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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.

One thought on “Warner Bros. Discovery CEO Zaslav: HBO Max Is ‘Not Particularly Good’ Right Now”

  1. I can really care less. 95% of the new stuff that comes out to total trash.
    The other 5%. I can wait on it. No big deal.

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