Lawmakers Voice Antitrust Concerns Over Pending Disney, Fox, Warner Bros. Discovery Sports App

U.S. House of Representatives Jerry Nadler (D-NY), ranking member, House Judiciary Committee, and Rep. Joaquin Castro (D-TX) April 16 sent a letter to Disney CEO Bob Iger, Fox CEO Lachlan Murdoch and David Zaslav, CEO of Warner Bros. Discovery, citing concerns of possible negative consumer impact and anti-competitive behavior as a result of their sports streaming app Joint Venture.

Jerrold “Jerry” Nadler

Citing recent comments by Disney CFO Hugh Johnson, who said his company, Fox and WBD collectively control 80% of the consumer access to major live sports on television, the lawmakers wondered how the companies’ proposed sports app joint venture would impact consumers’ streaming access to major sports going forward.

“Without more complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors,” Nadler and Castro wrote in their letter.

Among the 18 questions submitted by the lawmakers were: what consumer markets would be affected by the joint venture; the app’s projected subscriber numbers; whether the app would distribute non-partner content; how the pricing of Fox Sports, ESPN, TBS, etc., included in the app would compare with their access on pay-TV; and if the the JV would offer stand-alone streaming sports services, among other issues.

Joaquin Castro

“The Joint Venture raises questions about how this new offering would affect access, competition, and choice in the sports streaming market,” Nadler and Castro wrote. “Without more complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors.”

The lawmakers said they want the CEOs to answer by no later than April 30, with their responses copied to the Department of Justice.

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Veteran WBD Executive Adria Alpert Romm to Retire in June; Jennifer Remling Tapped as New Chief People and Culture Officer

Warner Bros. Discovery on Oct. 31 announced that Chief People and Culture Officer Adria Alpert Romm, a longtime partner and trusted advisor to CEO David Zaslav, will step down at the end of June.

She will be succeeded by WPP’s Global Chief People Officer, Jennifer Remling, who will join the company in January and will report to Zaslav.  
 
After more than four decades serving in key human resources roles at NBCUniversal, Discovery, and Warner Bros. Discovery, Alpert Romm has announced that she plans to retire. 
 
“I have been incredibly fortunate to have Adria by my side for more than 30 years as one of my closest advisors,” Zaslav said in a statement. “A strong people culture is critical to any successful company and Adria has fought every day to put employees first, and, through her years of stellar leadership and innovation, she has ensured that our company has always been the gold standard in talent acquisition as well as employee development and wellness – she is the absolute best in the business.” 
 
Zaslav continued: “While Jennifer has big shoes to fill, she is exceptionally talented and highly respected in her own right, having led large-scale HR teams in support of complex global organizations with tens of thousands of employees. The lasting impact she’s made at WPP underscores her strong support of employee development and DEI initiatives as well as her clear commitment to creating a positive and nurturing workplace environment. We couldn’t be more excited to have her join our leadership team.” 
 
Alpert Romm, according to a WBD news release, “played a key role in building Discovery from a handful of domestic cable networks into a global media juggernaut, including the acquisition of Scripps Networks Interactive in 2018 and culminating in the acquisition and integration of AT&T’s WarnerMedia in 2022. While at Discovery and most recently at WBD, Alpert Romm implemented several employee development and wellness initiatives, including the establishment and expansion of industry-leading wellness centers and on-site daycare facilities globally, which have reinforced the company’s reputation as a best place to work as measured by Fortune, Working Mother Magazine, and others. Alpert Romm has been an active champion of DEI development programs and has served for many years on the board of directors for the Emma Bowen Foundation and continues to support global mentoring and internship programs designed to build a more robust and diverse talent pipeline. She has also been a passionate supporter of company community outreach programs, including her signature TLC’s Say Yes to the Prom initiative, which Alpert Romm created as a single employee giveback event in 2012 and has since grown into a nationwide tour benefiting thousands of deserving high school students across the country annually.”

Remling has more than 20 years of human resources, talent acquisition and development experience, most recently as Global Chief People Officer for WPP, the largest marketing services company in the world with 115,000 employees across more than 100 countries. Previously, Remling held the same role at GroupM, WPP’s media investment group, and before that was Global Chief Talent Officer at Essence, whose workforce grew by 40% during her tenure as it opened 18 new offices worldwide. Prior to Essence, Remling spent nearly four years as the Global SVP of Talent at R/GA. She also has held senior roles at WPP’s AKQA as well as 360i and Sapient. 

