Jason Kilar: Warner Bros. Producing 10 More Theatrical Releases Streaming Concurrently on HBO Max in 2022

WarnerMedia made headlines releasing the entire 2021 Warner Bros. theatrical slate concurrently on HBO Max for a movie’s first 31 days of release.

WarnerMedia CEO Jason Kilar, speaking on the company’s July 22 fiscal call, said the controversial strategy through six months reveals the enduring importance of the box office ($463 million in revenue domestically through June 30) coupled with the impact technology has made on distribution.

“Clearly motion pictures matter and will continue to matter when it comes to theatrical exhibition,” Kilar said. “They also matter at home, and absolutely in terms of the response that we’ve gotten … from all of our day-and-date titles. We feel very good about the response that consumers have given it in the home.”

Jason Kilar

As the exhibition business turns the page on the pandemic and more moviegoers are vaccinated, Kilar, who is on tap to remain CEO of WarnerMedia into next year heading into the completion of the Discovery merger, doesn’t anticipate movie distribution returning to the lengthy theatrical window.

He said that while some Warner titles in 2022 will have a 45-day window, the studio is also going to be producing more than 10 movies that will be available on HBO Max and in theaters on day one.

“I think that what you’re going to see is this industry continues to evolve, and to continue to innovate in ways that not only works for consumers and fans, but also works for our business partners,” Kilar said.

Separately, AT&T CEO John Stankey said the telecom has heard nothing from federal regulators regarding the merger that will transform WarnerMedia into Warner Bros. Discovery and see Discovery CEO Davis Zaslav running the unit.

Stankey said the regulatory process involves document production and providing information that’s responsive to the government’s requests to begin the reviews.

“No news is good news,” he said. “I’ll tell you internally, all the normal steps are going on to be prepared operationally for when we would expect an approval. It’s not a complicated transaction.”

Reed Hastings Wants Rival HBO Max on Weekly Nielsen Chart

Netflix co-founder/co-CEO Reed Hastings has made a career thinking outside the box. But when it comes to quantifying streaming video on the household TV, Hastings apparently opts for old-school Nielsen — a brand synonymous with broadcast ratings.

Responding to Nielsen’s June 18 market report that found streaming video use across all television homes in May climbed to 26% of total viewer spent watching TV, Hastings seemed surprised that pay-TV and broadcast combined still dominate viewership time.

Indeed, Netflix captured just 6% of total TV viewing time, on par with YouTube TV, but ahead of Hulu (3%), Amazon Prime Video (2%) and Disney+ (1%).

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“Wild that most TV time in USA is still legacy linear,” Hastings tweeted on social media. “Stream team needs to up its game.”

Hastings added that he wished HBO Max was included in the results. Max is noticeably absent from Nielsen’s weekly Top 10 streaming charts, which include Disney+, Prime Video and Hulu — and is regularly dominated by SVOD pioneer Netflix.

“@jasonkilar we need you on the board too,” Hastings tweeted in reference to WarnerMedia CEO Jason Kilar.

Kilar, the founding CEO of Hulu, responded (with lots emojis) that WarnerMedia was indeed represented in the Nielsen chart, albeit in dominating linear TV.  Kilar, who plans to remain in his position into 2022 following Discovery’s acquisition of WarnerMedia, said HBO Max has been the strongest growing domestic SVOD service in 2021.

HBO and HBO Max ended the most-recent fiscal period with 44 million combined subscribers, including 11.1 million Max subs since the service launched a year ago.

“@WarnerMedia is already on the board strongly in that largest green pie piece Reed (TNT, TBS, CNN, HBO, CN …). Proud to serve customers in whatever way they choose,” Kilar tweeted.”  Slightly smiling faceThumbs up “Fun to also be the crazy fast(est) growing upstart in @hbomax (2 Qs straight of 2.5M+ U.S. sub adds).” Fisted handClapper board

 

WarnerMedia CEO Jason Kilar to Stay at Helm into 2022

WarnerMedia CEO Jason Kilar will remain with the former Time Warner for the next 12 months into 2022. The former Hulu boss, who was hired in April 2020 to spearhead WarnerMedia’s streaming initiatives, was largely absent within AT&T’s decision to spin-off a minority stake in WarnerMedia to Discovery, whose CEO, David Zaslav, will take charge of WarnerMedia upon completion of the merger.

In a May 27 companywide address hailing the one-year anniversary of the launch of streaming service HBO Max, Kilar said he had no plans to exit the company this year.

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“My plan and my focus is to remain here in my CEO role at WarnerMedia,” Kilar told staffers in the town hall. “I am not thinking right now about post-merger. There will be a time to consider that topic in 2022.”

