After the much discussed issues in the DCEU, and with the new leadership’s reputation for ruthless focus and cost control proving well founded, many were speculating that HBO Max was about to undergo a shake up. Some even speculated that it would be for the chop.

When Warner Bros. quietly removed some content from the streamer, and then loudly cancelled some more while seemingly disowning the strategy of making movies to be launched direct to the streamer, it looked as if an axe may fall. This approach was a key growth driver under the previous regime.


Not so! In fact the reality is far more boring than that. It is eminently sensible and probably to be expected.

On the earnings call a few hours ago, Warner Bros. Discovery CEO David Zaslav announced that a combined, single SVOD service will be created by integrating Discovery+ and HBO Max. The yet to be named service will launch sometime in Summer 2023 in the United States, followed by an international rollout to follow.


The company wants 40 million subscribers by 2025, up to 130 million. It will drive growth by spending more on content, but the old strategy is over. No more highly expensive movies made just for the streamer. Zaslav:

“Quality is what matters. Quality is what Casey and that team is delivering. It’s the best team in the business. We’re doubling down on that HBO team. They’re all committed under contract, and we’re going to spend dramatically more this year and next year than we spent last year in the year before.”

He was clear that they remain committed to most of HBO’s original programming, but children’s programming and direct-to-streaming movies are off the table. In a move that will be music to the ears of cinema owners, Zaslav made a firm commitment to the theatrical model and in the process threw Jason Kilar’s strategy into the trash:

“We have a different view on the wisdom of releasing direct-to-streaming films, and we have taken some aggressive steps to course-correct the previous strategy.

When you’re in theaters, the value of the content and the overall viewing experience is elevated. Then when the same content moves to PVOD, and then streaming, it is elevated again.

As films moved from one window to the next, their overall value is elevated, elevated, elevated. We saw this clearly demonstrated with The Batman and Elvis.

Expensive films going to streaming … can’t find an economic value for it. We’ll always be agile, but the focus will always be on theatrical”

Theatrical day-and-date is gone. This is all in service of financial recovery as the news is not good from the accounts department on Burbank. $3.4 billion in net losses, revenue behind plan, streaming growth behind plan and high debt are all to be tackled. Shares fell on trading, which means analysts expected more savage cuts than they got.

A share price loves a programme of cuts. Always has. Less cost means more for dividends.

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