WBD’s Zaslav uses keynote to discuss streaming, sports rights and theatrical

As Warner Bros Discovery CEO David Zaslav grapples with his merged company’s massive restructuring exercise, he took time out yesterday (November 15) to discuss his strategic aims during a keynote discussion at the RBC Capital Markets conference.

David Zaslav

His core message was that the restructuring is “much more challenging that we thought. Some assets are better than we thought at the core – the talent is better than we thought. But there was a lot that was unexpectedly worse.”

Key areas he discussed included an imbalance in the streaming market that has seen platforms spending hugely on content but not securing enough subscribers to be profitable. Noting how easy it is for consumers to churn out of streaming services once they have watched a favourite show, he said HBO Max spent $7bn on content last year and lost around $3bn. Having looked at user data, he said a lot of content on the platform is not being monetised effectively, and raised the prospect that some of it could be licensed non-exclusively to third parties without impacting adversely on the performance of the core streaming business. He also raised the prospect that the company might introduce a Tubi/Pluto style AVOD service in due course.

On other topics, Zaslav said the current ad market is worse than it was during the height of the Covid-19 pandemic, but he was positive about the commercial value of maintaining a theatrical window. He also called WBD’s DC universe “a hugely undervalued asset” and said there will be a lot of growth from this division.

Echoing the message from his recent Q3 2022 earnings call, Zaslav also downplayed the importance to WBD of acquiring sport rights – which some observers believe is a negotiating ploy aimed at controlling the cost of a new NBA deal. He is wary of sports because WBD is only ever a “renter of rights”. He said: “We have enough sports without having to do a new deal with anybody. We would like to do a deal with the NBA, but you will see us being very disciplined on sports.”