In recent weeks, the CEO of Warner Bros. Discovery, David Zaslav, started feeling like a villain in a real housewives To display. He’s not here to make friends. He is here to make money. Movies have been canceled, TV shows were pulled from HBO Max without a preamblethe leaders were fired, compounding the company’s already notable diversity problemand the company lost $20 billion on its market capitalization — all with the goal of saving $3 billion and hopefully redirecting a boat Zaslav does not agree with the course of.
Zaslav’s plan is to focus on making as much money as possible at the lowest cost. When he joined Discovery in 2006, it was a small collection of education-focused cable channels. Zaslav made him the reality TV monster we know today. It’s made its money by catering to audiences who don’t pay for streaming but, instead, change channels on the TV — and when they can’t find something to watch, pack their bags and head to the movie theater.
So while what we’re seeing might be the fumbling of an egoist with no grip on the properties he’s purchased, what seems much more likely is that Zaslav just doesn’t care about the things that many of us care, like “a large spread of readily available content that caters to smaller groups that are often underrepresented in popular media, all at a fairly affordable price. Zaslav isn’t here for better enrich our entertainment landscape – it’s here to make money.
That means he has to move a company that has spent two years focusing its energies elsewhere. In the years leading up to the merger between Warner Bros. and Discovery, Warner Bros. has undergone quite a radical transformation. COVID changed the way people functioned in 2020 (and for much of 2021 and even 2022), and Warner Bros. went all-in, decide to focus on streaming at the expense of his other activities.
As someone with a really nice home theater setup and a love of quick and easy access to content, I really liked this – and I bet you did too. Instead of risking illness to see the biggest movies in theaters, we could sit at home and watch the body of King Kong Mothra over Mexico or Paul Atreides whisper into legend in Dunes. As people’s concerns about COVID waned (although it’s still a pandemic, and you should test regularly and hide indoors!), HBO Max has maintained a steady stream of content designed to not compete with traditional Warner Bros. rivals. like Disney and Universal. but with Netflix, whose movies go straight to the streamer and only make pit stops in theaters for rewards eligibility.
Theater owners, already devastated by COVID, were furious at Warner Bros.’ new plan. They are much happier now that Zaslav has backtracked, expand release windows and even move some movies directly to streaming in theaters. (Even if a tighter marketing budget means the next few years will see fewer films from Warner Bros. release in theaters…It’s the thought that counts.)
And Zaslav’s appeal to the theaters is mutually beneficial. Direct to streaming makes a lot of sense for Netflix, a company with a very small distribution arm. Warner Bros. Discovery has set up a whole apparatus to make big money from theatrical movies. “Why”, I’m sure Zaslav thought to himself, “should we throw away all that potential money just to increase the $15 a month subscriptions we sell for HBO Max?” Instead, the company can put the movies in theaters and then move them to the streaming service and double down on us consumers.
Personally, I’m not a fan of that! I don’t want to pay a billion times for the same content. But I’ve done it with books, software, movies, and TV for a while now. Zaslav knows there are a lot of rupees, just like me, probably ready to pay.
We don’t know how the shocking cancellation of bat girl plays in Zaslav’s grand plan to reverse streaming prices and transform Warner Bros. Discovery into a much more traditional entertainment giant. Reports about the film range from “it’s so bad it should never see the light of day” to “it wasn’t bad and had a really good message”. It may have been canceled because it looked a bit too CW to appear after the Warner Bros. logo. Discovery on the big screen. Or it could have been canceled to help secure a few extra dollars in tax relief as Zaslav & Co. strives to achieve the $3 billion in savings promised by the merger.
When I spoke to Francine McKenna, lecturer in accounting at the Wharton School and author of the newsletter, Excavationshe noted the decision to cancel bat girl for tax reasons was weird. “There are tax benefits to writing assets now if you’re the type of business that likes losses because they offset current or future tax liabilities,” she said by email. “WB is a loser to begin with, so I don’t know why additional losses based on canning finished movies are so helpful.”
In its Q2 repositoriesWarner Bros. Discovery didn’t specifically refer to the cancellation, but described its overall plan in very accounting terms:
Content write-downs for the three and six months ended June 30, 2022 of $496 million and $501 million, respectively, and content development write-offs of $329 million for the three and six months ended June 30 2022 were due to the discontinuation of certain content categories in connection with the strategic content realignment following the Merger and are reflected in restructuring and other charges in the Studios, Networks and DTC segments.
All of the above is the accountant’s talk for “WBD has a lot of content that he thinks doesn’t make sense to the new business and will get rid of it for business tax deduction.”
bat girl was not the only thing to have apparently fallen victim to the very sharp pen of the accounting department. Over the past few weeks, the company has quietly removed dozens of shows and movies from HBO Max — often without even notifying their creators. A showrunner The edge spoke to only learned of their show’s removal from Twitter.
The reason for the elimination appears to be that the content did not reach a large enough audience, and much of the content was aimed at an audience that the new Warner Bros. Discovery simply has no interest: children. Sources told CNBC that “Warner Bros. Discovery has decided to move away from the category with its future capital budget.” Earlier this week The daily beast reported that much of this elimination, including layoffs from the divisions overseeing HBO Max’s unscripted, children’s and family, and international content, was in part to reorient the service and business to better pursue the cow to real money from Zaslav: Central America.
“If David Zaslav had his wish, he would just schedule Chip and Joanna all day,” an unnamed executive said. The daily beast. “There was just a huge, ‘We don’t need you. You don’t deliver the things that we focus on.
And that’s what he does at Warner Bros. Discovery. But Zaslav’s goal, to build a business that can make money by reaching the widest possible audience with a slate of predictable (and cheap) content, isn’t really what we all want.
In recent years, we have experienced a television renaissance. So much TV has been made so fast and for so much money that there is now a shortage of qualified showrunners. So much television has been done that every company is scrambling to fill their new streaming services with things to watch that a wide variety of people who have rarely – if ever – had the opportunity to have their lives portrayed on TV have had this opportunity.
Ten years ago lesbians were frantically watching queerbaiting dishes like Rizzoli and islands just for the idea that two women are friends close enough to be romantic. Two weeks ago, Amazon Prime gave us A league apart a TV show featuring nearly an entire cast of queer women and their stories. Content glut has, by its very nature, produced content diversity.
But at Warner Bros. Discovery, Zaslav turns off the content tap and reorients the company towards something much more fiscally (and potentially culturally) conservative. The company’s shares are on a downward spiral, but that could very well be a good thing for Warner Bros. investors. Discovery. It just won’t be as great for the rest of us.