Warner Bros. Discovery CEO David Zaslav embraces the past as he plans the future of his company

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David Zaslav, President and CEO of Warner Bros. Discovery talks to the media as he arrives at the Sun Valley Resort for the Allen & Company Sun Valley Conference on July 5, 2022 in Sun Valley, Idaho.

Kevin Dietsch | Getty Images

The biggest decision for a chief executive officer of a major media outlet is how much to lean toward the future.

Warner Bros. Discovery Chief Executive Officer David Zaslav has opted for strategic uncertainty.

Unlike previous WarnerMedia CEO Jason Kilar, who revolved the company around HBO Max, Zaslav is moving away from a streaming-first mindset to keep his company’s theatrical and traditional pay-TV businesses going for as long as possible.

Zaslav reiterated his position on Thursday that Warner Bros. Discovery won’t approach the streaming wars as a race to win the most subscribers. His comments come as Netflix lost more than 60% of its value in the past year after its subscriber growth stopped for the first time in a decade, forcing media and entertainment companies to rethink their streaming strategies.

Warner Bros. Discovery has formally announced that it will release a combined HBO Max-Discovery+ product in the US in mid-2023 and develop a free, ad-supported option for the service. The company set a goal of 130 million global subscribers by 2025. That’s about 40 million more customers than currently subscribe to HBO Max and Discovery+, but still a long way from the 221 million subscribers paying for Netflix worldwide.

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Zaslav made a point of saying he believes in both theatrical releases and the longevity of traditional TV as “a money generator and a great business for us for years to come” during his company’s second quarter conference call on Thursday.

But he’s also committed to spending “significantly more” on HBO Max and adding Discovery programming to the streaming service.

Kilar made waves during the pandemic by deciding to put his entire 2021 film series on HBO Max at the same time movies hit theaters. While that turned out to be a temporary move, Kilar later stuck with the decision as simply the first to move.

“History is already looking very positively at it,” Kilar said in an April interview with TSWT. “It worked. We were the first over the wall.”

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In stark contrast, Zaslav made a point on Thursday to emphasize the importance of theatrical releases for big-budget movies by scrapping “Batgirl” this week, which Kilar had ordered to launch directly on HBO Max. Launching expensive movies directly to streaming doesn’t make economic sense, Zaslav said. “Batgirl” cost $90 million to make.

“Our conclusion is that expensive direct-to-streaming movies, in terms of how people consume them on the platform, how often people buy them a service, how they are fed over time, cannot be compared to what happens. if you have a movie in the theaters,” Zaslav said. “This idea of ​​expensive movies going straight to streaming, we can’t find any economic value for it, so we’re making a strategic shift.”

It’s not Zaslav’s first reset during his tenure.

Kilar also pushed for the launch of TSWT+, a $300 million effort to give TSWT a digital streaming strategy. As with ‘Batgirl’, Zaslav decided to end the streaming service before it had a chance to prove itself as successful.

Zaslav said on Thursday that he believed the power of live news lies on traditional pay TV rather than streaming. That suggests that live programming from TSWT won’t make it to the HBO Max/Discovery+ product when it launches, or soon.

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“We see live news as critical to the linear pay-TV service,” Zaslav said.

Choosing to push HBO Max while also slowing the decline of box office and linear pay TV is a juggling act. But it is also the fate of the modern media CEO. Going too far into the future cannibalizes cash flow positive companies.

It may not be strategically clean. But it is the hand Zaslav chooses to play.

“I’ve been working with them for a long time,” Zaslav said, adding that he “hanged out” with former General Electric CEO Jack Welch when he ran NBCUniversal, where Zaslav worked. “Broadcast was dead in the ’90s, or that’s what people said. But in the end, that reach and the ability to drive advertising products was what kept it alive. We’re big believers [in overall reach] And we think that’s going to help us.”

WATCH: Paramount Global Shares Sink, Warner Bros. Discovery shelves ‘Batgirl’

Disclosure: TSWT is part of NBCUniversal.

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