1. Read the case, keeping in mind the textbook topic(s) the case covers 2. Read the Case Analysis section of the textbook 3. Written Document a. Provide a BRIEF description of the situation b. Update the situation to today(2025) using library and/or online resources (the company web site is a great place to start) i. This means to take into consideration the geo-political and economic environment the firm is operating in NOW. ii. Compare and contrast now vs. when the case takes place c. Cite sources of data not included in the case, using APA format i. Use at least TWO peer-reviewed articles ii. Do NOT rely solely on what you know about the company iii. Other credible sources are: WSI NYT Wash Post The Guardian, the firm's web site and 10K filings (if pub Meet the new Teams video d. Answer the questions at the end of the case if any, in light of the topic of the chapter e. DO NOT spend more than 1/3 to 1/5 a page describing the situation. f. No more than 3 pages, excluding References and Cover Page. 4. Presentation a. No more than 15 minutes. b. 5-7 slides, including the introductory slide C. Address the important facts, decisions, recommendations d. If there is a recommendation needed, make one and justify it using analysis of facts. 5. Your written analysis and your oral presentation should be the same, with the written document providing more detail. 6. Who is your audience? Not Me. Your audience is middle and upper level management of the firm in question. 7. Who are you? An up-and-coming Management trainee who has been tasked with helping the firm to understand the situation in the case. 8:56 W a Disney+ subscription price; Iger said the new app would provide greater opportunities for advertisers while giving bundles of subscribers access to more robust and streamlined content, resulting in greater audience engagement and a more unified streaming experience. The rollout of the one-app offering was to begin by year-end 2023; plans were to increase the one app subscription price for the ad-free tier to bet- ter reflect the added value of the content offering. As of April 1, 2023, the number of paid Hulu subscrib was approximately 48.2 million. ers According to research by Wells Fargo, in 2022 the Walt Disney Co. spent $33 billion on content across all of its operations. However, as part of a Disney-wide $5.5 billion cost-cutting initiative that began in 2023, expenditures for new content at Disney+ were being cut back. Warner Bros. Discovery and HBO Max On April 8, 2022, Discovery, Inc. completed its merger with the WarnerMedia business of AT&T Inc. and changed its name to Warner Bros. Discovery, Inc. (WBD). The merger created a global media and entertainment company that included Warner Bros. Pictures Group: Warner Bros. Television Group; DC Comics; a host of cable channels (HBO, Discovery Channel, CNN, HGTV, Food Network, TNT, TBS TLC, OWN, Cartoon Network, truTV, Magnolia Channel, Travel Channel, Science Channel) direct to-consumer streaming series (HBO Max and discov ery+), and Warner Bros. Games WBD had 2022 revenues of $33.8 billion and beginning in 2023 was organized into three operating segments: Studios-This segment primarily consisted of (1) the production and release of feature films for initial exhibition in theaters; (2) the production and initial licensing of television programs to third parties, WBD cable networks, and the com- pany's streaming services/DTC services; and (3) the distribution of films and television programs to various third-party and internal television and streaming services, distribution through the home entertainment market (physical and digital). related consumer products and themed experi- ence licensing, and interactive gaming. Networks-This segment primarily consisted of WBD's domestic and international television networks. N Vol 87% Direct-to-consumer-The DTC segment consisted of WBD's premium pay-TV (HBO) and HBO Max and Discovery+ streaming services. Al year-end 2022, WBD had 96.1 million DTC subscribers. In March 2023, HBO Max had two subscription plans: HBO Max (no ads) $15.99 per month or $149.99 per year and HBO Max (with ads) $9.99 per month or $99.99 per year. Discovery+ had a subscription price of $$4.99 per month with ads and $6.99 per month ad-free. In April 2023, WBD announced that it was merging HBO Max and Discovery and rebranding the merged streaming service as "Max." The new Max debuted on May 23, 2023, with a broader range of content that included HBO Originals, Warner Bros. films, Max Originals, the DC universe, the Wizarding World of Harry Potter, an expansive offer ing of kids content, and best-in-class programming across food, home, reality, lifestyle, and documen taries from cable channels HGTV, Food Network, Discovery Channel, TLC (The Learning Channel), Adult Swim, and Investigation Discovery. Newly announced titles included a Max Original Harry Potter series, a Max Original comedy series derived from The Big Bang Theory, an HBO Original "Game of Thrones" prequel A Knight of the Seven Kingdoms The Hedge Knight, a Max Original drama series based on The Conjuring films, Magnolia Network's Fixer Upper: The Hotel. Discovery Channel's Surve the Raft, Max Original Peter & the Wag and Cartoon Network's Ty Toons Looniversity According to Wells Fargo research, WBD planned to spend $22.4 billion in 2022 on content (including sports). Max