When Going “All In” Is Bad Strategy

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Ever get a phrase stuck in your head? Like an ear worm? I had one of those this week, as I debated between anointing ViacomCBS, Comcast or Discovery as the “most important” story of the week. To exorcise that mental demon, and to mix metaphors, I plan to debunk it today.

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Most Important Story of the Week – Why Being “All-In” May Not Be Good Strategy

If you were alive in the early 2000s, you probably remember the Texas Hold’em poker boom. I was in college, so I certainly do and had friends who went “all in” on playing. (I knew my limitations, so I didn’t turn into a mini-Nate Silver.)

Thanks to that poker boom, the phrase “all in” entered the cultural lexicon. Recently, it has intruded on the coverage of the streaming wars, usually as an admonition that certain legacy media firms are not as “all in” as they need to be. (Meaning not as “all in” as Nettflix.) So consider these three headlines:

Discovery+ Plans Their First Scripted Originals
Paramount+ Will Debut One Film a Week in 2022
Comcast Doesn’t Have a Regional Sports Streaming Strategy

If you treat “all in” as a business framework, you’d say that Paramount+ and Discovery+ are clearly all in on the dedication to streaming, but Comcast is not. Since “all in” is good and “not all in” is bad, I could end the column here.

But I need to write several hundred more words to justify your time, so I’ll admit that I hate the idea of being “all in”. It’s an awful framework. Tie it back to poker. When you go “all in” you push all your chips into the center, and frankly hope that the cards pull right. Sometimes, the right call is to push your entire chip stack in, even when you only have, say, a 75% chance of winning. Which means one in four times you lose, which means leaving the game. Night over. Win or go home. 

Is that good strategy? If you’re a young startup, sure. If you’re a company with thousands of employees and millions more customers depending on you, probably not. If we actually wanted folks to go “all in” on wild bets, the amount of bankruptcies would be horrific.

But being “all in” does have one key value: it implies focus. 

Whenever I’m asked to define “good” strategy–a harder task than it seems–I always include focus. A good strategy is almost always a focused strategy. So that’s the better question to ask. Each of the three companies above–Discovery, ViacomCBS, and Comcast/NBCUniversal–are desperately trying to catch Netflix, Prime Video, Disney+/Hulu and HBO Max in the streaming wars. Do they have good strategies to do so? Are they focused? And how do these recent decisions fit in those frameworks? And do these show how meaningless the “all in” phrasing is?

All In, With Some Strategic Worries: Discovery and Discovery+

Key Headlines:

Discovery Reaches New Streaming Carriage Deal With Hulu Live
Discovery Plus Sets First Scripted Series for Development

In this case, it’s hard not to see Discovery+ as “all in” on streaming. Which is surprising given that if I wrote this last year, you’d say no one was further out in the streaming wars. Thus in a year, they’ve changed their strategic focus entirely.

But dig deeper. In the first headline, the focus is that Discovery got carriage on Hulu Live TV–Disney’s virtual MVPD. Reading the article, though, you get this nugget:

“As part of the pact, Discovery will pull back many of its popular shows from Hulu’s separate on-demand service and make them exclusive to Discovery+, its new streaming platform, said the person, who asked not to be identified as the news isn’t yet public. Those titles include “90 Day Fiance” and “Fixer Upper.”

That’s smart and focused strategy. Discovery is training folks to go to Discovery+ instead of Hulu. Getting folks to convert to Discovery+ is much more valuable than any licensing revenue from Hulu.

But I have some strategic worries. Especially around that second headline. Simplistic analysis of the streaming wars says, “Hey Netflix made scripted Originals, and Netflix is the market leader, ergo proctor hoc, we need scripted originals to be the market leader!”

I’m not sold. Look at the example of Youtube Originals. They tried to make big buzzy scripted Originals like Cobra Kai, but the model didn’t work. What did work? Using famous celebrities and Youtubers to do cheap content that advertisers wanted to partner with. Know what you are good at, and deliver that, not scripted originals.

Discovery runs the same risk here at the streaming level. Discovery’s key to growth is to leverage what it does really, really well: cheap, addictive reality/unscripted shows. The ultimate lean back content. Which is still good at drawing in customers, who want to follow certain personalities (like the Gaines family, the Property brothers or Food Network star). Starting “scripted” originals–as opposed to unscripted reality shows–portends a lack of focus for Discovery. 

And those shows don’t reinforce the brand. One doesn’t think high-end dramas when they think “Discovery”. It’s very hard to be true, general interest, four quadrant broadcaster or streamer. Netflix did it by being first. Discovery+ is far from first, and they need to stand out to their customer segment before they move up the value chain. And thus being “all in” on streaming with scripted original is the wrong way for Discovery to be all in.

The lesson? You can be all in, but that can actually hurt your strategy.

Partially In, With Smart Strategy: ViacomCBS and Paramount+

Key Headlines:

Paramount Plus Debuting One Film a Week in 2022
Paramount Plus Debuting Mark Wahlberg’s Infinite in June
“Amazon Claims Without Remorse Was Most Streamed Film Its Opening Weekend”

For the most part, this film strategy is as “all in” as “all in” can get. Paramount+ is bringing Mark Wahlberg’s latest film–Infinite–straight Paramount+ and skipping theaters in June. And next year they’re doing a Netflix imitation and releasing a movie a week on the platform. 

But then you see the pesky headlines that Paramount keeps selling some films to the highest bidder. Like The Tomorrow War to Prime Video (which I discussed last week). And Paramount had just sold Without Remorse to Prime Video, which used it to “win the weekend” according to Prime Video.

