In Trying to Save HBO Max from Financial Ruin, David Zaslav Might Be Damaging It Beyond Repair
It is certainly not standard operating business procedure to purposely piss off either your customers or the people that create your product, however, since taking over as Warner Bros. Discovery CEO, David Zaslav seems to be regularly and continually going out of his way to do just that.
Just this week, there has been news of multiple moves from WBD that have resulted in dramatic and drastic changes to HBO Max that add to a long list of decisions that have angered fans, employees, and members of the creative community. The common denominator in all of these recent moves has been that following Discovery’s acquisition of WarnerMedia, the merged Warner Bros. Discovery has been unable to get out from underneath all of the debt and fees that it has accumulated.
So while Zaslav’s slice-and-dice philosophy of trying to turn around the financial fortunes of his company might very well get it back on the path to profitability, it also just might alienate the very people that it is trying to convince to spend $10-$15 per month for the right to stream its content. From removing shows from HBO Max in order to license them to third-party, free ad-supported streaming TV (FAST) platforms to reversing a half-century's worth of policy by inserting ads into HBO originals, these are moves that could make consumers question whether or not HBO Max is actually worth the relatively pricey investment.
Since its launch, HBO Max has routinely been rated as one of the best streaming platforms when it comes to satisfying customers, but Zaslav’s tinkering has already fundamentally changed the user experience in ways large and small, and those changes don’t seem to be ending any time soon. By being able to save money on two ends, WBD is incentivized to remove even more content from HBO Max, often with little to no warning or regard for fans who are invested in the programs.
Not only do those moves allow the company to stop making payments to creators, cast, and crew for the right to stream the titles, but it also gives WBD the opportunity to shop the shows to outside FAST or ad-supported video-on-demand (AVOD) streamers, increasing their revenue-generating potential. Obviously, Zaslav isn’t going to ax the most popular content on HBO Max for the opportunity to license “Game of Thrones” or “The Sopranos.” Still, even if the things that leave are more niche titles, the fact that the service’s library is shrinking lessens the value to many consumers.
At $9.99 (ad-supported) and $14.99 (ad-free) per month, HBO Max is already one of the most expensive platforms in the streaming industry, and even if WBD doesn’t raise the price when it incorporates discovery+ content into the new Max service when it launches in 2023, if the company has a reputation of unceremoniously removing titles from its library on a whim, many might not think that the investment is worth it.
Additionally, now that WBD will reportedly be including ads in HBO Original shows and movies on the streamer, that is one more decision that could make viewers question whether or not HBO Max’s premium price is really providing a premium experience. Legitimate questions about the direction of the streamer are not new, but it seems that in the build-up to next year’s launch of Warner Bros. Discovery’s combined service, the company is seemingly engaged in a campaign of death by a thousand self-inflicted cuts.
And those cuts (figurative and literal) are not just reserved for the consumer end of the business. By canceling movies that were near completion, un-renewing shows already in production, dropping series that took years to create, and no longer making payments to creatives and crew members who survive on royalty checks and health insurance from streaming shows, Zaslav has made many in Hollywood uncomfortable working with WBD. That might not concern the CEO, who is clearly going out of his way to model the Warner Bros. side of the company after his lean, cheap, assembly-line Discovery side, but fans will likely not be as forgiving.
There will always be people who want to make shows and movies for WBD’s streaming service, but if they aren’t the most in-demand creators, the most popular actors, the most talented designers, audiences will eventually notice, and that will undoubtedly have a major impact on the company’s subscriber totals and bottom line.
Ultimately, there is next to no possibility that HBO Max — or its Max successor — will completely collapse anytime soon, but in a streaming era of downsizing and consolidation, it seems as if Warner Bros. Discovery has set the service on a path more toward the middle than the premium heights that it was initially designed to deliver.
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