While AT&T and Discovery executives lauded Kilar for his accomplishments during the M&A announcement, there has been no word about the executive’s role going forward.

“Because I believe we have unfinished business, the work of the next year can and should be extremely fulfilling as the world continues to see what we are capable of doing,” Kilar said.

 

Is There Hope for Warner Bros. After Three Miserable Years Under AT&T?

The stunning announcement that AT&T wants to unload WarnerMedia and merge it with Discovery strikes me as a long overdue admission by the giant telecom that when it acquired what was then Time Warner less than three years ago, it had absolutely no idea what the hell it was doing.

Similar to Verizon Communications ditching Yahoo and AOL, the AT&T move amounts to a belated cancellation of a deal that never should have happened in the first place.

AT&T buying Time Warner was like a rich, smart and successful businessman donning a chef’s hat and, with absolutely no training, entering the kitchen of a world-class restaurant determined to concoct an enticing new dish that would set the culinary world on fire. With no idea what to do, the “chef” resorts to asking a bunch of different people for help — and when the result is a near disaster he keeps messing with it, adding a pinch of salt here and a sprinkle of cumin there, only to make it even worse.

In desperation, he throws up his hands and asks someone else to take over — while the hungry, frustrated diners become even more apprehensive about what the ultimate concoction will be. How, they wonder, do you create a tantalizing dish out of Wonder Woman and the Property Brothers?

That’s going to be up to David Zaslav, the CEO of Discovery who’s been tapped to lead the new, as-yet-unnamed mashup. Working in his favor is his recognition that it all comes down to talent. Speaking with reporters on a Zoom call shortly after the landmark deal was announced, he stressed the importance of building relationships with the talent community and said he would “strive to create the best creative culture” he could.

That’s something AT&T never quite got, as evidenced by the backlash from Hollywood WarnerMedia heaped upon CEO Jason Kilar after his shocking announcement late last year that the studio would simultaneously release its entire 2021 theatrical slate on HBO Max, the media giant’s struggling streaming service.

The sad truth here is that HBO Max has been a disaster from day one, beginning with a mucked-up launch that for a while saw three different streamers operate at the same time, HBO Go, HBO Now and Max. “Go now” seemed to have been the operative phrase for consumers, who largely stuck with Netflix and, as a second choice, signed up for Disney+. Max’s actual subscriber count is something of a mystery; WarnerMedia claims the service as of the first quarter had 44.2 million subs, but that’s combined with regular HBO — and still a far cry from Netflix’s 207 million and Disney+’s 103 million.

Kilar reportedly seeking an exit should surprise no one. His rash move to effectively sucker-punch exhibitors won’t be forgotten, and his near-dismantling of the venerable Warner Bros. Pictures movie studio — which has had a tradition of putting talent first — can, in retrospect, only be seen as misguided. Warner Bros. is — was — a diamond. Kilar is treating it as though it was costume jewelry.

The problem with chucking tradition and legacy and focusing solely on the hot new toy, subscription streaming, is that to compete in a market where there are already two or three strong, established leaders is a quixotic ploy. What do you do when you throw everything you have into a new venture, only to discover it may never be enough?

I find it ironic that AT&T CEO John Stankey remains the telecom’s point person on the WarnerMedia-Discovery deal. As much as he’d like to pin AT&T’s acquisition of Time Warner on his predecessor, Randall Stephenson, Stankey was the true architect behind the deal — just as he was behind an earlier botched venture, AT&T’s $67.1 billion purchase of DirecTV in 2015.

He’s got two strikes against him. I can hardly wait to see if there will be a third.

On the bright side, Zaslav is now in the unique position of being able to undo some of Kilar’s — and Stankey’s — missteps. He can start by following through on his promise to restore relationships with talent and hopefully give Warner Bros. back some of the luster it lost during those three miserable years under AT&T.

CEO Jason Kilar Reportedly Seeking WarnerMedia Exit

WarnerMedia CEO Jason Kilar reportedly was kept out of the loop until near the end of AT&T’s announced $43 billion spin-off of the former Time Warner to Discovery Inc.

With Discovery CEO David Zaslav in charge of the new unnamed company, Kilar, who joined WarnerMedia only last year, is looking to exit the company and his contract, according to The New York Times, which cited sources familiar with the situation.

Kilar’s name was noticeably missing from the May 17 morning press release announcing the mega merger, despite both Zaslav and AT&T CEO John Stankey heaping praise on the former co-founder/CEO of Hulu.