Thus, Paramount is half in. They are bringing some films to Paramount+, and focused on that, but they’re still willing to sell films to the highest bidder when it suits them.

And I love it!

A company exists to maximize shareholder value. Sometimes that means launching a successful streamer, and so Paramount+ is planning to launch one film a week next year, and to bring a big Tom Cruise movie to Paramount+ this June. But sometimes maximizing value means letting other folks (drastically?) overpay for the same films. Even better, Amazon is writing the checks that will enable Paramount+ to release one film a week next year. (Plus, as I wrote last week, the theatrical slate is absolutely packed for the rest of 2021.)

Which is why I don’t like the “all in” framing. If you just use “all in” to mean “do what Netflix does”, you’re neglecting very viable, reasonable strategies to help grow your future, without going into as much debt.

I’d add, it also helps to be the production studio when you’re selling these films. Paramount green lit all these films and hoped they would all be good. But that’s unrealistic. The execs at Paramount know the winners and the losers. They’ve seen the dailies. They’ve seen the testing. If you can sell the worst films and keep the best for yourself, that’s a win-win. I hope that is what Paramount is doing, and if they are, it is brilliant.

The lesson? You can be all in on streaming, but don’t pass up smart strategic decisions.

Not All In, With Bad Strategy: Comcast, NBC Universal and Peacock

The Key Headlines

NBC Universal Has Debated Moving Sports to Streaming…Or Selling Their RSNs
NBC Let’s TNT/TBS Grab NHL Live-TV Rights
Comcast Weighs Pulling Universal Films from HBO Max/Netflix
Comcast Has Discussed a Separate Streamer from Peacock” 

In this case, the headlines all point to a company that is trying to uphold a legacy business–the cable bundle–while underinvesting in their streamer, Peacock. 

How do we explain Comcast’s strategy? Their goal is to become a corporate conglomerate giant. And if possible, a tech company, as I explained on Decider last year. They sell movies through Fandango, they have broadcast and cable through NBC Universal, they have an ad-supported streamer in Peacock, that also is subscription only. And they also have devices in the Flex. They want to be it all.

The problem is “being it all” is a tough strategy. It is the conglomerate strategy, and often that means conflicting priorities and lack of focus. Which is why conglomerates went out of vogue in the 1990s. The only reason a few massive conglomerates have returned is that we stopped enforcing industry consolidation. The current giants (Google, Amazon, and Apple in particular) are fueled by underlying monopolies/oligopolies in certain industries (search, cloud computing, phones), leveraging the profits to take over new fields.. Comcast is trying to emulate those tech giants, but they still have to worry about their core revenue/operating margin driver, which is legacy cable. (Which is also a bunch of local monopolies.)

That’s why looking at Comcast, I don’t see a focused strategy. A few months back, I praised Peacock for having a clear value proposition that could carve a niche in the streaming wars. Then Comcast makes or fails to make the right decisions to reinforce that strategy. If live sports are key to your value proposition, then why pass on the NHL? If Peacock is your future, why keep the declining regional sports network business? If Peacock is touting feature films, why debate launching another streamer with Universal films on it?

More worrying, though, is the indecision about what to do with Universal films. Of the theatrical film slates, Universal is second to Disney. And unlike Warner Bros and Disney (with Fox), Universal hasn’t clearly said they’re bringing their films to Peacock. Since it hasn’t happened yet, sure they could come to their senses and keep their most valuable IP in-house. But why even bring up the question?

In this case, yeah it isn’t clear if Comcast is “all in”, but more worrying is the general lack of focus.

The Lesson? Have a focused strategy.

Other Contenders for Most Important Story

Fox Announces Tubi Originals

Everytime I write about NuFox–my name of the pieces of Fox left after Disney bought 21st Century Fox–I have to remind myself that they still exist and have lots of channels watched by lots of people. Their future, though, lies somewhere in digital. Something they know, which is why they’ve been expanding into digital subscriptions via Fox News and free-TV via Tubi.

Like any other traditional streamer doubling down on digital, Tubi/NuFox announced they are making Tubi originals. Because of course they are. (See my Discovery commentary above!) As for the strategy, if the originals reinforce what Tubi is good at–cheap content–this is smart. If the originals are trying to compete with the Netflix, Prime Video, HBO Max and Disney’s of the world, it’s likely a bad investment.

Earnings Update

I wanted to give some quick highlights on the nearly ended earnings season by company that I may have missed. 

Youtube – Tops $6B in revenue in one quarter, which is on track to earn as much revenue as Netflix.
Sony –  They had a good quarter with films.
ViacomCBS – They aired the Super Bowl, so earnings were good.
NuFox – They didn’t have a Super Bowl so earnings were down.
IMAX – Thanks to China, they had a good quarter. But they need theaters to open!
AMC (theaters) – They had a bad quarter, obviously. But they are optimistic!
Cinemark – Same.
AMC (Networks) – Revenues are down, but they like their streaming success.

Lots of News with No News – The HFPA and the Golden Globes

You know me. I don’t think awards shows really matter in the long term scheme of things. While it is a big deal that NBC isn’t airing the Golden Globes next year–NBC pays $60 million a year to host this show–we probably shouldn’t have paid this much attention to what a hundred or so foreign journalists who are easily “influenced” thought anyways. This is the equivalent of one drama series getting cancelled, and that wouldn’t make this column, normally.

Still, you probably want more, right? The best long read on the controversy comes from Richard Rushfield. (Subscription required.)

The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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