Soon after the Warner Bros. Discovery merger was finalized, CEO David Zaslav said that he believed that his new company’s future lay in a pivot away from the now subsided streaming boom and back towards movie theaters, and his latest earnings call comments suggest that he is even more adamant in this direction.
On Thursday, Zaslav spoke about Warner Bros.’ recent strategy to move films greenlit under previous CEO Jason Kilar’s leadership for exclusive release on HBO Max to an exclusive release in theaters before going to the streaming service. The executive said that after analyzing streaming metrics on HBO Max with the service’s chief content officer Casey Bloys, they found that releasing films as streaming exclusives did not provide any return on investment.
“We were able to see which content people are spending time watching, what content is really powerful to us in terms of reducing churn, and then there was a lot of content that just wasn’t being viewed,” Zaslav said. “And so we were able in many ways to Monday morning quarterback, and that’s what led us to the conclusion that direct-to-streaming movies were providing really no value to us.”
This has led WB to release films like “Magic Mike’s Last Dance,” which director Steven Soderbergh produced as a Max-exclusive film, in approximately 1,500 theaters two weeks ago with an expansion to just over 3,000 theaters this past weekend. While it has grossed less than past “Magic Mike” films with $19.4 million, insiders at Warner Bros. have told TheWrap that they have been pleased with the film’s performance against its lower production and marketing budget and believe that “Last Dance” will have a higher profile on HBO Max than it would have had with a streaming-exclusive release.
Zaslav also told investors that Warner Bros. Discovery’s strategy regarding theatrical releases also extends to its TV shows, eschewing the Netflix-esque releases of entire seasons at once in favor of weekly releases to build anticipation and widespread appointment viewing for shows like HBO’s “The Last of Us.”
“The actual perceived value of content increases when there’s a great expectancy and excitement and want to be part of something… and they get to experience it with others, either in a packed theater or on a Sunday night,” he said.
