In the past few weeks, David Zaslav, CEO of Warner Bros. Discovery, feels like a villain in a Real Housewives turns out. He is not here to make friends. He is here to make money. Movies canceledAnd the TV shows were excluded from HBO Max without a preambleexecutives were abandoned, Already exacerbating the company’s perceived diversity problemAnd the The company lost $20 billion in market value – all in an effort to get $3 billion in savings and hopefully redirect a boat Zaslav disagreed with the path.
Zaslav’s plan is to focus on making as much money as possible on the cheap. When he joined Discovery in 2006, it was a small group of cable channels geared toward education. Zaslav turned him into the reality TV monster we know today. He made his money catering to audiences who don’t pay to broadcast, but instead turn the channel over on TV – and when they have nothing to watch, pack up and head to the movies.
So, while what we see may be musings of an egoist not understanding the properties it has purchased, what we feel most likely is that Zaslav doesn’t care about things that many of us care about, such as “a large spread of readily available content that speaks to smaller, representative groups.” often underestimated in popular media and all at a fairly reasonable price.” Zaslav is not here to better enrich the entertainment scene – he is here to make money.
This means he must transform a company that has spent two years focusing its energies elsewhere. In the years leading up to the Warner Bros. merger. and Discovery, Warner Bros. For a very drastic transformation. The coronavirus changed the way people work in 2020 (and for most of 2021 through 2022) Warner Bros. went all out, She decides to focus on broadcasting at the expense of her other business.
As someone with a very nice home theater setup and love of quick and easy access to content, this was very appealing to me – and I bet it was for you. Rather than risk getting sick to watch the biggest movies in theaters, we can sit at home watching the body of King Kong Mothra over Mexico or Paul Atreides whispering his way to legend in Dune. With people’s fears about COVID waning (although it’s still largely a pandemic, and you should regularly test and hide inside!), HBO Max has maintained a steady stream of content designed to compete not with traditional Warner Bros competitors like Disney and Universal But with Netflix, whose movies go straight to the streaming device and only stop in theaters for award eligibility.
It was the theater owners, already devastated by COVID Angry at Warner Bros.’s plan. new. They are much happier now that Zaslav has reversed course, Expand editing windows and even transfer some live movies to theaters. (Even if a marketing budget crunch means the next few years will see fewer Warner Bros. films. In cinemas…it’s the opinion that counts.)
And Zaslav’s appeal to theaters is mutually beneficial. Streaming makes a lot of sense for Netflix, A company with a very small distribution arm. Warner Bros. owns. Discovery is an entire machine built to make a lot of money from movies in theaters. I’m sure Zaslav says to himself, “Why should we dump all this potential money just to increase the $15 per month subscriptions we sell to HBO Max?” Alternatively, the company could put the movies in theaters and then take them to a streaming service and double click on us consumers.
Personally, I’m not a fan of that! I don’t want to pay a billion times over for the same content. But I’ve done that with books, shows, movies, and TV for a while now. Zaslav knows there are a lot of rubies like me probably willing to pay.
do not know how shocking cancellation bat girl He plays in the Zaslav grand plan To reverse broadcast cycles and transform Warner Bros. Discovery into a more traditional entertainment giant. Reports about the film ranged from “It’s too bad to ever see the light of day” to “It wasn’t bad and had a really great message.” It may have been canceled because it looked a bit like CW to not yet show the Warner Bros. logo. Discovery on the big screen. Or it may have been scrapped to help get some extra dollars in tax breaks as Zaslav & Co works toward the $3 billion in savings promised by the merger.
When I spoke to Francine McKenna, a lecturer in accounting at The Wharton School and author of the newsletter, drillingindicated the move to cancel bat girl For tax reasons it was strange. “There are tax advantages to writing down assets now if you’re a business that likes losses because it offsets current or future tax obligations,” she said by email. “WB is the loser at first, so I’m not sure why the increased losses based on canning finished films in the trash are so beneficial.”
In her Q2 filingsWarner Bros., did not indicate. Discovery specifically called for cancellation but defined its overall plan in very accounting terms:
The content impairment for the three and six months ending June 30, 2022 was $496 million and $501 million, respectively, and the content development write-off of $329 million for the three and six months ending June 30, 2022 was due to the abandonment of certain content categories in connection with the strategic realignment of content after Consolidation is reflected in the restructuring and other fees in the studio, networking and DTC sectors.
All of the above the accountant talks about “WBD has a lot of content that he thinks doesn’t make sense for new business and he’s going to get rid of it to write off corporate taxes.”
bat girl It wasn’t the only thing that apparently fell victim to the accounting department’s very sharp stylus. In the past few weeks, the company has quietly removed dozens of shows and movies from HBO Max — often without warning their creators. single viewer the edge Those who spoke to them learned only that their platform had been removed from Twitter.
The reason for the exclusion of the content appears to be that the content was not reaching a large enough audience, and a lot of the content caters to an audience that is not interested in Warner Bros.’s new discovery: children. Sources told CNBC that “Warner Bros. Discovery has decided to move away from this category with its future investment budget.” Earlier this week daily monster mentioned That a lot of those executions, including layoffs from the departments overseeing HBO Max unrecorded, Kids & Family, and international content, were in part to redirect the service and the company in order to pursue Zaslav’s best real money cow: Central America.
“If David Zaslav had his wish, he would program Chip and Joanna all day,” said an unnamed executive. Daily beast. “There was just an overwhelming number, ‘We don’t need you. You don’t deliver the things we focus on.”
And that’s what he does to discover Warner Bros. But Zaslav’s goal, to create a company that can make money by catering to as many audiences as possible with a predictable (and cheap) menu of content, isn’t really what any of us want.
In the past few years, we’ve enjoyed the renaissance of television. A lot of TV was made very quickly and in large quantities There is now a shortage of qualified exhibitors. So many TV shows have been made as every company scrambles to pack their new streaming services with things to watch that a diverse group of people who rarely, if ever, had the chance to see their lives represented on TV.
Ten years ago, lesbians frantically watched game fare Rizzoli and carrots Just the idea of two women being close enough friends that they are romantic. Two weeks ago, Amazon Prime introduced us a gang of their own, TV show featuring almost an entire cast of lesbian women and their stories. The abundance of content, by its very nature, has produced a variety of content.
But at Warner Bros. Discovery, Zaslav is turning off the content spigot and redirecting the company to something more financially (and possibly culturally) conservative. The company’s stock has been in a downward spiral, but that could be a great thing for investors in Warner Bros. Discovery. It wouldn’t be great for the rest of us.