WBD CEO: Max Looking to Bundle Sports, Third-Party Content, Including AMC Networks Shows

Warner Bros. Discovery’s Max streaming platform is looking to expand its content offering beyond Warner Bros. Pictures’ movies and TV shows, HBO and Discovery reality programming.

The platform is incorporating the rebooted CNN Max live news offering as well as AMC Networks digital programming. Up next is sports content, including live games, according to CEO David Zaslav.

Speaking at this week’s Goldman Sachs Communacopia & Technology Conference Conference in San Francisco, Zaslav said he believes the future of streaming video is bundling similar and competing platforms to activate a quicker consumer transition to streaming by creating more value.

Two weeks ago, AMC Networks and Warner Bros. Discovery partnered to put all of AMC’s original content such as “Fear the Walking Dead,” “Dark Winds” and “Interview with the Vampire,” among other shows, on Max for the next 60 days.

“Let’s see whether that helps grow AMC’s direct to consumer product,” Zaslav said.

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WBD has linear and digital rights to college basketball’s national championship “March Madness” tournament and the NHL well into the 2030s. The company has MLB rights until 2028 and NBA rights through 2025.

“The ability to recapture audience on digital with no incremental course of sports rights is quite attractive,” Zaslav said. “We own our content in a way that we think we can make money. It’s not going to make sense to do a deal for anything and jeopardize the economic trend we have at this company in order to own another piece of IP.”

Warner Bros. Discovery CEO Eyeing Fall ‘Barbie’ Release on Max Streaming Platform

With Barbie smashing theatrical records on a daily basis, the blockbuster is primed to reach $1 billion in global theatrical revenue just three weeks after its debut. With that strong of a start, the movie’s theatrical window could last well beyond the studio’s “Barbie Summer” marketing campaign, even rivaling Paramount Pictures’ Top Gun: Maverick theatrical marathon at 219 days.

Yet, speaking on the Aug. 3 fiscal call, Warner Bros. Discovery CEO David Zaslav, a champion of the traditional theatrical window, suggested Barbie could reach the Max streaming platform by the fall, after the movie’s higher-margin premium VOD window.

Barbie is really important to us,” Zaslav said, adding that he and the studio continue to embrace the motion picture window enabling Barbie to sell as many tickets as possible to moviegoers before transitioning to alternative distribution channels such as the premium VOD window, lower-priced transactional VOD and packaged media.

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How long that box office window remains open for Barbie remains to be seen. The traditional 90-day window has been shortened to 45 days or less by most studios, with Universal Pictures transitioning some titles into retail channels as soon as 15 days after their theatrical release depending on ticket sales.

“Take it through these windows of economics that have worked forever, and we think work extremely well, and then put it on Max,” Zaslav said. “When it goes on Max, we think it will have a very good impact, and that will be in the fall.”

Warner Bros. Discovery CEO Zaslav: We Had Fiscal Bleeders in HBO Max, Motion Pictures

When media executive David Zaslav last year took over operational control of the former WarnerMedia as CEO of the upstart Warner Bros. Discovery, he says he found himself with two high-profile money losing operations: streaming service HBO Max and the motion picture group, which includes Warner Bros. Pictures.

Speaking May 18 at the MoffettNathanson’s Inaugural Technology, Media, and Telecom Conference in New York, Zaslav said he was perplexed how a household pay-TV brand such as HBO could go from generating $2.5 billion operating profit from 2015 to 2019, to losing hundreds of millions of dollars.

Zaslav said management also assumed that the streaming services would have another 100 million to 150 million subscribers, and that the biggest challenge would figuring out what to do with upwards of 40% of the “greatest IP in the world.”

In reality, the streaming subscriber base is a fraction of that when excluding HBO pay-TV subscribers.

“It’s hard to run a company successfully when you have a real bleeder, when you have a business that’s losing money and you don’t have your hands around it,” Zaslav said.

The motion picture business went from making money for 25 years for Warner Bros. to “losing lots of money,” he said.

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Fast-forward to the present and the executive said Max generated $50 million in operating income in the first quarter, with the direct-to-consumer business segment set to be profitable a year ahead of schedule. HBO Max will formally change its platform name to Max on May 23.

“Now, we have a DTC business that’s making money,” Zaslav said, adding that to turn around the business, the strategy of releasing original movies on Max had to be stopped. The move to streaming first began in 2021 during the pandemic when shuttered theaters resulted in Warner Bros. releasing its entire theatrical slate concurrently on Max.

