UPDATED with more Friends deal details. After the recent fuss over the Netflix fate of evergreen sitcom Friends, AT&T CEO Randall Stephenson let attendees at the UBS media conference know that the newly extended license to the Warner Bros show is not exclusive.
“That means Friends can go onto our platform as well,” he said, alluding to the direct-to-consumer service that AT&T’s WarnerMedia will launch in late 2019.
A few hours after he spoke, seemingly putting an end to a swirl of reports — Netflix content chief Ted Sarandos called them “rumors” on the same UBS stage on Monday — a hard number surfaced that put the whole tangle in fresh relief. The New York Times reported that Netflix would pay WarnerMedia $100 million to keep the show on its platform through 2019, a figure that multiple sources also confirmed to Deadline. Neither Netflix nor WarnerMedia would officially comment on the matter after their executives finished their keynote appearances.
During Stephenson’s session, he emphasized the win-win nature of the Friends situation and suggested that a detailed reckoning awaits all content owners looking to control their own destiny in the streaming era.
Friends is an easy call. “That’s content that we would definitely want on our platform and it’s very important to Netflix as well,” Stephenson said.
Like its big-media peers, though, WarnerMedia is in the midst of sorting out the rest of its licenses and determining which will be exclusive and how much and what kind of content resides on other platforms as opposed to returning home. Traditional players have been making noises for the past couple of years about pulling their content back from third-party streaming services in order to favor their own pipelines, but executing those changes appears to be a complex process.
“There are probably going to need to be decisions made on every single one of these licenses,” Stephenson said. “Every deal is going to be different. We want to be very mindful of every distributor.”
The stakes are not small. The $100 million outlay is about triple the preceding deal for Friends and the market for proved hits shows no signs of cooling.
Asked by UBS analyst John Hodulik about his overall view of the streaming arms race from a cost standpoint, Stephenson said, “We don’t have to spend another $11 billion to rival Netflix.” Instead, the caliber of the intellectual property at HBO, Warner Bros and Turner will carry the day, he argued.
“The goal is not to become another Netflix,” he said, calling the streaming service a “warehouse of content.” At the Goldman Sachs media conference earlier this fall, Stephenson offered a new dialectic, likening Netflix to Walmart, while HBO is more like Tiffany. At UBS, he sought to clarify that his comparison “wasn’t meant to be derogatory … it’s an impressive warehouse.” But he maintained that WarnerMedia’s boutique will essentially bring in just as much revenue per square foot.
As far as the government’s appeal of its antitrust lawsuit, which will be argued in front of three federal judges Thursday and decided in early 2019, Stephenson expressed confidence.
“We had a number of appellate lawyers in that courtroom every day,” he said, referring to the spring trial of the initial suit. Their consensus was that U.S. District Court Judge Richard J. Leon “wrote a pretty tight order. … We feel like we have an order that can stand up.”
AT&T has gotten high marks from Wall Street in recent days after laying out its case for analysts on November 29. Several analysts have issued upgrades after gaining confidence in the company’s ability to pay down debt and manage through a period of pay-TV uncertainty.
After lagging for a couple of months, AT&T’s stock has perked up over the past few days, gaining 6%.