Warner Bros. Discovery eyes ‘new chapter’ balancing DTC streaming & third party sales

Westworld

Warner Bros. Discovery is focusing on “relaunching and building” the business over the next 12 months, following a brutal 2022 that saw execs and shows slashed in number.

WBD has been seeking “synergy” savings of around $3.5bn over the three years since Discovery and WarnerMedia merged in April, resulting in thousands of staff exits and content write-offs.

These ranged from the cancellation of hit series such as HBO’s Westworld, to JJ Abrams upcoming sci-fi drama Demimonde, and the shuttering of movie Batgirl, despite filming having been wrapped.

Gunnar Wiedenfels

Teams across the world have been affected, with numerous exits in Europe and the abandonment of local production across much of the continent.

However, CFO Gunnar Wiedenfels, speaking at Citi’s 2023 Communications, Media & Entertainment Conference, said the business had now concluded the “initial strategy changes”.

Speaking on show costs, he added: “We took a little bit of time to make sure that we did it properly. For some of the titles, we’ve found new homes elsewhere – that’s why this took six or seven months. But I think we’ve come to great solutions and most importantly, we’re done with that chapter.”

WBD continues to face headwinds, with Wall Street remaining sceptical towards streaming. The company’s share price is currently down 57% since April, but Wiedenfels indicated that the previous all-in direct-to-consumer strategies of studios have been radically altered.

The CFO said WBD would lie “in the middle” when it came to DTC streaming and selling content to third parties – CEO David Zaslav has previously talked up distribution on numerous occasions, as has Wiedenfels over the past nine months.

He added that the industry had gone “overboard and went on a spending frenzy. There was a lot of thinking of, ‘Let’s do more, more, more,’ not necessarily, ‘Let’s do the exact right things, let’s do what works.’”

Wiedenfels, whose company is expecting restructuring charges of up to $5.3bn, said the upcoming launch of the combined HBO Max and Discovery+ streamer later this year would provide a fillip to the firm.

“We’re going to come out with a great product from a consumer-experience perspective and that’s the biggest hold-back for HBO Max right now – the experience is not where it needs to be.”