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“Jason is a fantastic talent,” Zaslav said on the conference call. Kilar also likes to be charge, especially when it involves streaming video and digital distribution. Kilar exited Hulu in 2013 after five years when he felt a loss of control on senior management decisions.

Earlier this month, Kilar cited as his biggest regret at Hulu his inability to convince Hulu co-owners, which included 20th Century Fox, Disney, Comcast/NBCUniversal and later Time Warner, the wisdom of global distribution.

“I think it’s totally fair to bash, candidly, Hulu’s lack of global footprint that could have been possible starting in 2008,” Kilar said on the MoffettNathanson Media & Communications Summit.

“This is ultimately a global business. I think it was very hard for the board members of Hulu to feel that this new, small thing called Hulu was going to disrupt their existing businesses across the globe. Now, that happened anyway because of Netflix and others, so that’s why I regret it.”

 

 

Report: AT&T, Discovery Looking to Merge Media Assets

Could WarnerMedia, HGTV, Animal Planet, TLC and Food Network soon be corporate siblings? Media reports suggest AT&T, which owns WarnerMedia, is in negotiations with Discovery to merge media assets in an attempt to better compete in the streaming video world against Netflix and Disney, among others.

Bloomberg is reporting that some kind of a deal could be announced in the coming week. Who would run the combined assets is unclear as Jason Kilar, who heads WarnerMedia, and Discovery CEO David Zaslev both have separate leadership skills. Kilar, who helped launch Hulu, would appear a frontrunner considering his experience in the digital ecosystem. Kilar brought on former Hulu CEO Andy Forssell to run HBO Max and WarnerMedia’s direct-to-consumer business.

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For AT&T CEO John Stankey, a merger of WarnerMedia, which includes Warner Bros., Turner and HBO, better validates the $85 billion spent acquiring the former Time Warner three years ago. That purchase sent AT&T’s corporate debt through the roof — a financial weight the telecom has been trying to reduce ever since. Stankey has been shedding non-core (and core) assets as fast as he can, including selling off Time Warner’s stake in Hulu, AT&T’s New York corporate space, anime unit Crunchyroll, and DirecTV, among other actions.

For Discovery, which launched a branded SVOD platform in January, getting penetration in a saturated market was always going to be a significant challenge — despite offering such assets as “Property Brothers” and Chip and Joanna Gaines’ Magnolia Empire, among others.

HBO and HBO Max ended the most-recent fiscal quarter with 44.2 million subscribers. Discovery+ topped 13 million subscribers at the end of April since launching in January. A strong start, but paltry when compared to Netflix’s 200+ million subs and Disney+ exceeding 103 million. Amazon just disclosed that its Prime Video service has 175 million subs.

 

Jason Kilar: ‘A Lot of Wind’ in HBO Max Sails as Streamer Eyes Live Sports, Global Expansion, AVOD

WarnerMedia CEO Jason Kilar said the average HBO Max subscriber spends two hours a day streaming content, engagement driven in part by Warner Bros. Pictures theatrical movies and HBO original series “The Nevers” and “Mare of Easttown,” among others.

Speaking May 13 at the MoffettNathanson Eighth Annual Media & Communications Summit, Kilar didn’t disclose many new details, such as the price point for the pending ad-supported Max, acting instead as cheerleader for WarnerMedia’s wide-ranging forays into streaming video distribution.

Kilar said that when dividing the total number of active subscribers on a given day by the number of hours that are consumed on a given day, the data revealed two hours.

“[The engagement] hours are truly remarkable, and certainly in excess of where I thought we would be,” he said. “And I’ve been in the middle of this [SVOD] rodeo for a fair bit, dating back to the first days of Hulu.”

Kilar cited the recent TCM Film Festival as an example of curated content, including “unexpected gems at just the right moment,” that he said resonated with both pay-TV and HBO Max subs.

“Going back to The Wizard of Oz all the way up to Godzilla vs. Kong, how you curate and do it in a thoughtful way, beyond just algorithms, is really the secret to the future of delighting customers on the internet.”

As previously disclosed, Max is expanding into 60 countries, including 39 by the end of the quarter throughout Latin America, and another 21 countries by the end of the year. Kilar said the company would not increase expansion/subscriber guidance, saying Max’s rollout as been good since the start of the year.

“There’s just a lot of wind in the sails,” Kilar said. “Consumers are responding to Max. We added six times of the number of [U.S.] subs in the first quarter. That’s what momentum feels like.”

HBO and HBO Max ended the quarter with a combined 44.2 million subs.

When asked about Turner Sports adding the National Hockey League to its portfolio of National Basketball Association, Major League Baseball and NCAA College Basketball, and the potential for live sports to play a bigger role on Max,  Kilar’s response: “Absolutely.”

