According to CEO David Zaslav, the recent bloodbaths across Warner Bros. Discovery’s various studios were the result of his goal to “restructure” the company and revamp its “deeply flawed” – in other words, unprofitable – content strategy.
Zaslav offered his insight on WBD’s newfound direction during their 2022 Q3 earnings call on November 3rd.
“Amid a more challenging economic environment, a significant amount of change is required,” the CEO told investors after reporting a third-quarter loss of $2.31 billion. “It’s messy, it’s challenging, it’s taken real courage to restructure this company.”
Speaking to his controversial cutting of various projects, such as Batgirl, Full Frontal with Samantha Bee, and Scoob! Holiday Haunt, Zaslav bluntly explained, “Content is the heart of everything we do and we are investing at historic levels [but] it’s no longer about how much, but how good.”
“And ultimately, it is the consumer that tells us what’s good,” he added.
Laying out his view of the company’s current situation, Zaslav then asserted, “Let’s face it. The strategy to collapse all windows, starve linear [television] and theatrical and spend money with abandon while making a fraction in return – all in the service of growing sub numbers – has ultimately proven, in our view, to be deeply flawed.”
“One thing [that doesn’t work for us] is spending a billion dollars while collapsing a motion picture window into a streaming service,” he said. “The movies that we launch into the theater do significantly better. Launching a two hour, an hour and fourty minute movie direct to streaming has done almost nothing for HBO Max in terms of viewership, retention, or love of the service.
Later addressing his outlook on the company’s television offerings, Zaslav assured investors that “we’re very committed to scripted, but we want to measure what people are watching and what they’re not.”
“If a repeat of Two and a Half Men or Big Bang Theory does three times the ratings of a brand new show [or] another season that we greenlit of a show that’s costing us seven and a half million dollars, we’re going to cancel that show.”
“[Then] we’re going to try and get another scripted series that has a chance to really deliver and delight and engage an audience,” he declared. “But we are being deliberate about measuring how the shows are doing.”
Ultimately, Zaslav explicitly clarified that “We did not get rid of any show that was helping us, and we got rid of those shows so that we could focus on producing new content that will.”
“It’s a business of failure,” concluded the CEO, “but we’d rather take that money and spend it again and have a chance of having a show that will engage and delight on either our traditional platforms or our subscription platforms.”
WBD’s next major cinematic release, Magic Mike’s Last Dance, is expected in theaters on January 13th, 2023.