As metaphors go, comparing the upstart Warner Bros. Discovery media giant to a Boeing 747 passenger plane flying on one engine, rather than four, might seem like a catastrophe in the making.
But to Gunnar Wiedenfels, former CFO of Discovery, whose expanded post-WarnerMedia acquisition duties now include connecting the fiscal dots between Warner Bros., HBO, Turner, CNN and Discovery, the analogy is not about disaster. It’s all about opportunity.
The German-born Wiedenfels used the comparison often Sept. 8 as a featured speaker at the Bank of America Securities 2022 Media, Communications & Entertainment Conference.
“So, there’s a lot of opportunity. It’s exciting to see people step up and really own that opportunity and running [WBD] as one company,” he said. “I almost view this as a Boeing 747 flying on one engine. And we’re firing up the other three. There’s so much opportunity. It doesn’t happen overnight.”
Wiedenfels, who has a Ph.D. in business informatics, has been tasked with helping implement what his boss, Discovery CEO David Zaslav, contends is a new macroeconomic approach to Hollywood and entertainment distribution. Since consummating Discovery’s $43 billion operational control deal for WarnerMedia from AT&T in April, Zaslav has reportedly engaged himself in a months-long “listening tour” of Tinseltown.
The result: Hiring former MGM Studio executives Michael De Luca and Pam Abdy as new co-chairpersons/CEOs of Warner Bros. Pictures Group, while retaining Casey Bloys, chief content officer of HBO and HBO Max, and Channing Dungey, chairman of Warner Bros. Television Group, among others.
Now in control of Warner’s impressive content vault and brands, which include Warner Bros. Pictures, DC Films, New Line Cinema, Cartoon Network, Boomerang, DC Comics, Warner Bros. Animation, and the Warner Bros. Television Studio, among other silos, Zaslav and Wiedenfels are looking to broaden WBD beyond WarnerMedia’s controversial streaming-centric focus and embrace all distribution channels — including the old-school theatrical window. The company is also aggressively upping content licensing to third parties.
“We, like very few other players, have the best ability to get the best return on every dollar of content spend, because we have control of the complete exploitation chain across all of these [distribution] windows,” Wiedenfels said. “We have a ton of content that has been sitting idly … and we’re firing this up with excitement across the organization.”
While retaining the theatrical rights, Warner licensed “The Lord of the Rings” IP episodic distribution to Amazon, which has just released original series “The Lord of the Rings: The Rings of Power” to strong viewership.
“‘The Lord of the Rings’ is a great example. It’s a non-exclusive window. It’s makes perfect sense to get that additional monetization for the content,” Wiedenfels said, adding the current strategy surrounding Warner’s Elvis biopic is another “good example” regarding diversity in distribution.
The CFO hailed Warner’s internal management teams for coming together to articulate different distribution windows for the movie with the best interest of WBD in mind.
“There was no ego, no religious belief about the value of one platform over the other,” he said. “It’s still in theaters way, way longer than we originally promised, with a successful home entertainment window following after that. It’s now starting to contribute on the HBO Max platform.
“Look, there’s a healthy debate [on windows], but we look at the data, we look at the facts and disagree on some of the assumptions, but the [fiscal projections] for the film have been coming up and up.”
Wiedenfels bristled at the controversy surrounding cancellation of HBO Max’s $90 million Batgirl movie and animated series “Batman: Caped Crusader,” among other content.
“I don’t think it is so unusual [to cancel content],” he said. “We are a creative industry. And one of the elements of creativity is that there is judgment and differences in the views on what the potential of a certain piece of IP might be.”
Wiedenfels said, with the combination of a new management team, new studio leadership and his fiscal team providing financial data points, distribution decisions will change.
“There’s a lot of press out there. I guess media likes to talk about media. That’s the way these things go when a new team takes over,” he said. “The bigger picture, from a forward-looking perspective, is the strategic shift we have made, and Zaslav’s belief in the theatrical window. It’s the belief in leveraging all of these various exploitation windows to use our unique position to monetize all of our content as much as possible — as opposed to producing all these feature films for just one streaming window.”
When asked whether the distribution changes are more about Zaslav’s very public mandate to cut $3 billion in costs within the first year of the merger, or changes in management, Wiedenfels took the middle road.
“Look, money is money. I would label it better business management. It certainly helps contribute to the bottom line,” he said.
Despite the high-profile content decisions with the DC brand, Wiedenfels reiterated Zaslav’s desire to up the focus on DC superheroes as Disney has done with Marvel Comics.
“DC Comics stands out and there’s a lot in flight with a number of films that are slated for next year and in 2024,” he said. “And David is still looking for someone to lead that specifically. The Wizarding World, ;Harry Potter,; is obviously a [another] huge potential, if we can get it right. There’s a video game coming out at the end of the year.”