“It didn’t reduce [subscriber] churn, didn’t increase subscribers, [and] it also reduced the quality of the product,” Zaslav said. “The quality of the movies done [exclusively for Max] were really not that good. And we’ve would out of that now.”

The highest-profile Max exclusive movie casualty was Warner’s surprising decision to write off its $90 million Batgirl feature, starring Leslie Grace in the title role, with Michael Keaton reprising his Batman role.

“The decision to not release Batgirl reflects our leadership’s strategic shift as it relates to the DC universe and HBO Max,” WBD said in a media statement at the time.

In addition to that controversial move, Zaslav hired James Gunn and Peter Safran as co-CEOs of the revamped DC Comics business unit to help the venerable superhero brand try and emulate the theatrical success of rival Marvel Studios at Disney.

Gunn, who has penned a new “Superman” script, wrote and directed Marvel Studios’ Guardians of the Galaxy Vol. 3, which is currently in theaters.

Zaslav has high hopes for upcoming theatrical releases The Flash, Barbie, Meg 2: The Trench, Blue Beetle, The Nun 2, Dune: Part 2, Wonka and Aquaman and the Lost Kingdom. 

The April release of Evil Dead Rise, another scratched Max movie exclusive, which moved to theatrical, has paid off, generating more than $132 million at the global box office thus far.

“I think we’ve made the turn,” Zaslav said. “All of our businesses are making money, with the exception of the motion picture business, but I think we are making that turn now. That’s a big deal.”

Warner Bros. Discovery CEO Zaslav: HBO Max Is ‘Not Particularly Good’ Right Now

Warner Bros. Discovery CEO David Zaslav continues to aggressively clean house while cheerleading about the upstart media giant’s content IP and distribution channels.

While media reports publicize ongoing movie and TV show cancelations, along with layoffs at Warner, Zaslav says the noise has only redoubled his desire to make the company more efficient and accretive to shareholders through free cash flow and higher stock valuation, while also exploiting what he characterizes amounts to 40% of all Hollywood content.

Speaking Nov. 15 at the RBC Capital Markets 2022 Technology, Internet, Media and Telecommunications Conference, Zaslav pulled no punches in describing the “illogical” decision among some studios to collapse the theatrical window in favor of streaming.

He contends that a ‘B’ movie released theatrically performs five times better than it does if it is released directly to a streaming service. Zaslav says there remains an ecosystem of economic return in the theatrical window, unlike streaming, adding that former company WarnerMedia’s 2021 strategy of simultaneously releasing all theatrical movies on HBO Max was largely an attempt to generate subscribers.

“We’re not doing that [anymore],” he said. “Subscribers today are like clicks in the 1990s. We want real subs that are going to pay real money. We’re not collapsing businesses [i.e., theatrical] because we are a diverse company. Optionality and the ability to move content around [different distribution channels] is one of the greatest opportunities of this company.”

WBD plans to launch a hybrid Max/Discovery+ subscription service next spring that will also feature ad-supported options. In addition, mindful of the success of AVOD pioneers Pluto TV and Tubi, Zaslav contends WBD can create a similar service (using the Warner Bros. shield logo as marketing) stocked with Warner Bros. Television catalog shows, rather than licensing third-party content. The television production unit is the largest in Hollywood, generating around 100 shows currently in production, according to Zaslav.

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“We recognize that there’s a huge number of people in every country that aren’t going to pay [for a subscription streaming service],” he said. “That will position us, in terms of aggregating an audience, better than anybody.”

The CEO said that while 60% of HBO’s content is not consumed, much of Discovery’s programming is consumed during the day in homes as background entertainment, resulting in lower subscriber churn and higher demand — especially in Europe.

“We have a platform [HBO Max] that’s not particularly good [right now], that will be merging with a new platform [Discovery+] that is going to be much better, much more user-friendly,” Zaslav said. “It’s taken a lot of courage. It’s taken vision for what we think we can be and who we want to be. And we’re going to be wrong about a lot of it, but when we emerge next year, it’s going to be the company we believe in.”

HBO, HBO Max and Discovery+ ended the most-recent fiscal period (ended Sept. 30) with almost 95 million combined subscribers.

Hybrid Discovery+/HBO Max Service Moves Up Launch to Spring 2023 — at a Likely Higher Price

Warner Bros. Discovery has moved up the launch of a hybrid HBO Max/Discovery+ streaming platform from summer 2023 to next spring.

Speaking during a Nov. 3 fiscal call, CEO David Zaslav said internal teams have been busy reconfiguring the separate platforms into a pending unified service that could appeal to multiple end users.

