Former WarnerMedia CEO: Streaming Wars Will Produce ‘Multiple Business Casualties’ in Coming Years
Jason Kilar, the former CEO of WarnerMedia, has stood by and watched as much of what he worked to achieve at the company has gone by the board after it was acquired by Discovery. Gone are theatrical day-and-date releases on HBO Max. Gone are hundreds of original shows that appeared on the service. Soon to be gone is HBO Max itself, as it will soon be merged with discovery+ in a service that will most likely be styled simply “Max.”
Kilar shared his thoughts on where the streaming industry is headed in an op-ed for the Wall Street Journal on Tuesday. According to Kilar, the industry is due for a major shakeup in the next 24 months, as power brokers emerge and smaller streaming platforms fade away.
“There will be multiple business casualties in the paid streaming wars and a few business victors,” he wrote. “In this scenario, no more than three global entertainment companies are likely to attain the streaming-service scale required—300 million global subscriptions at an average of $15 per month—to generate attractive cash flows.”
The executive who oversaw not only the launch of HBO Max, but also Hulu, stated his belief that in the next two years, there would be several “major” mergers and/or acquisitions that would lead to the ascension of just a few enormous streaming platforms. Those companies would see a major financial bump, operating with cash flows north of $10 billion per year, a far cry from the negative operating budgets that streamers are dealing with today. He believes that smaller services will be discarded like a straight-to-video DVD tossed unceremoniously in a bargain bin at a big box store.
As he has in the past, Kilar made sure to note that he believes that Prime Video and Apple TV+ are exempt from this vision, as those streamers are both tied to giant tech and commerce companies with multiple revenue streams. That will keep them moving forward, even as other mid-tier streamers may not survive.
If Kilar’s predictions come to pass, there are already several streaming platforms ahead of the game that will likely be able to survive the oncoming market friction. Netflix and Disney+, with hundreds of millions of global subscribers each (and backed by financially stable companies), are unlikely to be toppled any time soon. That means mid-tier streamers like HBO Max and Paramount+ could be feeling the pressure to stand out from competitors soon.
Kilar also shared his thoughts on theatrical windowing, which became a huge source of controversy during his time overseeing HBO Max. The former CEO believes that monetary success will become the biggest guiding principle for theatrical windows, not a rigid number of days that each movie must get in theaters before moving to streaming. That policy is likely already in place at many major Hollywood studios, as Warner Bros. Discovery, Paramount, and Universal have all demonstrated their willingness to be flexible with the 45-day theatrical baseline that has become the industry standard.
The op-ed by Kilar doesn’t represent any drastically new opinions about the state of the streaming market. Former Disney CEO Bob Chapek, current Disney CEO Bob Iger, CuriosityStream CEO Clint Stinchcomb and more industry executives have all commented in recent months that they think consolidation is the future of the streaming industry. But if Kilar is right, and this type of movement ramps up over the next two years, the streaming landscape could look very different very soon.