(Reuters) - Warner Bros Discovery Inc has reached deals with streaming services Roku Inc and Fox Corp's Tubi to license 2,000 hours of movies and TV series, as it becomes the latest media company to embrace free, ad-supported streaming TV.
The deals include the science-fiction western “Westworld,” the reality series “Cake Boss,” and reality dating series “F-Boy Island", the companies said, as Warner Bros seeks new ways to monetize its library of film and TV content.
The streamers announced Tuesday they plan to use the content to launch Warner Bros-branded free, ad-supported TV (or FAST) channels.
Tubi said it plans 11 channels organized by genre, such as "WB TV Sweet Escapes," to feature baking competitions, and three more organized by type of programming - series, reality and family.
The deal marks an evolution of Warner Bros Discovery's approach to streaming, which once reserved the studio's movies and series for the HBO Max subscription service. Now, the studio has begun selling movies and TV shows to third parties.
For the first nine months of 2022, Warner Bros Discovery's streaming business, which includes HBO Max, lost $1.38 billion.
The studio is seeking to capitalize on a growing segment of the streaming universe, which industry executives see as complementing subscription streaming services. One researcher, nScreen Media, estimates ad revenue on FAST channels could reach $4.1 billion this year.
"It is the fastest growing segment of the viewing economy," said Evan Shapiro, a veteran television executive. "There are people who think it’s basically going to eclipse cable before too long."
AMC Networks Inc, Comcast Corp's NBCUniversal and the National Hockey League have launched FAST channels over the last year.
The FAST channels are consistent with Zaslav's desire to license the studio's content more broadly, say people familiar with the matter, and mine its deep library of film and television content to generate cash.
Zaslav told investors the company plans to "aggressively" tackle ad-supported streaming with its own FAST streaming service in the mold of Paramount Global's Pluto TV.
"We have a unique opportunity to increase our addressable market and drive value, and we intend to move quickly," he said during the November quarterly investor call. "Stay tuned."
As of September, Warner Bros Discovery said it had 94.9 million combined subscribers across its HBO Max and Discovery+ streaming services, far fewer than Netflix Inc or Walt Disney Co.
The media company continues to invest in technology, content and promotions, even as it reports losses associated with a restructuring and writedowns tied to the merger.
(Reporting by Dawn Chmielewski in Los Angeles; Editing by Lincoln Feast)