Differing IP Strategies Across Streaming Platforms
Warner Bros. Discovery is starting to utilize different licensing strategies to bring in new revenue. Other streaming providers, like Disney, prefer to have stronger control over their intellectual property so that it can provide a more unique streaming experience.
Warner Bros. Discovery (Warner Bros.) is now “open for business,” according to CEO David Zaslac. While it once closely guarded its intellectual property and content, Warner Bros. is shifting strategies to allow others to begin to use some of these rights. By licensing its IP, the company is increasing revenue and bringing much needed income to the company.
Based on recent cancellations and strategy shifts, Warner Bros. seems to be searching for a new stream of revenue. The company recently canceled and removed both shows and movies in large numbers from the HBO Max streaming platform. It appears that Warner Bros. is shifting its focus from becoming a leading streaming platform to garnering revenue from licensing.
Intellectual property licensing allows IP owners to give a third party the right to use the owner’s IP without a transfer of ownership. There are two kinds of licenses that Warner Bros. is managing: exclusive and non-exclusive licenses. An exclusive license gives a third party the lone right to use the owner’s IP and prevents the owner from using their IP during the life of the license, while a non-exclusive license does not restrict the rights of the IP owner, allowing them to continue using and/or licensing out their intellectual property to multiple third parties.
After Discovery and WarnerMedia merged, Warner Bros. has been canceling or cutting different programs entirely, and instead, bringing in revenue through licensing schemes. Warner Bros. is currently shopping around a new Batman series that was originally slated to be released on HBO Max. But following the merger, the series is now being pitched to streaming giants like Hulu and Netflix. By moving its Batman content away from Warner Bros. platforms and into a licensing scheme for Batman’s IP, the company is shifting from becoming a leading streaming platform to garnering revenue from licensing deals.
It seems that C-suite executives at Warner Bros. are adopting The CW’s prior model of licensing content to streaming platforms in order to bring in revenue. The CW was never profitable, and Warner Bros. and Paramount were joint owners of The CW before selling the network to Nexstar.
While Warner Bros. has a history of licensing material, its executives are showing that they intend to increase the company’s use of licenses, the opposite strategy of its competitor, Disney. Disney hold rights to some of the most profitable IP in the media market, including Marvel and Star Wars. Rather than trying to increase profits by extending nonexclusive licenses, Disney maintains a strict control over its content and crafts exclusive license deals only where it can create and market unique content. Therefore, executives at Disney+ demonstrate the value of having exclusive content on platforms. The combination of original Disney IP, like Frozen and Moana, combined with exclusively licensed content, like Marvel, have helped Disney+ become the second best streaming service (only tied with Amazon Prime), according to U.S. News & World Report.
Time will tell which of these IP strategies will prevail. Currently, in terms of streaming service quality, Disney holds an early lead: the company is ranked higher in terms of best on-demand streaming services. Warner Bros. will also have to mitigate the bad PR it earned for canceling anticipated programming. Warner Bros. has faced backlash for the cancellation of Batgirl, and while executives claim the controversy was “blown out of proportion,” they will need to find a way to improve the company’s public image if they want to match the success of HBO Max and Discovery+.