had three subscription plans: • Max Ad-Lite for $9.99 per month or $99.99 per year. This Plan allowed 2 concurrent streams 1080p resolution, no offline downloads, and 5.1 surround sound quality. Max Ad Free for $15.99 per month or $149.99 per year. This plan allowed 2 concurrent streams, 1080p resolution, 30 offline downloads, and 5.1 surround sound quality. Max Ultimate Ad Free for $19.99 per month or $199.99 per year. This plan allowed 4 concurrent streams, up to 4K UHD resolution, 100 offline downloads, and Dolby Atmos sound quality. In the April 2023 announcement, WBD said that existing HBO Max subscribers would have access to PART 2 Cases in Crating and Executing Strategy Max for the same HBO Max subscription price and the existing features of their pan would remain avail able for at least six months. WBD had spent much of 2022 removing pro- gramming on HBO Max that was bought from out- side content providers and returning it to the studios that made the programs (in an effort to reduce costs and free funds for reducing its almost $50 billion in long-term debt). It also purged titles shown on HBO Max that were from WBD's own content librar- ies (such as Westworld, Minx, The Nevers, Raised by Wolves, FBoy Island, Legendary, Finding Magic Mike, Head of the Class, Gordita Chronicles, Love Life. The Garcias, Made for Love, and The Time Traveler's Wife) that could readily be used to generate revenues from licensing to other cable channels or licensed to free ad-supported streamers like Pluto TV, Amazon's Freevee, Tubi, XUMO, and the Roku Channel that shared some of the advertising revenues such shows generated with the content provider. Some industry analysts speculated that WBD might use content from HBO's vast library of TV shows and films to create its own free ad-supported streaming channel or as a Max ad-free subscription plan as a means of new revenue generation Comcast, NBC Universal, and the Peacock Streaming Service In January 2020, Comcast and its subsidiary NBCUniversal, jointly announced the launch of a new Peacock subscription video streaming service that would become available at no additional cost for Comcast's cable subscribers on April 15 and then launch July 15 for everyone else. Up until March 2023, there was a free ad-supported tier of Peacock (Peacock TV Free) that contained more than 13,000 hours of ad-supported programming including next- day access to first season TV shows broadcast on NBC, a collection of Universal movies, and access to back seasons of such iconic NBC shows as Saturday Night Live, Family Movie Night, and Vault. However, beginning in March 2023, Peacock stopped offering the free tier to new subscribers and began offering only two subscription plans: a Premium $4.99 per month or $49.99 per year plan that included ads and a Premium Plus $9.99 per month or $99.99 per year plan with no advertising. The Premium version included New & Hit Shows, Films and Originals, LIVE Sports & Events, current NBC & Bravo Shows, and 50+ Always-On Channels. The Premium Plus plan included everything available with Premium, no ads, the ability to download and watch select titles offline, and access to the subscriber's local NBC channel, live and 24/7. Comcast's cable subscribers continued to receive Peacock programming at no charge. Comcast management decided to use NBC's familiar peacock logo as the logo for the Peacock streaming service to remind customers that NBC was a network with great TV shows and live sports programming. Top management at Comcast and NBCUniversal believed that while streamed video might indeed be the future of watching TV and mov ies, the cable business would remain profitable for years to come (despite the likely permanent and hopefully slow declines in the number of cable and satellite subscribers worldwide) and, further, that free ad-supported viewing was likely to remain far more prevalent and popular with consumers than subscription-supported viewing Further. Comcast management was attracted to bundling Peacock Free for customers with Comcast cable subscriptions as a means of helping reduce the number of customers dropping the company's cable service and switchi to one or more rival streaming providers whose were less than Comcast's monthly cable subs plans. In their mind, there was no good busi son to create a streaming platform with feat fees that would undercut the profitability and ity of company's cable business. Comcast was a leading provider of Xi branded broadband, video, voice, wireless, home security, and other services to 31.8 million residen- tial customers (year-end 2022) at various locations in the United States, and it also provided an assortment of services to 2.5 million business customers (year end 2022). NBCUniversal (NBCU), a 100-percent owned subsidiary acquired in 2011 and 2013 trans- actions, owned the NBC broadcasting network (with more than 200 affiliated stations), the Spanish- language Telemundo broadcasting network (with) 111 affiliated stations), 11 NBC-affiliated and 30 Telemundo-affliated local broadcast television sta- tions, a portfolio of cable networks (USA Network, E!, Bravo, MSNBC, CNBC, NBC Sports, Golf Channel, Oxygen, Syfy, Universal Kids, Universo, CNBC World, and an assortment of regional and international cable networks), the Peacock stream- ing service, a number of movie and TV production ||| О ୮