Cynopsis Presents: A New Chapter for Warner Bros. Discovery

A CYNOPSIS MESSAGE FROM WARNER BROS. DISCOVERY
 

Cynopsis Medias First Morning Read
Tuesday May 17, 2022

With Sports, Streaming and New Ad Products, Warner Bros. Discovery Has a Seat at the Winners’ Table

Cathy Applefeld Olson

Newly merged and ready for deal-making, Warner Bros. Discovery is heading into the Upfront market with a show-stopping statistic: During March and April, the networks under its expansive purview had a 25 percent share of all primetime viewing in the coveted A25-54 demographic while the four major broadcast networks combined produced a 21 percent share in the demo, according to Nielsen.

Powered by live viewing of the NCAA’s March Madness tournament that aired across TBS, TNT and truTV as well as CBS, the NBA playoffs (TNT) and NHL playoffs (TNT and TBS), that figure renders the David Zaslav-helmed company an indisputable disruptor. Or, as Chief US Advertising Sales Officer Jon Steinlauf puts it, “it gives us a seat at the table at the top end of the market.”

Steinlauf says sports will be a huge story for the company at this year’s Upfront, where Warner Bros. Discovery will also be touting the muscle of its 17 lifestyle networks—including HGTV, Food Network, TLC, Magnolia and OWN—its streaming portfolio, where viewers are tuning into discovery+ for two hours per day, and its plans to elevate the news category with CNN. Cynopsis spoke with him at length on these topics and more:

Congratulations on your new position. What are your priorities?
The most important thing for us right now is establishing the right culture. Discovery and Turner are two of the original cable groups and now that they’re one, it’s about finding the best practices. My favorite part so far is just putting smart people in a room from both companies. The companies are at different stages in ad tech, and that nonlinear area is growing fast so it’s about, how do we utilize those ad tech relationships and spread them around. Both companies have streaming services, and the evolution of those streaming businesses is an interesting way to look at how we differ. Being in the advanced advertising business today, that’s table stakes. And the share we now have of total TV viewing every night, or cable viewing every night, or certain demographics… this all allows us to play a bigger part of clients’ plans in advanced advertising.

What’s your Upfront story this year?
What stands out most for us, at least in the short term, is the sports portfolio. We are putting a lot of time into understanding the relationships we now have with big sports advertisers and how those can be migrated into some of the other areas of the company, whether it be lifestyle or entertainment or streaming or news.

What NBC built back in the ‘90s, there’s no “must see TV” shows in broadcast prime anymore. What’s replaced it is the NBA playoffs, March Madness, the NHL playoffs being played mostly on TNT and ESPN—they are now must see TV. It’s becoming more of a sports-dominated industry on the ad-supported side. The piece that was missing from our company before this merger was the strong male live viewing experience. So now, we have the best of both in live viewing. We landed on this expression which we’ll say in the next couple months as we do our presentations and negotiations, which is “Sports Is the new prime.”

A CYNOPSIS MESSAGE FROM WARNER BROS. DISCOVERY

SPORTS IS THE NEW PRIMETIME

DURING APRIL, TNT AND TBS AIRED 7 OF THE TOP 10 TELECASTS ACROSS ALL OF BROADCAST AND CABLE AMONG A18-34

ICONIC BRANDS. UNRIVALED CONTENT.
ENDLESS OPPORTUNITY. OUR STORY STARTS WITH YOU.

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How does the live sports model translate to Warner Bros. Discovery’s other networks and audiences?
On the female side, lifestyle is the foundation of both Discovery and Scripps. We’ve been able to build these lifestyle brands effectively, but when you look at female viewing, a lot of it is moving more to ad-free or ad-light. So we’re finding there is a scarcity of female impressions in the ad-supported marketplace. Our big players in that race are HGTV, Food Network and TLC, which have the unique ability to get people to watch live because there’s a lot of fresh content every night. If you have a consistent brand that’s performing on a night-to-night basis with a lot of original programming, you get the live view.

The greatest compliment a viewer can pay you is to turn on your live feed first. Because if you get them on the live feed and they stick around for a few hours and are seeing the ads live, those advertisers get very quick reach. Every advertiser I talk to says it’s really important to get that quick reach.

How will the interplay between linear and streaming evolve?
We are in a position where we can continue to support both. We’re not missing a beat on the linear side but we’re also able to make our streaming customers feel they’re getting the best content from our company, some exclusive and some early. Streaming services are attractive to marketers because they have lighter ad loads and they’re getting that reach of the younger viewer who’s maybe not watching on a set top box. And when they are in the streaming world it’s a different mindset. This country is two-thirds cable, one-third non-cable. In the two-thirds cable, the advertisers feel like they have a strategy for those 82 million homes. But while that television world is increasingly effective at 35-plus, it’s not so much at under 35.

