Warner Bros. Discovery to reevaluate its content distribution strategy – Digital TV Europe


Warner Bros. Discovery (WBD) will re-evaluate its content distribution strategy as the giant corporation faces a “noisy” 2022, cutting CNN+ is likely to be just the first of management’s “quick and decisive” moves.

Zaslav, speaking on the company’s first earnings call since the $43 billion mergerexplained how WBD would look to control costs and grow revenue, with content spending under the microscope and third-party program sales back on the agenda.

“Content Monetization”

US studios have drastically reduced the amount of sales of international content in recent years by rolling out their own global streaming services, but Zaslav suggested that sales of HBO and Discovery shows – WBD’s library expand to more 200,000 hours and range from Succession and scooby-doo for Doom Patrol and Mythbusters – may soon return.

Doom Patrol

“If we’re not going to be in a particular country for several years, we should monetize our content,” Zaslav explained. He said his team had “taken a look” at HBO Max and could see “there’s a huge amount of content…that’s not being used on the subscription platform at all. .

“What content is being used and valued on the subscription platform, how are you improving it and driving it with our existing content to reduce churn and drive growth, and what is not being used on this subscription platform and how do you monetize it in a meaningful way?”

“Everything has to be monetized. We own more content, more engaging intellectual property than any other media company in the world. We are strategically focused on a global platform that reaches people via subscription only or via light advertising, but ultimately, whether through our existing platforms or via AVOD, we should monetize all the content that we have.

Growth… but not at all costs

Zaslav said the goal “is to maximize long-term shareholder value and asset value, not just the subs,” reiterating recent comments from HBO Max International chief Johannes Larcher.

The huge spending on content by streamers has been highlighted over the past few months, with some analysts questioning whether the OTT model is viable in its current form.

90 day fiance

Subscriber losses at Netflix – which in turn sent the value of SVOD plummeting by more than a third overnight – have also shaken confidence in the industry, prompting a reassessment of content spending.

Zaslav attempted to differentiate Warner Bros. Netflix’s Discovery emphasizing its company’s focused approach, adding that the company is “not trying to win the direct-to-consumer spending war”.

CFO Gunnar Wiedenfels admitted he focused his efforts on Warner Bros.’ combined content spending. and Discovery, which amount to $23 billion.

“The goal of this exercise is not to identify ways to reduce our content spend, but to harmonize processes and analytics, to be more consistent and efficient in how we allocate our content spend. content across the entire global portfolio to optimize returns.”

“Quick and decisive action”

Warner Bros. Discovery previously said it could cut $3 billion from merger costs and Wiedenfels criticized former WarnerMedia executives, pointing out that despite revenues of $40 billion, there had been “virtually no flows available cash” over the past 18 months.

David Zaslav

He also pointed to “a number of investment initiatives” WarnerMedia had backed as areas that could be cut, with CNN+ “just one example.”

“There are a lot of large investments that lack what I would consider a solid financial foundation and meet the return on investment (ROI) hurdle that I would like to see for major investments.”

Zaslkav added: “The attack [on synergies] is strategic, operational, structural and financial. We will clearly take swift and decisive action on some points as you saw last week with CNN+, while others will take time to formulate appropriate action plans.

Countless questions regarding the company’s operations outside the United States remain, ranging from the future of All3Media to German streamer Joyn.

Warner Bros. Discovery has confirmed that it will combine HBO Max and Discovery+, although no date has been confirmed. HBO Max reported 76.8 million total subscribers in the first quarter, while Discovery+ claimed 24 million.


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