After eleven months of government review, the Discovery and WarnerMedia mega-merger finally closed last Friday. The newly formed giant is well-positioned to compete with Netflix, Disney, Amazon, and Apple at the highest levels of streaming, with HBO Max’s 70M subscribers joining an additional 20M from Discovery+ under one roof.
CEO David Zaslav states boldly that Warner Bros. Discovery will be “the best media company in the world.” But Zaslav’s confidence belies the many challenges that lay ahead, including how to manage over $55B in debt that the new corporation has on its books. Zaslav indicates that one way to drive profitability is not to over-spend on content, an indulgence that other streamers seem to have fallen into. “Would HBO be doing a lot better if it had three more really successful scripted series,” at the same level as SUCCESSION, EUPHORIA, and THE GILDED AGE. “It’s not clear that they would be.”
The merger’s completion also brought the departure of Jason Kilar, the former CEO of WarnerMedia. In an outgoing interview with Vox, Kilar covered many subjects regarding his tenure with WarnerMedia. His opinions about the future of drama and romantic comedies were notable, saying that “those motion pictures will not be exclusively distributed in theaters.” Kilar has a history of striking a sour note with exhibitors, especially when he decided to release the entire 2021 Warner Bros. film slate to theatres and on HBO Max simultaneously. With last month’s successful theatrical release of the romantic comedy THE LOST CITY starring Sandra Bullock and Channing Tatum, it might be worth taking Kilar’s prognostication with a pinch of salt.