WBD CEO: HBO Max Platform ‘Not Particularly Good’ Right Now; Applauds Company’s Shift to Revenue-Focused Strategy
Warner Bros. Discovery CEO David Zaslav has a habit of generating news whenever he speaks publicly, and his comments at the recent RBC Capital Markets Global Technology, Internet, Media & Telecom Conference were no exception.
Zaslav spoke on a myriad of topics at the conference, but one of the unifying themes was that his company wants to continue using its various entertainment arms — streaming, linear TV, theatrical — in ways that will maximize their value going forward. Zaslav did not mince words about the current state of the company’s premierstreaming service HBO Max ahead of its merger with discovery+, which is currently set for next spring.
“We have a platform that’s not particularly good,” he said. “We’ll be emerging with a new platform that we think is going to be much better and much more user-friendly.”
Although the company’s cost-cutting measures have attracted plenty of criticism from former working partners and others in the industry, WBD is seeing the results it wants from pulling content it considers low-performing off of HBO Max and extending theatrical windows for higher-performing films. Zaslav shared his thoughts on the company’s strategies for maximizing revenues on all fronts, stating that he thinks more companies will be making similar moves in the future.
“We are a diversified company,” he said. “When we announced this deal, one of the concerns was you’re so diversified, when really rather, you’d be like Netflix, just be a streaming service. That didn’t work. People collapsed the entire motion picture window on the streaming services. I’ve seen the data, maybe it works for someone else.”
A part of that revenue-maximizing strategy is a more intense focus on monetization, rather than the traditional subscriber numbers. As streaming services have begun reaching their maturation point, many companies have begun to focus more on revenue per subscriber metrics, rather than raw customer counts.
“Subscribers today are like clicks in the ’90s. I have been around for a while. And I was in that road where people run around buying companies and aggregating clicks,” he said. “We care about the ARPU [average revenue per user] of our subscribers. We want real subs that are going to pay real money. We said we’re looking in [2025] for $1 billion of profit that we believe we can get on our direct-to-consumer product, and we’re targeting 130 million subs.”
Because WBD owns so much of the content it distributes, it can monetize its properties very effectively. It keeps the box office revenues generated from theatrical films, and can auction off shows that its TV arm produces to other media companies, as it has done with the Apple TV+ hit series “Ted Lasso.”
The company can also take older content that doesn’t perform well on HBO Max and make it available for free on an ad-supported video on-demand (AVOD) service. WBD has previously discussed the potential of launching such a service after the rollout of its combined HBO Max-discovery+ service next spring. Additionally, the company’s library can also be licensed to outside AVOD services as well.
Zaslav also took another opportunity to shake off criticism of the company’s decisions since he took charge. Though his strategy of fundamentally changing the way that the legacy Warner Bros. studios do business have taken a lot of criticism from fans, creatives, and analysts alike — not to mention Wall Street investors — it is clear that Zaslav believes in his plan and feels that he will be vindicated when all is said and done.
“It has taken courage,” he said. “It’s taken vision for what we think we can be and who we want to be. We’re going to be wrong about a lot of it. but when we emerge next year, it’s going to be the company that we believe in.”
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