“We have the [SVOD] rights,” he said. “We were very careful to get those rights. While we don’t have plans for this year, absolutely we could see that down the road. When we orchestrated Max, it was consciously not to be defined by just on-demand programming.”

Kilar again defended his decision to release Warner’s entire 2021 theatrical mover slate on Max concurrently. Admitting mistakes were made “at the edges,” regarding the decision, Kilar stressed that for the most part, he “couldn’t be happier” with the strategy that he also admitted would be scaled back in 2022.

“You should expect us to lean into theatrical distribution for decades and decades to come,” he said, adding that distribution windows will continue to change. For example, some tentpole titles will begin in theaters, while other movies stream concurrently on Max.

“It’s going to be fascinating how that all evolves,” Kilar said. “The world [of movie distribution] will change and we all need to change with it. In many ways we’re leading that. And I’m very proud that were leading like we have this year.”

Finally, Kilar didn’t disclose pricing on the planned rollout of an ad-supported version of Max later this year. Max currently costs $14.99 monthly — the highest of any SVOD service. Kilar said the AVOD option would be priced so that WarnerMedia is “economically indifferent” whether a consumer chooses ad-supported or ad-free Max.

“We want to make sure that we’re not creating a price that causes us to root one way or another,” he said. “The minute the company starts to [take sides], there’s risk they could be at odds what is best for an individual customer.”

News Analysis: Subs, Hype and Debt: Another Week in the Pursuit of Netflix-Like Relevance

NEWS ANALYSIS — Executives at media giants Disney, Comcast and AT&T took to virtual online events this week (and prior) to brag and cajole Wall Street investors regarding efforts to narrow the divide between their respective over-the-top video platforms and market behemoth Netflix.

The tape measures came out early with Disney CEO Bob Chapek announcing that the company’s branded SVOD platform, Disney+, had just surpassed 100 million subscribers, less than a month after reaching 95 million — but still less than 50% of Netflix’s 203 million subs at the end of 2020.

“The enormous success of Disney+ has inspired us to be even more ambitious,” Chapek said, adding the service plans to release 100-plus new titles per year across its Disney Pixar Animation, Disney Live Action, Marvel, Star Wars and National Geographic brands.

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By comparison, Netflix released more than three times that (371 movies and TV shows) in 2019, while reportedly launching 40 to 50 TV shows (some returning) and movies monthly in 2020. The SVOD pioneer earlier this month said it would alone bow 41 Indian movies and shows this year — a shot across the bow in response to the fact that 33% of Disney+ subs come from India.

Meanwhile, WarnerMedia CEO Jason Kilar raised the bar on the company’s HBO Max service, telling investors he expects between 120 million and 150 million combined HBO Max/HBO subscribers by 2025 — up from the 75 million to 90 million projected in October 2019. The combined platforms ended 2020 with more than 41 million subs.

“We exceeded that milestone more than two years ahead of plan,” Kilar said. “The launch of Max has not only covered the decline in linear-TV subscribers, it has actually driven material growth.”

The co-founder/former CEO of Hulu told investors that based on third-party data, in-house number crunching, and a market-leading $14.99 monthly subscription fee, Max was the No. 2 revenue-generating SVOD in the United States — after Netflix.

When multiplying subs by subscription fees, HBO/HBO Max generated about $7.4 billion in revenue in 2020, compared with about $4.6 billion for Disney+. By comparison, Netflix generated $25 billion in revenue last year and added a record 37 million subs. Max plans to launch a lower priced, ad-supported option in June.

“The economics of Max’s growth are compelling,” Kilar said.

After a measured launch last summer, NBCUniversal’s Peacock streaming service ended 2020 with 33 million app sign-ups or people who created accounts, but weren’t necessarily paying for the SVOD/AVOD hybrid service. Comcast Corp. CEO Brian Roberts claimed Peacock was the second-fastest growing brand (after Zoom) during the pandemic.

But at what cost? The company quietly disclosed in a regulatory filing that Peacock lost $914 million in 2020, while generating $118 million in revenue. Neither HBO Max nor Disney+ are yet profitable. Much of the Peacock fiscal loss is due to opportunity costs associated with NBCUniversal diverting programming to Peacock rather than third-party content licensees — a fiscal conundrum not lost upon Roberts.

“During this year, one of my goals is to step back and comeback with, ‘Okay, we had this start [with Peacock], what are we going to do about it?’” he said.

Analyst Rich Greenfield with Lightshed Partners has a possible suggestion: consolidation. Greenfield contends NBCUniversal and WarnerMedia should merge OTT video operations rather than going it alone to create greater competitive scale in a saturated marketplace.

