Entertainment Disrupted: How Can Brands Save a Challenged Media Industry?
In the last few weeks of 2024, Warner Bros. Discovery announced plans to restructure its operations by mid-2025, creating two distinct divisions: ‘Global Linear Networks’ and ‘Streaming & Studios’. The Global Linear Networks division will encompass traditional cable channels such as CNN, TNT, and HGTV, focusing on maximising profitability and free cashflow to support debt reduction. The Streaming & Studios division will integrate streaming platforms like Max and Discovery+ with Warner Bros.' film and television production units, aiming to drive growth and achieve strong returns on invested capital.
This strategic reorganisation is designed to enhance WBD's flexibility in navigating the evolving media landscape and to position the company for potential future strategic opportunities, including mergers or acquisitions. The last major deal in a year of entertainment tumult only adds to the sense that the industry is in more flux than we’ve seen for a long time.
To contextualise this deal for those in marketing, as part of our ‘Entertainment Disrupted’ series with dentsu, LBB’s Alex Reeves caught up with Cathy Boxall, dentsu’s global head of entertainment.
LBB> With the recent news that Warner Bros. Discovery will split its structure into two distinct operating divisions for streaming and linear, it seems clear that entertainment companies are scrambling to find the right models. What does it point to, from your perspective?
Cathy> The HBO and Warner Brothers news is a great hook, but there’s a broader issue across the industry and marketing.
The industry is so challenged right now. Budgets are strained, layoffs are happening, and it’s really affecting content production. What we’re seeing on the sharp end with marketeers is that they’re getting an overwhelming volume of requests. Brands are being treated like a magical fountain of cash that can save the entertainment industry.
There’s a lot of talk around this, and while it’s exciting and I was signing off projects a week before Christmas, from our clients’ perspective, it’s creating chaos. It’s a bit of a wild west. Brand marketers feel overwhelmed and unsure of how to navigate it, to the point where it’s off-putting.
This is a good opportunity to address the challenge and urge the industry to be more strategic. Right now, we’re doing ourselves a disservice.
LBB> Zooming in on the Warner Bros. Discovery announcement, how do you see the specific forces at work there?
Cathy> From my perspective, it’s significant because it highlights a broader shift. They’ve streamlined their business from three core pillars into two, separating films and streaming from their networks business. This change stems from the networks pulling down their revenue reporting, which makes sense, but it reflects larger industry challenges.
Declining ad spend and subscription revenues are hitting entertainment businesses hard, impacting commissioning budgets and new content creation. Only a few years ago, we were in a “golden age of television” with huge budgets and exciting commissions. Even post-pandemic, there was an upsurge in spending. But now, it’s incredibly tough. Networks can’t commission what they want, and smaller independent producers, especially those we’ve worked with on branded entertainment, are struggling to stay afloat.
Commissioners have become risk-averse, focusing on established talent and scalable formats. At the same time, platforms that were previously unfriendly to brands are now more open, bringing in specialist teams and exploring innovative partnerships. They’re working with brands on deeper integrations, branded entertainment, and experiential activations.
For brands, this creates an exciting opportunity. Audiences increasingly avoid traditional advertising – our recent dentsu Consumer Vision study showed 61% skip or ignore ads. But 56% are more favourable to brands engaging with entertainment and games. Younger audiences are even more likely to block traditional ads.
Brands know they need to engage with culture and entertainment to grow. Meanwhile, the entertainment industry is eager for their support. This convergence offers a chance for all parties to collaborate and use brand budgets to create truly engaging entertainment properties. It’s an exciting moment, with so many possibilities opening up.
LBB> You mentioned producers and people on the production side having a hard time. How can brands help in a way that supports them while ensuring they do it the right way?
Cathy> It’s mutual – there needs to be a mindset shift on both sides to make it work. Brand marketers are used to working with creative agencies, following tight briefs with a focus on product messaging and maintaining control. It’s all about share of voice, the brand, and driving performance metrics, which makes sense given their goals.
Producers, on the other hand, are focused on creating engaging content for audiences and platforms. They think about storytelling and audience connection but often lack an understanding of what success looks like for a brand.
Both sides need to meet in the middle. Producers should think more about how their projects appeal to brands and deliver for them – not just in terms of audience and platform appeal but also in terms of business ROI. They need to adopt a brand marketer’s mindset, critically evaluating how their projects provide brand uplift, awareness, and tangible value.