Specifically, Zaslav said streaming teams have been working on fixes to existing perceived Max shortcomings, including the lack of content recommendations at the end of a movie or show.

“An obvious way to drive further user engagement,” he said. “We are already starting rolling [recommendations] out and are already seeing promising engagement uplift.”

CEO David Zaslav

JB Perrette, CEO/president of Warner Bros. Discovery global streaming and interactive entertainment, said pricing on the new hybrid service is one of several aspects that makes management “particularly optimistic” about the services’ synergies going forward.

Indeed, Perrette said that by 2023 HBO Max would not have raised monthly prices since its launch in 2020 — a fact he says represents an opportunity in the current economic environment. In addition, he said international revenue per user is “meaningfully” lower than the market leaders.

“And for us, that spells opportunity and an ability [to raise prices] as the new product comes to market,” he said.

JB Perrette

HBO Max is currently priced at $14.99 monthly without ads, and $9.99 with advertising. Discovery+ is priced at $4.99 with ads, and $6.99 without commercials.

Separately, Zaslav said the company has already begun experimenting with bringing some Discovery+ content onto the Max platform, including select Magnolia Network shows such as “Fixer Upper: The Castle,” which he said was a top five show after only a few days on Max.

“These early [tests] bolster our strategic thesis that the two content offerings [Max and discovery+] work well together,” he said. “And when combined, should drive greater engagement, lower churn, and higher lifetime customer value.”

Warner Bros. Discovery is eyeing $1 billion in pre-tax earnings in streaming by 2023.

“I believe the grand experiment chasing subs at any cost is over,” Zaslav said. “Let’s face it, the strategy to collapse all windows, starve linear TV and theatrical, and spend money with abandon while making a fraction in return, all in the service of sub numbers, has ultimately proven, in our view, to be deeply flawed.”

Instead, the CEO believes that Warner Bros. Discovery, working internally as a single company, can do a better job determining what content people are watching, and what are they not watching.

His comments come as the company has irked some observers by removing select programs from distribution and production across Warner Bros., Turner and HBO. Indeed, Casey Bloys, newly appointed chairman/CEO of HBO and HBO Max, has been tasked with restructuring HBO, including analyzing all content on the platform. The analysis led to the departure of 37 programs from the platform and $825 million in fiscal write-downs.

“We didn’t take one show off a platform that was going to help us in any way,” Zaslav said. “It was going to help us to get [those programs] off the platform, so we could now invest in, with the knowledge of what is working, and replace those shows with content that has a chance to be more successful, have a larger audience.”

Warner Bros. Discovery Eyeing Launch of FAST Channels Streaming Platform in 2023 Featuring Catalog Content

Witnessing the success of Paramount Global’s Pluto TV, and Fox Entertainment’s Tubi service, Warner Bros. Discovery wants in on the AVOD/FAST bandwagon.

The media giant plans to launch an AVOD/FAST streaming service in 2023 where catalog TV shows and some originals could resonate with viewers while driving incremental advertising revenue.

Speaking on a Nov. 3 fiscal call, CEO David Zaslav said the platform underscores the company’s ability to appeal to consumers across all distribution channels, while maximizing the overall value of content through an omnichannel distribution and monetization strategy.

“The fact is, we cover more surface area than any other media company,” he said. “And that optionality allows us to distribute content in multiple ways. We have a unique opportunity to increase our addressable market and drive real value.”

With rivals Pluto TV and Tubi ramping up monthly viewership into the millions, and Tubi streaming hours topping 1.3 billion in the most-recent fiscal quarter, in addition to ad revenue surpassing legacy Fox Entertainment linear TV, Zaslav contends replicating that AVOD strategy within the Warner Bros. Discovery ecosystem is a no brainer.

Specifically, Zaslav wondered why entire libraries of some shows are on and paid-for by HBO Max, when in reality only about 15 to 20 series are actually appealing to subscribers.

“If none of [some catalog shows] is being used [on Max], why aren’t we putting it on an AVOD [service] where it will be used?” he asked. “We looked at what people are watching on Pluto and Tubi: They’re loving ‘Rawhide’ and ‘Bonanza.’ They’re not watching old series like [the original] ‘Dynasty’ on Max. There is a platform where people have an expectation and what they want to watch, and we’ve been able to get a real vision into what people are consuming and ultimately that gives us a roadmap [into AVOD].”

