courtesy of HBO

But what will WBD FAST look like anyway? Dixon believes Warner Bros. Discovery’s FAST app will be “a separate service” rather than a free tier within the Max/Discovery+ app, much like Peacock’s most basic option. A standalone service, Wolk said, would protect potential consumers from potential confusion. It would also be more expensive, which might be problematic for a cost-obsessed company. His best guess is that WBD FAST will become standalone and the service will consist mostly of discovery programming.

If that’s the case, Zaslav should “buy every single interesting FAST channel out there,” Dixon said. Personally, he would recommend adding a FAST stage to the core app and including every possible customer in the overall ecosystem. (He believes that Paramount Global-owned Pluto TV, one of the most successful FAST players, will eventually merge with Paramount+, the company’s SVOD/AVOD hybrid service.)

Warner Bros. Discovery could also package programs and license FAST channels for other services like Pluto, Dixon said. “We’re now in a world where you need to take full advantage of it to best monetize content [revenue streams] who are out there.”

Do you read Netflix? Both Wolk and Dixon believe Netflix will join Warner Bros. Discovery in the FAST space. Dixon thinks that could happen as early as next year, while Wolk thinks 2024 or 25 is more likely. Even with its advertising tier and password-sharing program, Netflix still has a few tricks up its sleeve to maximize its revenue potential.

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https://www.indiewire.com/2022/12/warner-bros-discovery-fast-westworld-1234791536/ Warner Bros. Discovery travels to Westworld to make a splash in FAST

Lindsay Lowe

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