By Mark Seavy  

For years, cable and network TV shows were a go-to for licensees seeking to capitalize on the beloved children’s programming on Cartoon Network and Nickelodeon or the massive popularity of shows like Friends and Seinfeld.  

And while many of those same shows have experienced a resurgence in recent years thanks to streaming services, media giants are reporting multi-billion-dollar write downs of their TV and cable assets. As a result, strategies around entertainment licensing are changing.  

For example, Paramount Global ($5.98 billion) and Warner Bros. Discovery ($9.71 billion) took write downs of linear TV and cable assets against Q2 earnings amid a sharp drop in their value.  

Warner Bros. Discovery also announced plans to shut down the Cartoon Network website that launched in 1998 and was home to the likes of Steven Universe, Adventure Time, and others. Cartoon Network shows will still be available through the Max streaming service as well as connected TV platforms like Roku, Apple TV, and Amazon. It is also shutting down the Boomerang streamer that offered Scooby Doo, Tom & Jerry, Looney Tunes, and others effective September 30. 

Paramount announced it was preparing to cut 15% of its global workforce on top of the 3% reduction previously announced in February. The layoffs come as Paramount is poised to complete its $8-billion merger with Skydance in September. 

“The set of assets that make up Paramount Global today were built up through the rise of linear [TV],” Paramount CEO Brian Robbins said during a conference call with analysts. “While we have strong brands and businesses, we must reshape our portfolio to best compete in the future. The assets under consideration are undeniably strong with exciting futures ahead but will be better served on their own or as a centerpiece of another business.” 

This restructuring had long been expected as the number of cable subscribers waned, and streaming services and theatrical films became the focal point for studios. Warner Bros. Discovery lost 300,000 U.S. subscribers on Max to end Q2 with 52.4 million subscribers in the region, while internationally it hit 50.8 million (up by 3.9 million). Paramount Global’s Paramount+ service gained 3.7 million subscribers to end Q2 with 71 million. 

Licensees, for their part, long anticipated these changes and responded by deepening their reliance on evergreen properties; mining the streaming services for surprise hits like Stranger Things, Ted Lasso, and Squid Game; and scouring YouTube and social media for new content. 

“There is nothing that’s on cable TV that you can’t get find streaming somewhere,” former Funko executive Derrick Baca said. “Gen X may well be the last ones that care about watching network TV or cable because the younger generations couldn’t care less.” 

The same doesn’t hold true for theatrical films, although the number of movies that aren’t sequels or spin-offs and feature new characters for licensing appears to be shrinking. And though there is concern that consumers are growing tired of constantly seeing the same stories on the big screen, the recent feature film Deadpool & Wolverine topped $1 billion in global box office revenue and inspired a significant licensed consumer products program. There is also hope for Beetlejuice 2, which is being released in September and for which licensed product is already available. 

“There is a lot of content out and it is agnostic—it doesn’t matter if it is coming from streaming, YouTube, or a TV show that becomes hot 25 years removed from its heyday,” an apparel licensing executive said. “It doesn’t matter now because, with streaming, it is content that lives forever.”