WBD: Discovery+, HBO, HBO Max Added 2.8M Combined Q3 Subs to Top 94.9 Million

Warner Bros. Discovery Nov. 3 disclosed it added 2.8 million subscribers across its branded Discovery+, HBO and HBO Max platforms in the third quarter, ended Sept. 30 — upping its total subscriber base to 94.5 million. The tally is up 15 million subs from the previous-year period.

The media giant ended the quarter with 53.5 million domestic subscribers, and 41.4 million international subs. That compared with 48.9 million domestic subs and 31.1 million international subs in the prior year period.

Total direct-to-consumer revenue dropped almost 8% to $2.3 billion from pro-forma revenue of $2.5 billion last year. In addition, the operating loss ballooned to $634 million compared to a pro-forma operating loss of $309 million a year earlier.

In a statement, CEO David Zaslav said WBD continues to re-imagine and transform the organization for the future, while driving synergy enterprise-wide, increasing targeted savings to at least $3.5 billion, and making additional progress on the combined DTC product, which includes combining the Discovery+ and HBO Max SVOD services by Spring 2023.

“While we have lots more work to do, and there are some difficult decisions still to be made, we have total conviction in the opportunity ahead,” Zaslav said.

Warner Bros. Discovery Names Industry Veterans James Gunn, Peter Safran Co-Chairmen/CEOs of DC Studios

Industry veterans James Gunn and Peter Safran have been appointed to the new roles of co-chairmen/CEOs of DC Studios, overseeing the overall creative direction of the DC Universe across film, TV, and animation under a single banner. Gunn and Safran will report to Warner Bros. Discovery CEO David Zaslav, and will work closely with Mike De Luca and Pam Abdy, co-chairpersons/CEOs of Warner Bros. Film Group.

James Gunn

The appointments, which will be effective on Nov. 1, are significant since Zaslav is staking much of Warner Bros. Pictures’ future on mining fiscal gold from DC superhero IP. Indeed, Warner’s biggest box office hits in recent years have come from DC, including Wonder Woman 1984, DC League of Super-Pets, The Batman and the just released Black Adam.

In their new roles, Gunn and Safran will spearhead the development and execution of a long-term plan for the many properties licensed from DC Comics, including building a sustainable growth business (i.e., box office hits).

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Peter Safran

In addition to their executive responsibilities, Gunn and Safran will develop, direct, and produce projects. In their new roles, they will also work collaboratively with Channing Dungey, chairman of Warner Bros. Television Group; Casey Bloys, chairman and CEO of HBO and HBO Max Content; Kathleen Finch, chairman and Chief Content Officer for US Networks Group; Pam Lifford, president of Warner Bros. Discovery Consumer Products; and David Haddad, president of Warner Bros. Interactive Entertainment.

Throughout his decades-long career, writer/director/producer Gunn has been responsible for a vast portfolio of critically acclaimed films and series, including Warner Bros. live-action movies, Scooby-Doo and Scooby-Doo 2; a remake of George A Romero’s Dawn of the Dead; the horror comedy Slither; the dark superhero comedy Super; Marvel movies Guardians of the Galaxy and Guardians of the Galaxy Vol. 2; DC’s The Suicide Squad and the spin-off series for HBO Max, “Peacemaker.” With the release of The Suicide Squad in 2021, Gunn became the first filmmaker to direct a movie for both the Marvel Cinematic Universe and the DC Universe.

Safran has produced numerous films for Warner Bros., New Line Cinema, and other film studios, including DC’s highest grossing movie, Aquaman and its upcoming sequel, Aquaman and the Lost KingdomShazam and its upcoming sequel Shazam: Fury of the GodsThe Suicide SquadAnnabelle; and the entire “Conjuring” universe, the most successful horror franchise of all time at $2 billion in worldwide box office and counting.

Safran’s production company, The Safran Company, recently re-upped its long-term production deal with Warner Bros. Discovery, and has four theatrical releases scheduled for 2023, including The Nun 2, which is the sequel to the highest grossing title in the “Conjuring” universe, The Nun. Prior to forming his own company, Safran was President of Brillstein-Grey Management, which represented some of the biggest names in Hollywood.

“I am thrilled to have the singular and complementary talents of James and Peter joining our world-class team and overseeing the creative direction of the storied DC Universe,” Zaslav said in a statement.

The executive said Gunn and Safran have decades of experience in filmmaking, close ties to the creative community, and proven track record thrilling engaging with superhero fans around the globe.

“[That] make[s] them uniquely qualified to develop a long-term strategy across film, TV, and animation, and take this iconic franchise to the next level of creative storytelling,” Zaslav said.