The Hollywood Reporter - 13.11.2019

Behind the Headlines

The Report

THE HOLLYWOOD REPORTER 16 NOV EMBER 13, 2019

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A Teacher, Alex Garland’s Devs

and Jeff Bridges vehicle The Old

Man — will no longer air on the

linear network but on the dedi-

cated FX channel on CEO Randy

Freer’s st rea mer.

Other new original series

are expected to be moved

to the FX on Hulu tab,

which sources note could be

positioned similarly to how

Disney+ offers tiles promot-

ing key brands like Marvel

and Star Wars. Sources tell

THR that a third of Hulu’s

scripted originals will be

supplied by FX in 2020 and

2021. (FX and Hulu declined to
      comment.) “They’re trying to get
      people who pay for FX+ to move to
      Disney+,” says ICM Partners man-
      aging director Chris Silbermann,
      referring to the company’s bun-
      dled product of Hulu, ESPN+ and
      Disney+ for $13 a month.“They’re
      both known for high-quality

original programming, and that

should all reside in one place ulti-

mately.” (To that end, stand-alone

subscription service FX+ was shut

down in July.)

Disney and WarnerMedia’s

moves illustrate how legacy

companies are positioning

themselves for streaming

in an era when, according

to a March MPAA study,

online video subscribers

topped cable subs for the

first time as Americans

spend more than 52 per-

cent of their viewing

hours on digital hubs like

Netflix. “Hulu needs to carve a

clearer brand and create more

hit original shows,” says analyst

and former Amazon Studios head

of strategy Matthew Ball. “FX

excels at both, so bringing the two

networks together makes sense.”

Cable and satellite distributors

might not cheer the move. “The

only group that doesn’t benefit

from John Landgraf and the FX

team getting more budget and

more shows via partnership

with Hulu is pay TV providers,”

adds Ball.

The remaking of FX’s produc-

tion pipeline arrives as pay TV

providers in the U.S. lost more

than 1.3 million video subscrib-

ers in the second quarter, nearly

three times the decline from the

same period a year ago, accord-

ing to an August report from

Leichtman Research Group.

While HBO Max will be a one-

stop shop for all of WarnerMedia’s

brands, the FX on Hulu setup

further strengthens Hulu while

adding value to Disney’s stream-

ing bundle. As Iger noted Nov. 7

on CNBC, “We’ve talked a lot and

quite candidly about erosion or

sub losses. They continue, which

is all the more reason why we’re

doing what we’re doing.”

Viacom Makes ‘Aggressive’ Play to Remake Its Leadership

V

iacom and merger partner CBS made a rash

of leadership changes Nov. 11 that included

naming Chris McCarthy, the chief of MTV, VH1,

CMT and Logo, the new president of entertain-

ment and youth brands. In truth, though, the

consolidation of executives, so to speak, has been

occurring at Viacom and other conglomerates for

years, courtesy of a wave of mergers and acquisi-

tions. In some cases, top executives charged

with deciding who goes and who stays are not

even safe, such as with Wade Davis, the Viacom

CFO who will exit once ViacomCBS is created in

December. “There’s only so many C-level jobs to

go around, and you don’t need two of each,” notes

Mary Ann Halford, a senior adviser with OC&C

Strategy Consultants.

Viacom has been steadily streamlining under

CEO Bob Bakish. Comedy Central chief Kent

Alterman’s Nov. 11 exit was preceded by those

of Kevin Kay (Paramount Network), Debra Lee

(BET), Cyma Zarghami (Nickelodeon), Larry

Jones (TV Land) and Brian Philips (CMT). Now,

McCarthy will double the number of networks he

oversees, adding Paramount Network, Comedy

Central, TV Land and Smithsonian Channel to his

purview. “It’s like a game of musical chairs,” says

Halford, “only there were more chairs five years

ago than today, and they’re not coming back.”

Viacom’s latest moves confirmed that Jim

Gianopulos will stay atop Paramount Pictures

as CEO and chairman, while David Nevins, chief

creative officer of CBS and CEO of Showtime,

will add oversight of BET Networks in the shift.

And while Viacom said Nov. 8 that it is out of

the bidding for the 700-title Miramax library,

rumors swirl that after it merges with CBS it will

scoop up more content firms to help feed CBS

All Access and other digital initiatives. “It’s good

to see that ViacomCBS is being aggressive,” says

analyst Steven Birenberg of Northlake Capital

Management. “There is a real concern on Wall

Street the company is floundering, so just show-

ing that things are being realigned and ‘newco’

can hit the ground running is helpful.”

In an attempt to ‘carve a clearer brand,’ some

John Landgraf linear originals will shift to streaming first

BY LESLEY GOLDBERG

Disney’s ‘FX on Hulu’

Plan Snubs Pay TV

to Boost Digital Battle

CEO Bob Bakish culls the exec ranks as Wall Street worries about its ‘floundering’ fortunes BY PAUL BOND AND LESLEY GOLDBERG

Road Map to a Recombination

CBS Viacom

Quarterly revenue (up 10%)$3.81B $3.36B(up 4%)

Net earnings (up 10%)$440M $544M(up 4%)

Market cap $14.6B $10.6B

Source: YCharts and calendar second-quarter earnings statements; CBS and Viacom reported results Aug. 8.

W

hen WarnerMedia CEO

John Stankey unveiled

HBO Max on Oct. 29,

he also created, in his words, an

“IQ test” for consumers. For $

a month, cable subscribers can

get HBO, or, in May, access to

HBO Max, the beefed-up streamer

that will be home to shows from

the premium cable network

and a plethora of originals and

library content from across the

WarnerMedia brands.

Days later, Disney CEO Bob Iger

revealed that FX would produce

programming for Hulu, with four

originals previously earmarked

for the linear network heading to

the streamer as part of a channel

of sorts that will include scores

of FX library titles like American

Horror Story. While details on

the so-called FX on Hulu hub are

being ironed out, four of FX’s

shows — Cate Blanchett’s Mrs.

America, Kata Mara limited series

Chris McCarthy,
who runs MTV,
VH1, CMT and
Logo, now adds
oversight of
Comedy Central
and more.

Landgraf

Freer