We’re all thinking about that 40 million [streaming] base, and how fast it’s growing. We really want to build up the advertising side of discovery+ and HBO Max because we are seeing better revenue results coming from the streaming service households that have taken the light ad option vs. the no-ad option.

Can you update us on Discovery Premiere, which enables brands to advertise across a curated selection of primetime originals?
Pre the merger, we were at $500 million a year on Discovery Premiere. It’s a linear-based product, and we’re going after the broadcast primetime entertainment marketplace. And now it’s going to be inclusive of other genres—sports, news, entertainment—beyond lifestyle. In this particular Upfront market, it’s going to be more of a well-rounded offering. And back to the importance of sports, we think a broader mix of genres, shows and networks will serve the advertisers well as the market changes and shifts more toward streaming.

In the months of March and April, the Warner Bros. Discovery portfolio had a 25 share of all primetime viewing of A25-54 and the four broadcast networks combined, all-in, in those two months produced about a 21 share.

A CYNOPSIS MESSAGE FROM WARNER BROS. DISCOVERY

PREMIERE BY WARNER BROS.DISCOVERY
HIT SHOWS, EVERY NIGHT, EVERY WEEK.

WEEK OF MAY 30TH
MONDAY: NBA WESTERN CONFERENCE FINALS (TNT)
TUESDAY: CHOPPED (FOOD NETWORK)
WEDNESDAY: THE MATCH (TNT)
THURSDAY: NHL CONFERENCE FINALS (TNT)
FRIDAY: GOLD RUSH (DISCOVERY)
SATURDAY: LOVE IT OR LIST IT (HGTV)
SUNDAY: 90 DAY FIANCÉ (TLC)
OUR STORY STARTS WITH YOU

What other new ads products are you offering as a merged company?
We have a new product we’re putting out called National Addressable. We have relationships in place with many of the MVPDs which will allow us to take the creative from an advertiser, tailor it for specific advanced segments and send it to as many as 60% of all US pay TV households. This is a practice that’s been available in digital. We’ve been able to do this on discovery+ and now we’re able to do it on the linear feeds because technology and the relationships are in place. We also have a diversity, equity and inclusion product available for sponsorship around our different networks, talent and shows. As we’re looking to have more BIPOC [representation] on air and behind the scenes, this would be a mix of content that could fall under a single theme or a holiday, like Juneteenth.

HBO Max added 3 million subscribers last quarter and discovery+ reached 24 million. What does the trajectory look like going forward?
It’s all about the quality of the services. The business models of the companies over the years have allowed for us to own a lot of the content in perpetuity, and it’s a robust offering. Discovery+ has over 70,000 episodes, mostly of full-length TV content and some exclusive content that is produced for the service. The technology is smart enough to be able to make the right recommendations to people. We’re seeing viewership on average per day per viewer of over two hours. And HBO is probably the most successful programmer over the last year with hit shows. The “Euphoria” finale had 25 million viewers.

A CYNOPSIS MESSAGE FROM WARNER BROS. DISCOVERY

OVER HALF OF HBO MAX AND DISCOVERY+
VIEWERS ARE CORD CUTTERS

OUR STREAMERS EXTEND REACH INTO NON-CABLE HOMES
WITH LESS THAN FOUR MINUTES OF ADS PER HOUR ON AVERAGE

WITH A LIGHTER AD LOAD, THIS POWERFUL DUO DELIVERS THE BEST VIEWING EXPERIENCE AND MOST ENGAGING ENVIRONMENT FOR YOUR ADS

OUR STORY STARTS WITH YOU
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We’re working to integrate some of the ad products, and best practices, that are available on discovery+ and on HBO Max, and vice versa. With discovery+, we have Contextual Search, where for example every time the word yogurt is said by on-air talent we can serve a yogurt ad in the break right before or right after. We will continue to expand that product across both services, as well as Binge Ads, Pause Ads, Limited Interruption Ads. One of the great strengths of streaming for advertisers besides being younger, less cluttered and non-cable reach is the programmatic side. A lot of advertisers have decided they want to use the streaming services to hit strategic targets with their campaigns, and programmatic ads are strategic, targeted and have limited waste.

With the added muscle of sports, news and scripted entertainment in its Premiere ad suite, and a powerful combination of cable and streaming offerings to incrementally reach audiences of all ages and viewing preferences, Warner Bros. Discovery is headed into the Upfront market on top.

Cynopsis Team

Lynn Leahey
Editorial Director
@Lynn_Leahey

Kerry Smith
Division President
Access Intelligence

Robbie Caploe
VP/Group Publisher
@robertacaploe

Executive Director of Sales
Albert Nassour
917-545-3129
Cynopsis Job Listings Sales
John Cox

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