For brands, it’s about moving away from complete control and focusing more on an entertainment-first mindset. They need to think about content that audiences actively seek out on platforms they already love.
One significant shift I’ve seen is marketers increasingly expecting to participate in the lifecycle of the IP they fund – sharing in revenues from licensing, international sales, and merchandising. Producers can open up opportunities by creating commercial packages that not only offer brand value but also real business ROI. That’s where the industry is heading, and more marketers are thinking this way now.
LBB> You’ve mentioned the middle ground between producers and brands – that’s kind of dentsu’s role, isn’t it?
Cathy> Exactly. And for a busy brand marketer managing their day-to-day responsibilities, this world can feel overwhelming. Clients tell us they’re constantly approached by various entertainment partners – not just producers but across the board. It’s tempting to disengage rather than take a chance on an unknown partner and hope it works out.
dentsu’s role, and what all brands need, is to act as a specialist partner. Brands need someone who understands both the business and the industry, with a proven track record of success. At dentsu, we’ve been doing this for years, delivering projects that achieve fantastic brand metrics, uplift, and business value. For example, a recent Heineken project with Amazon Prime resulted in a 78% sales increase.
We also invest in entertainment ourselves, with teams in London, LA, and Tokyo. This gives us experience creating and distributing shows, films, podcasts, and more – not just for brands but alongside them. Our job is to guide clients through this complex industry, helping them evaluate projects, define KPIs upfront, and ensure alignment across all stakeholders.
Everything we do is data-led. We’re obsessed with understanding audiences – what they watch, where they watch it, and the talent they engage with. This ensures projects are targeted, platform-appropriate, and designed to resonate.
We’re also partner-agnostic, with no vested interests. Our role is to identify the right partners and projects for each client, negotiating rights and ensuring alignment on KPIs. Every project is different, but our goal is always to navigate the complexities and deliver measurable success for our clients.
LBB> You mentioned the long-term benefits of brands owning their own IP. How do you convince brands, especially the C-suite, that this is the way to go rather than opting for cheaper, seemingly easier wins?
Cathay> One of the interesting things when talking to clients and brand marketers is the perception that entertainment projects are complicated and expensive. What’s always surprising to them is how relatively cost-effective it actually is to produce their own IP, especially when compared to a standard TV commercial or ad.
When you factor in the costs of pushing traditional ads across various platforms, creating branded entertainment can be incredibly cost-efficient. Even in challenging times, with a heavy focus on ROI, owning and producing your own IP offers strong returns.
We’ve seen this firsthand with projects like the one we did for Channel 4 and Land Rover. It started in the UK and eventually sold into 48 international markets. In the UK alone, the ROI was five-to-one compared to the production spend. That’s before factoring in the value of international distribution, which the brand owned outright.
It’s about showing clients that the perception of complexity and high costs doesn’t hold up. With the right approach, producing your own IP can be a very cost-effective and impactful marketing strategy.
LBB> A lot of this ties back to what we discussed earlier – legacy broadcasters and even newer streamers are looking for innovative ways to generate revenue, and they’re increasingly partnering with brands that can provide content for their platforms.
Cathy> Absolutely. What’s exciting is the increased flexibility across the board. Almost every platform and partner has a different model right now, which we guide our clients through, but everyone is leaning into innovation. Platforms are breaking down silos, bringing commercial and creative teams together to create exciting opportunities for brands.
From a brand perspective, this is ideal. You want innovative commercial models where you can leverage your media spend, not just for creative campaigns but across multiple facets of the business. A successful entertainment project should touch every element of a brand’s ecosystem, placing it at the heart of everything.
Having platforms and partners who work in an integrated way – leveraging media budgets, creative ideas, and data – opens up enormous opportunities. It’s an exciting time for brands, but it’s also a complex landscape with a lot of opportunities to navigate.
It’s a difficult time, and that difficulty is forcing innovation. People are being pushed into new commercial models and accelerated innovation, which is ultimately good for everyone – producers, partners, and brands. Eventually, it will become a great story, but right now, everyone’s finding their feet. It’s a bit of a bun fight, with everyone piling onto the brands.
It’s really hard for both sides. Producers and creative folks are having a horrible time. Brands feel overwhelmed – they know they need to engage with entertainment, but they don’t know how. We’re in the middle, saying, “It’s doable.” We’ve done it many times, very successfully. There’s a process: work with the right people, get into the right mindset, think about ROI, measurement, strategy, and audience-first data. If you do that, there’s a clear path through.