“We believe it is time for both AT&T and Comcast to abandon the fool’s gold of vertical integration of content and distribution and merge NBCUniversal with WarnerMedia,” Greenfield wrote in a blog post last November. “Abandoning grandiose plans and empire building is a tough psychological hump to overcome. However, it would be a wildly accretive outcome for investors.”

CEO Jason Kilar: HBO Max No. 2 Revenue SVOD Service in U.S.

Backed by an industry leading $14.99 monthly subscription fee, and growing subscriber base, HBO Max is the second-largest (after Netflix) revenue-generating SVOD service in the U.S., according to WarnerMedia CEO Jason Kilar.

Speaking March 12 on the AT&T analyst day, Kilar said more Max subscribers were added in the final seven months of 2020 than linear service HBO added in the previous 10 years.

Kilar said management’s goal around Max from the start has been to reach a broader, younger and more engaged audience than HBO.

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“I’m happy to report, we’re seeing just that,” he said, adding that 43% of the platform audience is under the age of 35, while 50% of viewers are female. HBO typically skews more male viewers.

Since launching on May 27, 2020, Max and HBO have topped 41 million in combined subscribers — a tally WarnerMedia had projected wouldn’t occur until the end of 2022.

“We exceeded that milestone more than two years ahead of plan,” Kilar said. “The launch of Max has not only covered the decline in linear subscribers, it has actually driven material growth.”

Kilar said Max users are twice as “engaged” as HBO users in terms of daily viewing hours — a metric the executive hailed considering Max’s elevated subscription fee.

“Based on publicly available data and analysts’ estimates, we believe that we are already the No. 2 revenue-generating standalone subscription video-on-demand service in the U.S.,” he said.

Kilar said he expects Max revenue per subscriber to continue increase as retail subs comprise an increasing percentage of the overall sub base. Indeed, the executive said the company earns a 90% margin on each retail Max subscriber added in the U.S.

“The economics of HBO Max’s growth are compelling,” he said.

Kilar said WarnerMedia remains “encouraged” by its decision to release all 18 of Warner Bros. Pictures’ 2021 theatrical releases on Max (for 31 days) simultaneously in the U.S. market.

“Given the effects of COVID, we have been happy, proud even, to give consumers the choice to see our great stories in the home or in theaters in 2021,” he said, adding that theatrical releases are often the first content new Max subs stream.

“We have seen a reduction in [subscriber] churn, in part due to the motion picture strategy.”

‘Most People are Not Wealthy’: WarnerMedia CEO Eyes Ad-Supported HBO Max as Antidote to SVOD Cost Fatigue

Maintaining that “most people on this planet are not wealthy,” WarnerMedia CEO Jason Kilar on March 4 said a cheaper ad-supported HBO Max option is a “fantastic thing for fans.”

At $14.99 per month, HBO Max is the most-expensive subscription streaming service on the market. With consumers barraged by competing SVOD options, driving up household spending on par with linear pay-TV, a  less-expensive ad-supported SVOD service may be just what the doctor ordered, Kilar maintains.

Speaking very early from the West Coast on the virtual Morgan Stanley Technology, Media and Telecommunications Conference, Kilar said the pending launch of an ad-supported Max option would help draw budget-conscious consumers.

“It turns out that most people on this planet are not wealthy,” Kilar said. “If we can wake up and use price and be able to invent and do things elegantly through advertising to reduce the price of a service, I think that’s a fantastic thing for fans.”

While Kilar didn’t disclose pricing for ad-supported Max, as the former CEO of Hulu, he understands the marketing. Hulu charges $5.99 monthly with advertising, $9.99 without ads. HBO and HBO Max ended 2020 with more than 41 million combined subscribers in the U.S.

“I’ve seen the [new] service in the terms of the designs that we’ve come up with — I think people are going to be so excited about how we’ve been so thoughtful about the insertion of advertising and how it’s a very organic nature of the experience,” he said.

When asked about Warner Bros. Pictures’ landmark decision to release its entire 2021 slate on Max concurrent with box office launches, Kilar said the data remains in its early days. He said the studio has titles in the pipeline earmarked for theatrical exhibition.

“I think it’s too early to tell if things are changed on a permanent basis with regard to the economics,” he said. “I tend to not think that that’s the case.”

With federal rollout of coronavirus vaccinations in full swing, Kilar said he believes pent-up consumer demand to return to normal and theaters could see a “crazy resurgence” among moviegoers.

“I could easily see that happening,” he said. “And we will be there to serve them in that situation, and proudly so.”