Warner Bros. Discovery Faces First Post-Honeymoon Earnings As Layoffs, Streaming Decisions Loom
Warner Bros. Discovery is heading into a very important week.
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Warner Bros. Discovery is heading into a very important week. The company, whose regime just crossed the 100-days-in-office mark, reports its Q2 earnings Thursday, when CEO David Zaslav and his team are expected to lay out more concrete plans for the combined entity than they did on the Q1 earnings call, held just a couple of weeks after the $43 billion Discovery-WarnerMedia merger had been completed. That could include more details about how the two companies' streaming services, HBO Max and Discovery+, would be combined and under what name; about the company's theatrical-streaming film strategy; and how a promised $3 billion in savings (a number many expect to go higher) would be achieved.
HBO Max, which has positioned itself as a top-tier streamer after two years of operation, has found itself at the center of all sorts of wild speculation for the past couple of months — from a supposed shutdown and folding into Discovery+ to a buying freeze and dramatic cull of its development slate.
While the streamer has paused new live-action kids and family programming as well as unscripted content, most of the rumors could not be substantiated as HBO Max is preparing for one of its biggest launches ever with the Game of Thrones prequel House of the Dragon. Further consolidation of HBO and HBO Max's scripted operations under Casey Bloys is expected, and the future of HBO Max's unscripted division is in question given the pending merger with the nonfiction-focused Discovery+.
WBD's film strategy for HBO Max also is believed to be under scrutiny, with movies expected to get theatrical distribution before going on the streamer going forward. Also under discussion is a potential unifying moniker for the consolidated WBD streaming platform that would combine the coastal/metropolitan appeal of HBO Max and the Middle America pull of Discovery+. Zaslav was thought to have been keen to changing the name of the streamer when he first discussed the deal but now is believed to have more of an open mind.
Elsewhere, IP will be a huge differentiator going forward. Warner Bros. Discovery has the libraries of DC Comics, Harry Potter, Hanna Barbera and Looney Tunes, a collection matched only by Disney with Marvel, Lucasfilm's Star Wars and Pixar.
Proper management of the big franchises is a top priority, with finding a DC chief who can revitalize the comic book universe the way Kevin Feige has done with Marvel of upmost importance. There's been much chatter about new Harry Potter extensions, including a TV series, and Zaslav is understood to have recently met creator J.K. Rowling.
Film strategy will likely remain focused on theatrical. Zaslav is not thought to be a big fan of direct-to-streaming movies, believing that the return on investment is low and it doesn't help churn across HBO Max. He recently brought in former Disney exec Alan Horn, a heavyweight, who will help consult on feature strategy, working with former MGM chiefs Michael De Luca and Pamela Abdy, who recently took over a larger portion of the portfolio previously overseen by Toby Emmerich.
As he immerses himself into areas in which he has no hands-on experience, like movies and scripted TV, Zaslav has relied on the counsel of industry veterans. In addition to bringing Horn on board, he also reportedly has sought advice from a number of other former top executives including Peter Roth, who led the Warner Bros. Television Group for many years.
As WBD closes the book on its first 100 days, the next 100 might give us an idea about what the future of the company actually looks like. We may get the first glimpse at that on the WBD earnings call Thursday.
